The realm of transport and logistics has had a wild last four years. Disruptive factors include the COVID-19 pandemic, technological advancements (particularly in AI), economic conditions, geopolitics, climate change, regulatory shifts, and the increasing demand for digitalisation in the industry.

These challenges continue to shape and influence the sector globally but morph into new shapes that may take time to recognise. With help from logistics experts at Descartes Systems Group, TechHQ clarifies four central emerging logistics and transportation trends set to influence business success in 2024.

1. Labour shortages

A recent Descartes study found that 76 percent of organisations are experiencing notable workforce shortages. The road transport sector specifically faces a pressing challenge with a shortage of HGV and van drivers, disrupting the timely delivery of goods across various industries. Manufacturing, healthcare, and e-commerce sectors, all heavily reliant on transportation, bear the brunt of this. To counteract its effects, companies must consider investing in driver retention initiatives and competitive compensation packages. The latest route optimisation software will also help to maximise delivery capacity without adding new drivers or vehicles. In the future automation solutions like autonomous vehicles for efficient last-mile delivery operations may become the norm.

2. Rising costs

Escalating expenses, encompassing labour, fuel, and raw materials, will impact businesses’ bottom lines in all sectors. Experts say that the price of diesel is poised to rise sharply in the coming year, impacting the bottom line of many companies that rely on road transport. Manufacturers are likely to see elevated production costs, whereas service industries could grapple with increased operational expenses. Effective cost management strategies such as process streamlining, enhancing supply chain efficiency, and astute sourcing practices will be imperative for businesses. Additionally, embracing sustainable methodologies and integrating energy-efficient technologies can provide long-term relief from cost pressures.

Source: Descartes Systems Group

3. Customer experience

The so-called ‘Amazon effect’ – where customers put more pressure on their supplier to know where their product is – has pushed customer expectations in logistics and home delivery to new heights. A Descartes study in 2023 revealed that 67 percent of consumers experienced a home delivery problem in the three-month period surveyed, and 68 percent took some form of action against the retailer or delivery company. Adapting to these expectations means that retailers should offer a range of costed delivery options and implement tighter time windows for deliveries.

Monitoring driver performance and providing real-time delivery status information to customers based on accurate GPS location data will help to manage proactively expectations. Ensuring third-party delivery agents reinforce the retailer’s brand and delivers to the same standards is essential. Businesses can enhance the overall customer experience by focusing on these areas, driving their respective industries’ satisfaction, loyalty, and competitiveness levels.

4. New business models

Companies are urged to embrace new business models centred around innovative logistics and electronic customer engagement in response to the imperative to reduce costs and enhance customer satisfaction. Distribution industries are transitioning from fixed delivery cycles to hybrid routes, improving cost-efficiency and service responsiveness. These adaptable models hold promise for replication across all sectors. Additionally, adopting eco-friendly delivery options, such as consolidating orders for weekly delivery and leveraging technology to identify more sustainable delivery routes, not only meets growing consumer demands for environmentally conscious practices but also contributes to cost reduction. As delivery strategies evolve, logistics leaders are encouraged to seek inspiration beyond their sector and seize new opportunities.

Meeting these challenges with digital transformation

Meeting the above challenges to drive success in 2024 and beyond necessitates a new approach accessible through digitisation. For example, by harnessing advanced analytics, AI and machine learning, companies can gain comprehensive insights into fleet operations, optimising routes and resource allocation to effectively navigate labour shortages and rising costs.

Integrated customer engagement platforms provide clients real-time updates and self-service options, fostering transparency and trust while reducing operational strain. Furthermore, proactive drivers’ hours management, coupled with innovative mobile solutions, ensure a culture of safety and compliance, mitigate risks and enhance overall operational efficiency.

Source: Descartes Systems Group

The unique needs of high-volume carriers can be met with enhanced strategic and operational modeling capabilities. Integration with tachograph remote download devices enables intelligent route planning, ensuring compliance with drivers’ hours regulations while optimising resource usage. State-of-the-art load optimisation software enhances load-building accuracy, maximising payload capacity and minimising transportation costs.

The Descartes effect

Descartes route optimisation and delivery scheduling software offers transport operators and fleet managers an integrated solution to help address the challenges of labour shortages, rising costs, poor customer experiences and outdated business models. Descartes is seen as a trusted advisor for thousands of fleet operators, driven by the success of its customers. Global brands like Royal Canin, Ontex, and Sonepar – each with fleets from 15 to thousands of vehicles – have found savings and enhanced customer experiences by employing software solutions that optimise their logistics and fleet management processes. Schedule a consultation with the expert team today to discover how Descartes can take your business to new heights in 2024.

The post Breaking down the top four trends set to influence road transport and logistics in 2024 appeared first on TechHQ.

The challenges fleet operators face

In 2023 a record 463 British haulage firms went bust, epitomising a stark and distressing peak in the sector’s challenges. An over 10 per cent increase in HGV operating costs – thanks to escalating fuel prices – and diminished road freight volumes contributed significantly to the downfall of those companies.

The financial burden intensified as interest rates rose to 5 per cent over the latter half of the year, eroding already narrow profit margins. Simultaneously, a shortage of professional drivers amplified labour costs, with increased competition for skilled drivers leading to higher wages and demand for better incentives. The latest RHA Pay Report observed that a Category C+E driver’s weekly pay has increased by 6.4 per cent over the last year.

Source: Descartes Systems Group

In tandem with financial pressures, fleet operators face an ever-growing call for sustainable fleet operations and practices. Transport became the largest emitting sector in the UK in 2016, and the government intends to cut emissions by 78 per cent by 2035. Regulatory mandates attempting to help the country reach its targets, coupled with general environmental concerns, compel haulage businesses to adopt greener initiatives, reduce carbon footprints and invest in sustainable technologies. But while investments in eco-friendly vehicles, alternative fuels and route optimisation strategies are productive from both a regulatory and ethical perspective, those on tight budgets find it challenging to implement these measures cost-effectively.

Customers now anticipate faster, more flexible and transparent delivery services. They seek real-time tracking, precise delivery windows and convenient options for scheduling deliveries. Meeting heightened expectations requires fleet operators to revamp their logistics, invest in innovative technologies and streamline operations further.

Tackling the challenges digitally

To avoid a potential ‘death by a thousand cuts’, fleet operators are compelled to rethink their strategies comprehensively, including their technological solutions. However, many are haunted by digital transformations in the past that created more issues than they solved. Some systems failed to adapt to new delivery services critical for evolving customer demands, so planners and dispatchers resorted to external tools to cope with unexpected changes, bypassing the system’s functionality entirely.

Disjointed operational processes led to uncertain delivery times and negatively impacted customer satisfaction. Inadequate apps, poor performance measurement and outdated mapping only made things worse.

However, technology has moved on in recent years. The latest route optimisation, delivery scheduling, and mobile applications present a new opportunity for road transport operations to tackle challenges. By harnessing advanced algorithms and real-time data processing, these digital tools effectively optimise delivery routes, curbing unnecessary mileage and idle time. They can calculate distances between deliveries, speed and directional flow, cost of transportation, drivers’ hours and rest requirements and take into account clean air zones and route restrictions.

Data ingestion and rocesses like these drastically slash operational expenses linked to fuel consumption, and lower vehicle wear and labour costs by maximising the efficiency of each trip. Moreover, minimising fuel usage notably reduces carbon dioxide and particulate emissions, aligning with both sustainability objectives and environmental regulations.

Through intelligent route planning and delivery schedules, newer solutions boost the number of deliveries within a specific mileage to increase delivery densities. Fleet operators can also handle a larger volume of deliveries without a proportionate increase in resources, ultimately amplifying overall delivery capacity and the company’s profitability.

Latest-generation tools offer new customer-centric benefits too, including precise delivery windows, real-time tracking and flexible scheduling options. Customers can receive timely updates, and benefit from streamlined services and enhanced transparency. Ultimately, this leads to heightened customer satisfaction and brand loyalty.

The Descartes solution

It can be easy to be overwhelmed by the many options that make the same promises of new TMS platforms. It’s wise to look past the specifics of any product offering and focus on the supplier, assessing its financial stability and ownership. Opting for a financially secure publicly-listed company with a proven track record ensures a more informed decision.

Source: Descartes Systems Group

Another green flag is a supplier that emphasises data security standards like ISO27001 accreditation and its access control measures, facets that demonstrate a commitment to data privacy and integrity. Those who develop their products in-house can also support users and expedite issue resolution, ensuring better operational efficiency. Prioritising a cloud-based software as-a-service (SaaS) solution offers advantages for the end-user such as scalability, accessibility and lower OPEX costs.

A leading provider that ticks the various boxes is Descartes. The Descartes Delivery Management Software suite tackles challenges in logistics operations while significantly improving efficiency, reducing costs and enhancing customer satisfaction. It utilises advanced route planning and optimisation algorithms to minimise travel distances, increases delivery capacity by up to 35 per cent and reduces both fuel costs and emissions. Tts Delivery Management Software has achieved savings of over £1 million per annum for its users.

Thanks to the software’s ability to handle last-minute changes to orders and delivery services, planners and dispatchers no longer need to bypass the system and deploy so-called shadow IT in the form of unauthorised applications. Real-time tracking capabilities eliminate the need for drivers to call in with progress updates, and accurate ETAs reduce inbound calls due to guestimated service times.

Descartes’ Delivery Management Software consolidates multiple functions like proof-of-delivery and navigation, minimising the need for multiple apps that drivers need to handle. Additionally, the software ensures up-to-the-moment mapping data, and enables testing delivery options in a ‘sandbox’ environment to pre-test the best delivery strategies.

For fleet managers, Descartes’ solution offers robust analytics, enabling easy measurement of route and driver performance and, therefore, the continuous optimisation of operations. By providing an integrated suite of functions (encompassing routing, mapping, compliance and customer notifications), it eliminates the need to liaise with multiple software vendors. The company’s roadmap of future development offers a clear vision of the software’s evolution. It’s a platform that will not become obsolete, growing and scaling with its customers.

Success in action

SIG, a prominent European provider of specialist building solutions, recognised a need for operational optimisation and enhanced customer service for its fleet of 500 vehicles and 170 operating centres. Seeking innovative solutions, SIG forged a partnership with Descartes.

Beginning with Descartes’ Vehicle Routing and Scheduling (VRS) system, the company expanded the successful collaboration to embrace the full suite. This transformed its operations, receiving superior tracking data, service visibility and won significant operational efficiency. Access to comprehensive data resulted in a 25 per cent capacity enhancement and up to a 15 per cent increase in On-Time-In-Full (OTIF) deliveries.

Source: Descartes Systems Group

Edward Corbett, Head of Programme, SIG, said: “The introduction of handheld terminals (HHTs) and electronic proof-of-delivery (ePOD) software improves the interaction for drivers and therefore their ability to connect with clients and provide more visibility throughout the process.”

Embracing the HHTs and ePOD software also substantially aligned with SIG’s carbon-zero ambitions, reducing paper use and promoting sustainability. Implementing optimised routes curbed unwarranted mileage, ensuring better efficiency and reduced waste.

Mr Corbett added: “This technology has allowed us to be agile, forward-thinking and to work optimally with our fleet with benefits on costs, sales and satisfaction across the business and with our customers. Achieving this improvement in capacity and increase in the volume of deliveries shows a real forward movement for us, and the data we now have from this system gives us the ability to make informed management decisions to optimise the fleet and our business.”

To learn more about how the Descartes routing, mobile, transport and compliance management solutions can help your businesses tackle the challenges of contemporary logistics, contact one of the expert team today.

The post Overcoming the biggest challenges fleet operators face in 2024: Rethinking digital fleet solutions appeared first on TechHQ.