These are the 3 trends that will transform logistics in 2020

October 29, 2019

Logistics is changing fast - to succeed in 2020 and beyond, companies will have to build their brands through customer experience, digitize the supply chain, and use smart suggestions to plan operations in advance.


The Trends:

  1. Building brands through customer experience
  2. Digitizing the supply chain
  3. Smart suggestions to plan operations in advance
"what is the most important success factor in logistics?"

At the 2019 Performance Logistique Conference in Montreal, a poll taken at the beginning revealed some surprising numbers - attendees were asked, "what's the most important success factor in logistics?". With a variety of distributors, 3PLs, and carriers present, the answer was:

  1. Client’s expectations - 50%
  2. Technology - 33%
  3. HR - 16%
  4. Transportation management - 4%

This begs the question - why are TMS companies invested in building better and better transportation management tools? Companies like Roserocket in Toronto and Turvo in Sunnyvale have built great transportation management systems, but have neglected what logistics service providers are looking for most.

The biggest takeaway from the event? LSPs are starting to see logistics not just as a delivery mechanism, but as a marketing tool. Technology that allows them to retain and satisfy customers is what is going to win in the next year and beyond.

Building brands through customer experience

If there's one thing to take away from the insights at Performance Logistique, its that todays logistics leaders have to be customer experience leaders. Instead of thinking like operations, we have to put on the marketer and customer success hats and prioritize the delivery experience the customer receives - branding, UX, speed of delivery, transparency, visibility.

However, there's a disconnect between the high level ideals of logistics as marketing and the reality that's often in place on the warehouse floor, at the loading dock, and in the front office.

  • Staff are too busy: warehouse staff are too inundated with administrative work to bother with providing great service - in a commodity industry where margins are critical, it simply isn't possible to hire a "CX person".
  • Legacy customer communication: At too many LSPs, the majority of communication with customers is through email and over the phone. This is time consuming and painful for your staff and customers alike.

Logistics leaders should then focus on reducing these pain points in their teams by promoting the following:

  • Invest in technology that simplifies staff workloads and reduces administrative burden
  • Reduce complexity and make the customer journey as effortless as possible

One way that logistics staff can accomplish this and set themselves up for success is by investing in collaborative logistics. This new model for freight technology aims to centralize communication, and make the customer experience as effortless as possible through the use of bidirectional customer portals to help your end clients track, manage, and confirm accurate delivery of their orders. It encourages companies to pivot from a siloed logistics approach to a unified one around customer experience.

Digitizing the supply chain

Along with the focus on customer experience, its also critical that today's logistics leaders digitize all aspects of their supply chains. This includes communication, documentation, analytics, and the processes of booking, order, and inventory management. As defined by Salesforce, digital transformation is the process of using new technologies to create or optimize internal business processes and customer experiences to improve market position and meet business needs.

Digitization and customer experience are even intertwined, Salesforce founder Marc Benioff explained,

"Every digital transformation is going to begin and end with the customer, and I can see that in the minds of every CEO I talk to." - Marc Benioff, Salesforce Founder

This means that when you work to digitize the supply chain, you have to do so through the lens of customer experience. This time, you can work backwards - what's preventing you from delivering the customer experience that you want?

Again, these hurdles are the issues of staff being bogged down in manual administrative work, and poor inter-team communication, especially between the front office and the warehouse/loading dock. These obstacles can be worked around though, using digital technologies to improve communication channels and automate manual work.

  1. Automate and centralize the booking process: don't let your staff waste their valuable time in the process of manually booking shipments through various portals and communication with carriers and drivers to secure booking confirmation.
  2. Work with your partners on the same platform: based on market research and first-hand accounts at performance logistique, is clear that the 3PL-distributor relationship isn't just common - it's the norm. The software you use, whether as a distributor or a 3PL, should make it easy to collaborate in real time and outsource specific supply chain responsibilities.
  3. Automate the documentation process: one of the hidden hurdles in the digital transformation of the supply chain is the vast amounts of shipping documentation that needs to be processed. Invest in software that handles this, and communicates it to the right stakeholders securely for approval.

This digital transformation will also make it easier to gain valuable analytics and insight on both your internal operations and your customers' purchasing patterns. Next-generation software will have to do both - aggregate the metrics that help you measure and analyze your internal performance, as well as providing insight into how customers are receiving the delivery experience that you provide.

Smart suggestions to plan operations in advance

This is the golden grail of any supply chain operation - a perfect and harmonious combination of perfect operational efficiency and perfect customer satisfaction. Of course, you'd need a crystal ball to do this - nobody can perfectly predict buying patterns, supplier timeframes, and carrier or driver rates. Anyone that promises to do so is essentially selling snake oil.

However, this doesn't mean that you should be running blind. Logistics leaders will need to embrace the data revolution and use analytics, KPIs, and AI-powered suggestions to predict buying patterns, identify problematic carriers/drivers and lanes, and estimate order lead times. In a commodity market like logistics, this is what will create the biggest wins - maximized operational efficiency (less $$$) and customer satisfaction (stronger brand = repeat business).

This might seem daunting, but the first step towards planning and forecasting operations performance is to collect the right metrics. Great freight technology can help you with this - aggregating and centralizing data across your scatter booking processes, order management systems, and warehouse management system. Only when all your data is in one place can you look at the overall success metrics that really matter - allowing you to track freight spend, lane performance, carrier/driver performance, and inventory turnover in one location.

Final Thoughts

Wrapping up, there are three key areas that logistics executives need to tackle in 2020 to be successful:

  1. Become customer-centric: measure and improve upon a branded customer experience
  2. Reduce non-revenue generating tasks: automate the administrative tasks and focus on building customer relationships
  3. Use analytics to plan ahead: analyze your operations and customer journey periodically to improve efficiency and performance.

Bringing these elements into your strategy for 2020 can only strengthen your customer relationships and operational efficiency. If you're not prioritizing this, you're already falling behind the leaders.

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