Quintiq’s first annual road logistics survey aims to discover the primary drivers of change in the road logistics business in 2015. This year’s survey asked business leaders where they are focusing their efforts and attention, and what tools they are using to effect change.
Road logistics professionals are in agreement about the areas that require their focus – customer service and efficiency. What’s also clear to the majority is that existing tools and techniques are not capable of driving the necessary improvements here.
Fierce competition and narrowing margins keep today’s road logistics professional awake at night
The number one concern today is a perennial one – the threat of increasing competition. With increased competition and the cost of attracting new customers rising every year, customer retention comes in a close joint second. Less than 20% reported being worried about rising fuel costs, in contrast to recent years and perhaps due to the falling price of the oil barrel. Despite a let up in fuel prices, cost efficiency and effectiveness of the fleet remain a key concern.
Price and customer service are the two fronts on which the fiercest battles are fought. With margins already as low as 1% for some of the biggest players in the global logistics industry, it’s likely that the focus will shift to customer service. In particular, we expect to see an increased number of LSPs offering optimization services to partners and customers.
Optimization – everyone is talking about, but who’s actually doing it?
Nearly 70% of respondents are optimizing shipments, while only 30% are optimizing routes. And none has yet to harness the potential of warehouse optimization. Piecemeal optimization of this sort – as opposed to end-to-end planning and optimization – is unlikely to keep the promise on which optimization is sold. Optimizing shipments without optimizing routes will likely result in stubbornly high fuel costs and late-delivery rates.
Current planning and optimization systems fail to meet requirements
The ubiquitous transport management system (TMS) is meeting – but never exceeding – expectations. Only 15% of respondents are satisfied with their TMS, and over 60% say their TMS could do better in helping the organization to achieve its short-term goals. Only 15% of respondents are satisfied with their existing logistics planning and optimization solutions, suggesting that true optimization has yet to have an impact in the road logistics business.
Looking to understand how true optimization will impact your road logistics operations? Watch my webinar for more insights.