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Five mistakes in the logistics business and how to avoid them
The success of any logistics company depends largely on the quality of freight management and the ability to keep up with the times. If you overlook one important point, your business will quickly become uncompetitive.
Let's take a look at five key mistakes to avoid to keep your business afloat and thriving.
1. Incorrect calculation of the transport budget
Pricing is one of the most important steps on the road to success. Miscalculations will increase the cost of a trip and lead to financial loss, customer dissatisfaction, and a drop in your business's ranking.
How to avoid this:
2. Disruption of shipment terms
If you don't plan your loading terms correctly and the goods are not ready to ship on time - you will have to spend extra money on storage.
How to avoid this:
Better yet, automate the tracking of all stages of the shipment to minimise the risk of delays.
Let's take a look at five key mistakes to avoid to keep your business afloat and thriving.
1. Incorrect calculation of the transport budget
Pricing is one of the most important steps on the road to success. Miscalculations will increase the cost of a trip and lead to financial loss, customer dissatisfaction, and a drop in your business's ranking.
How to avoid this:
- Carefully calculate all associated costs (fuel, important paperwork, insurance, customs fees, storage costs, drivers, warehouse staff, movers, etc.)
- Include so-called ‘unplanned expenses’ in the tariffs. For example, a car may break down on the road and you may have to pay for repairs. The warehouse may flood, some of the goods may spoil due to the driver's fault. Or you may have to pay a fine for a traffic offence. Yes, yes, it happens.
2. Disruption of shipment terms
If you don't plan your loading terms correctly and the goods are not ready to ship on time - you will have to spend extra money on storage.
How to avoid this:
- Plan the shipping schedule carefully - take into account force majeure situations as well (e.g. the packer is sick and doesn't turn up for work).
- Make sure everyone in the supply chain is able to complete their tasks on time - this will help avoid downtime.
Better yet, automate the tracking of all stages of the shipment to minimise the risk of delays.
3. Errors and deficiencies in documents
Problems with documentation, lack of necessary certificates, permits and stamps will lead to the fact that your transport may be delayed at customs. And this means disruption of delivery time and, again, increased costs.
How to avoid this:
4. lack of process automation
Manual management of logistics stages will limit the growth of your business, reduce the efficiency of the company and increase the number of errors. After all, there is always a human factor involved: forgotten, mixed up, sick, etc.
How to avoid this:
Problems with documentation, lack of necessary certificates, permits and stamps will lead to the fact that your transport may be delayed at customs. And this means disruption of delivery time and, again, increased costs.
How to avoid this:
- Thoroughly check all documents, including shipping, transport and customs documents.
- Make sure (preferably through consultation with a lawyer) that the documents are correct.
4. lack of process automation
Manual management of logistics stages will limit the growth of your business, reduce the efficiency of the company and increase the number of errors. After all, there is always a human factor involved: forgotten, mixed up, sick, etc.
How to avoid this:
- Use WMS (Warehouse Management System) warehouse management systems.
- Use TMS (Transportation Management System) - a system that helps to manage all the processes of transporting goods. Also ERP (Enterprise Resource Planning) programme, which integrates all company processes (purchasing, sales, production, logistics) into one network, will help you.
5. Incorrect route calculation
If the logistician does not plan the route correctly, choosing a route that is too long or problematic, you will lose money and time. As a bonus, you'll get a negative reaction from your customers, who will start looking for better conditions and leave for your competitors.
How to avoid this:
Following these recommendations will help you create a reliable and efficient logistics system that can cope with challenges and maintain a high level of customer service.
If the logistician does not plan the route correctly, choosing a route that is too long or problematic, you will lose money and time. As a bonus, you'll get a negative reaction from your customers, who will start looking for better conditions and leave for your competitors.
How to avoid this:
- Carefully analyse and optimise your routes - look for the shortest routes on good highways, make provision for all sorts of risks that may arise on the roads. Don't forget to check the weather forecast - it's never a bad idea.
- Use specialised software to calculate the most economical routes and regularly review them depending on the conditions of transporting a particular product.
Following these recommendations will help you create a reliable and efficient logistics system that can cope with challenges and maintain a high level of customer service.