Challenges Faced by The Logistics Firms

The importance of logistics in the economy is rapidly increasing in comparison to the previous two decades. Logistics now accounts for about 10% of the economy. The current role of a logistics company in the e-commerce industry is to store and package items, as well as transport them to customers' doorsteps on time.

The logistics companies in Saudi Arabia are often referred to as the "backbone" of any supply chain. When it comes to connecting businesses with their customers, logistics companies play a critical role. Examine what we believe is a problem in relation to the current situation. The logistics industry is confronted with the following challenges:

Transportation Issues

The main challenge for logistics professionals is to reduce global freight forwarder costs. Transportation costs are an important aspect of the logistics industry. Fuel price fluctuations complicate matters even more. Fuel price increases have a direct impact on tolls, and companies pay more for shipping.

High freight costs force logistics companies to implement better strategies, but most of these strategies come with trade-offs: reduce the number of carriers rather than redistribute the load among fewer fleets, or negotiate for lower prices. Shipment consolidation may help to solve the problem, but it has a negative impact on deliveries and customers.

Port sector issues

Logistics companies bear an unfair burden as a result of excessively long turnaround times for ships as a result of dock overcrowding and delays in goods unloading. Because of insufficient landside and port infrastructure, as well as insufficient depth at ports, it is difficult to use coastal shipping on a large scale.

But IAP Logistics, we have a huge area of the port sector. We facilitate a Port warehouse, where a customer’s goods and products can be stored for a long time without any damage to the products.

Improving supply chain visibility

To ensure accurate, on-time deliveries every time, logistics firms must have complete visibility into the supply chain.

When something goes wrong with a shipment, send warnings and alerts so that immediate action can be taken if the shipment does not arrive on time. Customers must be able to track their purchases online and receive notifications about when they will arrive, such as shipping notifications and ETAs.

From a single location, logistics companies must be able to track the entire inventory receiving, storage, order management and fulfilment, and shipping process. Furthermore, they can see what is coming their way and adjust the size of their personnel accordingly. Real-time global shipment tracking also allows fleet owners and drivers to take immediate action in the event of a delivery delay.

Business process improvement

Regardless of the need for new technology, keeping up with new advances in business processes has become a growing challenge for the logistics industry. Taking advantage of these new opportunities may sound appealing, but adoption and onboarding can be difficult.

Tax structure and Warehousing issues

Because of the country's complicated tax system, logistics companies face a number of challenges. Many state and federal fees have significantly slowed road travel times. One of the few major issues in this industry is the poor condition of storage and its restricted locations.

Storage facilities for low-margin items are widely dispersed, making it difficult to establish a large integrated warehousing facility. The government-owned the majority of the large storage facilities where food grain was stored. IAP Logistics provides a wide range of custom bonded warehouses in which customers can store goods and products without hesitation.

Improving customer services

Every business and industry's ultimate goal is to provide the best customer service possible. However, the parameters for improving customer experience in the logistics and supply chain industries differ. The modern customer is technologically savvy and expects visibility at every stage of shipment as well as assistance at various touchpoints.

Besides these, there are other main logistic service provider challenges:

  • Visibility: Acknowledging how shipments are progressing, providing clients with real-time updates, and centralising information and data.
  • Capacity: Make sure your fleet has enough capacity, especially for road transportation and driver availability.
  • Economy: Increasing the predictability of variable costs, as well as incorporating both fixed and variable costs into profit margins and client quotes.
  • Customer value: Differentiating your service from the competition and establishing trust with your customers through the customization of your offers.

Lack of skilled professionals

A critical shortage of logistics experts and professionals exists. Because the workers are overworked and underqualified, a more efficient procedure is impossible. In order to save money, logistics personnel training and wages are foregone. In the long run, these organisations will face issues such as high employee turnover, rising training costs, and underperforming human resources.

How can technology help?

Technology is a driving force behind the success of many industries and domains, including transportation and logistics. Logistics companies can triple their revenue and double their on-time delivery by leveraging advanced technology. The use of technology and logistics can increase productivity by up to 80%. Logistics professionals can devote their time to developing new strategies to boost their company's growth rate.

To address these challenges and provide a fresh perspective on the logistics industry, IAP Logistics has developed new logistics techniques, equipment, data processing, and communication tools to incubate and encourage innovative solutions.

IAP Logistics is one of the most well-known and significant international freight forwarding companies, as well as the best top logistics company in Jeddah, providing trusted and dependable logistics services at a reasonable cost and taking your business to the next level. We can also handle all of your business needs, which include bonded warehouse services, freight forwarding services, and so on.