Every aspect of the transportation and 3PL industry runs on data. Information about how long it takes a shipping company to process an order, prepare a shipment, load the shipment, transport it and deliver it is readily available under a variety of systems.
This information can be used to improve process efficiency, determine future demand, decrease wasted fuel and time, and improve customer satisfaction. Companies can evaluate how data analytics can help them build a sustainable future for the business and their customers.
Increase Order Processing Efficiency
For many logistics companies, the greatest potential for efficiency starts with the order process. Companies can use data to evaluate the type of demand that they encounter at any particular time. This data can provide solutions to cut costs, maintain proper inventory levels and identify bottlenecks in the order process. With this information, logistics can save time and money, and increase the rate of completion.
Knight Transportation has recently deployed technology allowing it to provide rate predictions with a higher degree of accuracy. Customers can use this information to estimate shipping rates based on average demand, for better forecasting and inventory management.
Improve Inventory Management
Managing inventory makes the difference between successful purchasing and canceled orders and data analytics can bridge the gap. Inventory management requires real-time data about existing inventory, combined with sales forecasts and existing customer orders. The use of data analytics can allow companies in the transportation industry to make sure that they have the most up-to-date information for customers and their own processes.
The ideal TMS and CRM for freight brokers working in harmony together, allocates equipment and supplies to the areas with the highest demand. For example, XPO Logistics, Inc. uses data analytics to provide real-time information about future demand, to help its customers determine how to maintain the ideal inventory for future need.
Optimize Route Consistency and Efficiency
Optimizing the route has the potential to reduce costs and shipping times. While the route for a long-distance shipment may run the same every time, the delivery path in the last few miles often changes. Shipping companies rely on data analytics to evaluate the quickest and most efficient route, based on current traffic, gas prices, and delivery times.
With this information, companies can provide greater transparency about the shipping process to customers, delivery locations and more. J.B. Hunt recently improved its data management to allow an increase in access to real-time data about routes and shipping times, without compromising the security of customers’ sensitive information.
Predict Demand and Supply Chain Volatility
Being able to predict demand at every stage creates a picture that businesses can use to plan labor, equipment, supplies and revenue generation. Logistics companies need to accurately estimate how many customers will need to ship, as well as the average shipment size, location and distance. Data analytics offers the ability to identify patterns in customer behavior, with correlating data that helps companies plan. The data can also account for changes in the supply chain or a sudden increase in demand, updating forecasts so that companies can adjust their inventory and ordering accordingly.
For example, FedEx Dataworks has gained notoriety for its ability to predict demand and increase supply chain visibility, to reduce bottlenecks in ordering and shipping.
Promote Long-Term Customer Satisfaction
On either side of the process is a human with feelings and expectations, and data analytics can confirm that each party gets what they need. Shipping companies evaluate data about shipping completion, customer feedback and other factors related to delivery quality, to determine how often they fail to meet customer expectations at each stage of the process. This information provides a steady path to improvement.
For example, Schneider relies on AI and data analytics to provide rapid responses to customer questions that do not require human attention, such as the location of a shipment. With the use of this system, the company is able to ensure that customers get accurate information quickly, while lessening the workload of its own associates.
The use of data analytics in transportation and shipping is transforming the industry. Data can make it easier for companies to identify inefficiencies that cost them time and money, create shipping arrangements that maximize efficiency and accuracy, ride out inconsistencies in the labor market and supply chain, and figure out what they need to do to meet future demand.
Employing this technology can help logistics organizations keep pace with competitors — now and in the years to come.
