Between Amazon’s promises of same-day delivery, the hype surrounding delivery drones and the amount of trucks we see on the roads every day, you think it would be hard to argue that the logistics industry is about to experience a rapid increase in costs. After all, the past decade was one of the most successful periods for this sector.
However, the Council of Supply Chain Management Professionals’ annual State of Logistics report paints a different picture. The Wall Street Journal reported that the steady increase in demand for products and goods as well as the growth of industrial manufacturing have caused shipping volumes to skyrocket, and as a result, the logistics industry will face capacity problems.
Further compounding problems in logistics, a driver shortage is currently underway, and the source noted that when the Federal Reserve raises the benchmark rate, logistics businesses will struggle to hold onto inventory as it becomes more costly to store and procure necessary equipment. So while in the past, devoting a budget to storage wouldn’t be much of an issue, now, there aren’t enough employees to deliver products and capacity problems will have a larger impact on monthly and yearly revenues. Therefore, logistics firms must come up with a solution or risk riding the trending curve downward with their competitors in 2015.
“The logistics industry will face capacity problems in 2015.“
Amazon’s last hope
And so, with impending budget deficits and capacity problems on the horizon for logistics companies, it should come as no surprise that some organizations take bold steps. Amazon, for example, recently introduced a new delivery service – similar to Uber, but for packages, not people – Forbes reported. This is the business’s contingency plan for driver and truck shortages, and it relies on a mobile app. Time will tell if Amazon’s solution pays off for the company, but Forbes’ point was clear: With capacity concerns reaching the tipping point, logistics firms need to find a cutting-edge method for managing inventory on the road and back at headquarters.
Logistics mobile apps are exactly the solution that the industry needs. For one, with a tour planning app or a task management app, drivers can become more efficient, covering more ground with less gas utilization and making up for a shortage of employees. Logistics companies can cut spending while improving their delivery efficiency, and all it takes is a mobile app or two. However, over time, and as capacity costs really start to hurt organizations, they will obviously need new mobile solutions – and that’s where Mobilengine’s rapid development platform comes in.
After experiencing success with turn-by-turn navigation apps, task management apps and the like, logistics companies can deploy more mobile solutions that allow drivers to collect invoices and send them back to headquarters in real-time. These proof of delivery and freight task management apps will be critical to managing capacity in the coming months and years.
Back at headquarters
Of course, mobile apps will also help shore up any inefficiencies back at headquarters as well, especially since driver shortages aren’t the only problem.
“Warehouse utilization rates are north of 95 percent right,” Walter Kemmsies, chief economist at Moffat & Nichol Inc., told The Wall Street Journal.
With a history of saving clients as much as 30 percent on their logistics and the ability to reduce back office administration by up to 60 percent, Mobilengine’s freight management apps and other customized mobile apps can help administrators and managers gain a better, more complete outlook on current stock and capacity limits. It will be critical in the coming months to ensure full visibility on all inventory, as well as guarantee that trucks are taking the right products and goods from the warehouse.
Mobility has the capability to reinvent logistics and Mobilengine can help, providing both truck drivers and back-office administrators with enough mobile apps to reduce capacity costs and improve delivery efficiency.
Adam Dalnoki, Mobilengine’s CEO, brings IT and telecommunications expertise as an ex BCG consultant. He made a previous exit in a mobile payment start up and has held sales executive positions at Provimi and Kraft Foods.