Collaborative logistics is the future (and the now) of successful, risk-managed logistics and supply chain management. There is no greater demand than what market forces, competitors, and Black Swan supply chain events 3PLs and freight brokers have to meet the challenges shippers face. Carriers are struggling to remain profitable. The industry is dealing with a global pandemic that is causing spikes in certain sectors and hollows in others. The only way to survive, remain flexible, and resilient, is by using a single pane of glass, with collaboration weaved throughout every single process from order to cash. Collaborative logistics is the only way for the industry to move forward in a profitable, risk-managed way.
Major risks continue to permeate the global supply chain, and companies continue grasping at straws to build a better logistics mousetrap. For freight brokers and 3PLs, timeliness, accuracy, and completeness of data are critical value-adds to procure for their clients the best rates and avoiding disputes with carriers. Failures to share the right data when needed will only breed hostility and create big problems in the global logistics landscape. For domestic freight brokers to succeed, they need a capable, 100% scalable solution that delivers; they need a collaborative logistics platform. Don’t take my word for it. Look at the facts that surround poor collaboration and how collaboration boosts profitability and mitigates risks along the way.
Market instability in Asia, following a pronounced slowdown of manufacturing, has led to supply chain disruptions in the domestic market. Meanwhile, demand for household necessities and medical supplies has risen to unprecedented levels, and supply chain partners are struggling to keep up with this new reality. That only scratches the surface of the bigger problems in the industry. According to William B Cassidy of JOC.com, shippers continue to force truck drivers to wait longer times during loading and unloading. Shippers need visibility into the true frequency and duration of driver detention that’s causing increased freight spend. And Freight Brokers need a better way to do check calls. Talent you hire wasn’t meant to make annoying phone calls or texts to answer the age-old question, “Where’s my Freight.” That’s what integration via APIs was built for. We can now integrate into ELDs or have carriers use an App (that they actually gain benefits from too) to easily answer “Where’s my freight?” all while providing collaboration with the shipper or the Freight Broker arranging the shipment for their customer. Collaborative logistics is not a zero-sum game. It’s a “win-win-win” between all the trading partners in the process of moving goods.
For years, the solution has been to increase visibility and take advantage of third-party resources, but problems remain. Collaboration is a goal, not a reality for most, but a single pane of glass, a logistics system of record, if you will, with collaboration built contextually at every single process in the supply chain, brings that goal into reality, today. With a collaborative mesh platform, 3PLs, freight brokers, shippers, and carriers can finally collaborate in real-time, easily to work together and solve problems, mitigating risk, seemingly before they ever occur.
The problem boils down to a failure to understand both vertical and horizontal relationships that require data, explains the Asian Journal of Shipping & Logistics. A company that fails to share data horizontally will see problems with consolidation and limited access to rates.
Companies that fail to share data vertically may incur surprise invoices that reflect the actual need, not the need that was originally described in a frantic phone call or email. Without the right information available, freight service providers, such as freight brokers, are stuck with the best guess, and all too often, the best guess is far from reality. To overcome this problem, everyone needs more accurate and timely data, documents, and information, able to be worked on together, in real-time, as a cohesive team made of vendors, customers, and partners. Think about what Google Docs did to solve the old “Save after you make the updates, and highlight what you changed in red, so I can tell who made the change….and for the love of GOD please do not save over this version without renaming it!” To this day, it hurts my brain when that STILL continues in enterprises today. People, there is a better way!
More data within the supply chain helps shippers keep informed of what’s actually happening. The Amazon Effect created a new standard for transparency in global trade, and now, every aspect of logistics falls under the microscope. People want Amazon-like transparency and speed, not to mention the Amazonian low-cost. The only way to keep logistics costs and expectations in check lie in effective collaboration. For instance, companies have found ways to manage global contacts and suppliers, reports Global Trade Magazine.
Nothing is left to chance. More collaboration relies on connected systems, improving global visibility with real-time tracking and monitoring, centralizing data and document storage, protecting against the uncertainty. To set the standard, freight brokers need a way to see everything—all possible influences—to keep their customers’ freight spend under control. In fact and according to Deborah Lockridge of TruckingInfo.com, a broker that uses the latest visibility tools “offer better customer experience and provide themselves a differentiation. The difference today is in pricing visibility that allows carriers to make a decision on a price immediately. In the past when you got a tender, you had a contracted price you agreed on through some bid process, or you picked up the phone and negotiated a price. The pricing is now part of the communication mechanism. Brokers and shippers are able to do that because the pricing data available is so much better and so much more reliable.” And of course, everything is right there, all in one platform, with the additional benefit of contextually communicating not only with the carrier in real-time, but, also the broker’s customer…all without logging into another system or picking up the phone.
Given the ability to reap insights and facts from data-driven systems and visibility throughout all partners, the question then becomes “how does a freight broker really leverage collaborative logistics to drive value?” The answer lies in following a few best practices to maximize collaboration and derive more value from data. These include:
Collaboration has never been more important in the ever-changing, critical supply chain, and logistics industry. Companies want to maintain autonomy and reap the benefits of the shared data economy, and advanced collaboration platforms finally are in the position to encourage buy-in and reduce inefficiencies. Let’s face a final fact. Manufacturers do not have the margins needed to accommodate higher freight spend from your company. Customers are unwilling to pay extra for what should be standard shipping. Your business hinges on the ability of your partners to deliver on time, avoid delays and exceed the customers’ expectations. But, how can you provide all of that without seamless collaboration? You simply can’t. The future of logistics is collaborative. Convince me I’m wrong. 😉
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