The logistics industry is other bright counterparts such as banking and retail. Freight marketplace may slow in adapting though if you can manipulate the 12sea of technologies advancements for its own goods. Thought the shift of technology is delayed, but gradually gained a good pace at the world market. There is a courtesy in part to a host of digital freight platforms in the logistics industry today. These digital freight platforms gave three-pronged benefits to the industry which helps to develop and popularize new business models and offerings, also digitalize the industry’s core services and add value towards building a robust internal foundation for the industry growth. Yet there is no impact as they not been in line with their full disruptive potential but it’s still obvious and visible that they will most likely have a lasting influence on the Trends Shaping the Future of Global Logistics Industry.
Issues with Logistic Industry Facing
The global logistics industry is trying to rake more than $12trillion in revenue by the end of 2022. For an industry as big and pivotal as this, there are far too many issues that are yet to be fixed.
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Fragmentation
The logistics industry is a huge ecosystem. Unlike, in the case of other huge companies where the top companies can manage the large portion of the industry’s total business, among the 50 trucking companies in the US are handling only 30% of the total freight activities around the country. Besides, every 9th American trucker works as an independent owner-operator. From this, it is clear that the case for digital logistics marketplaces are highly fragmented.
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Volatile Rates
Due to the lack of transparency in the logistics market, brokers are utilising their power to choose costly options for clients, increasing their commissions. Additionally, volatile fuel rates directly impact carrier rates.
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Environmental and regulations concern
Local, state and federal authorities all impose strict ordinances upon carriers. The environmental issues posed by the burning of fuel and the burgeoning concerns over the matter have gradually increased the intensity of these ordinances and heightened the compliance costs to extravagant levels.
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Lack of trust and clarity
In the current scenario, fragmentation deeply pervades the logistics industry, where trust is a scarce commodity. Due to this lack of trust that actually creates a very scarcity of other precious virtue – transparency. Traditionally both shippers and carriers have completely relied on freight brokers to deal with each other. As there is no direct communication between the major parties and by relying completely upon brokers has brought an element of opaqueness to the services of the logistic business industry.
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Problem with Empty Truck Miles
Every year most of the American truckers travel about 50 billion load-less miles; about 28% of their total annual mileage. The fragmentation of the industry is the major reason for this empty miles issue. And also the lack of communication and opaqueness will cost the industry a lot of money and is the main reason for grief for then carriers.
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Delivery Pressures and subsequent Delays
The delivery within 48 hours promise has doubled the stress on the freight industry. Quick delivery has become a differentiator between competitors in the e-commerce space bu that phenom has changed down the delivery time slots. Truckers never take more chargers than what they could deliver on time. Ensuring delivery pressure and subsequent delays both fuel each other.
The case for Digital Logistics Marketplaces
Freight and logistics marketplaces have the potential to disrupt the industry significantly, addressing many of its pertinent issues. Just have a look at what a digital logistics marketplace is? And how will it benefit the logistics industry? This will give you a clear idea of the freight marketplace.
An online freight marketplace is a platform where shippers will connect with a vast class of carriers and even freight forwarders. Here in the online freight marketplace, the communication takes place through direct channels between the parties and not through any mediator. Think of a logistics marketplace as a tool which allows shippers to call a thousand carriers at once! The marketplace benefits from increased transparency in logistics, fair pricing, quicker response times, and enhanced trust among industry members. This approach will reduce the empty mile problem to a large extent. The comprehensive freight marketplace software solutions provides has prompted many investors and logistic industry executives to raise the question “ how to build marketplace?”
Challenges in the current marketplace scenario
Before getting into the point to know the answer on how to build a freight marketplace? Question, it is very important to know that notwithstanding all that works for it, the freight and logistics marketplace scenario is riddled with its fair share of problems.
- Still, there are many marketplaces that rely on manual quotes from freight forwarders. The marketplace benefits from increased transparency in logistics processes, fair pricing, quicker response, and dispatch of goods, fostering trust among industry members.
- Many marketplaces don’t offer value-added services, though the basic needs of the parties are fulfilled. Due to the lack of this value-added service the user may bounce back from the marketplace.
- The customer-centric experiences in online freight marketplace may result in roadblock path as this service have become the way forward for most industries and the things are headed along that path in the logistics industry as well.
- Shippers rely on the marketplace’s carrier reviews, which aren’t verifiable, forcing shippers to analyze reviews themselves.
How can technology help to build a disruptive freight marketplace?
In order to overcome the hurdles faced by the freight marketplace by utilising various technologies to create a truly disruptive marketplace that would address the primary requirements of shippers as well as carriers.
Requirement: Trustworthy Marketplace services
Technical solution:
Here in the freight marketplace there will be a huge number of players who are unfamiliar with each other come close together on the freight marketplace. The success of such a marketplace is to ensure trust and reliability in each activity. A blockchain-powered marketplace ensures end-to-end integrity with track and trace, reviews, ratings, and invoice audits.
Requirement: Lane-dedicated critical Carriers Base
Technical Solution:
The strength of the logistics market place is evaluated by the number of carriers it hosts, as there are fewer carriers than shippers in the industry and these carriers need to spread out across various lanes. The marketplace gained popularity among shippers due to its extensive carrier base. Telematics provide real-time load information.
Requirement: Value-added services
Technical Solution:
Freight marketplace development requires to expand beyond order booking and execution. Faithful drivers will provide with value-added services like insurance, maintenance and ELD services. Introducing loyalty programs, driver classifications, and value-added services will attract more carriers to the freight marketplace. Telematics and gamification need to fully support and empower the driver base to deliver such services. Telematics and gamification will analyze driver behavior, providing valuable feedback to the drivers.
Requirement: Customised Spot Rates
Technical Solutions:
Analytics and probability-based intelligent algorithms will come up with instant and dynamic quotes for the customers. The key differentiators between freight marketplace software solution can offer customized spot quotes to the customers. Accurate spot quotes will lead to a quicker agreement between parties and maximize the number of transactions on the platform.
Requirement: Attracting Millennial Drivers
Technical Solution:
Millennial drivers place far greater importance on the work-life balance than their previous generations did. They prefer to work at their own time and around specific locations for this purpose. Millennial drivers, utilising technology and mobile apps, can form relay teams. Delivery divides into legs, each covered by local drivers.
Requirement: Omni-channel Engagement
Technical Solution:
Shippers are now becoming more tech-savvy and use various channels to access the information. To maintain engagement beyond websites and apps, utilise social media plugins, chatbots, and widgets for omnichannel engagement strategies.
The evolution of blockchains, advanced analytics and artificial intelligence with other technologies have generated a massive opportunity for the creation and development of disruptive freight marketplaces.By utilizing this freight marketplace, efficiencies can be driven through improved data insights, reduced operating costs, and streamlined services for a broad customer base. There may no more question about their place in the future of the logistics business industry. The freight marketplace development can smartly utilise new technologies in logistics management and adapt to the quick changes could well go on to become industry leaders in the logistics technologies and future of logistics industry.
For an online freight marketplace development require a broad range of technological tools and a team of innovative and experienced developers who know how to build an online marketplace solution. We krify is one of the leading Logistics marketplace development company UK as well as India. Get in touch with us to discuss your project and give a form to your thought.
