Unlike the B2C world, the B2B line haul delivery model is seldom visible to the end customer. But that does not mean it’s any less significant or that it is easy to execute. There are some challenges in the line haul logistics space that are not new but some are evolving owing to the rapid rise in importance of the eCommerce and online retail industry.
Stiff competition, lack of standardization and manual dependencies, increasing cost of empty miles, poor routing and poor visibility of in-transit freight movement are some of the major problems that are creating significant roadblocks for businesses trying to execute seamless line haul logistics.
Owing low barriers to entry, the line haul logistics space is getting extremely populated. Many individual truckers with perhaps one truck are offering highly competitive pricing. This creates an ecosystem where most line haul providers are forced to reduce transportation charges at the cost of providing high quality services. This often results in a series of inefficiencies like increased risks, lack of adherence to compliance, delivery delays and poor customer experience.
Lack of Standardization and Manual Dependencies
Micro and small-businesses are known to drive the line haul logistics market and it’s difficult to standardize their services. There are hardly any regulations as to how many trucks these businesses can run. Some have one and some even ten. There is no proper regulation when it comes to having specific truck models and capacities. Hence, there is a high degree of variance in services these businesses offer, making it hard to put a standardization cap.
Then there are problems that surface owing to high-levels of manual dependencies. Line haul operators lack real-time tracking and tracing capabilities. They still depend on manual ways of locating truck in-transit. Even travel logs are recorded manually. Things like waybills, delivery notes and receipts, and others are handwritten without barcodes. Therefore, human errors, verification delays, trust issues, discrepancy between actual load and the load mentioned on waybill, and problems in authenticating documents are common in line haul logistics. Also, in absence of standardized market rates, shippers and truckers often resort to verbal negotiation that sometimes pan to be violent.
Increasing Cost of Empty Miles
A very traditional problem with the line haul logistics is escalating costs of empty miles. The difference between inbound and outbound freight traffic is a significant contributor to the problem. To cover the costs of trucks returning empty, businesses often fall back on things like overloading trucks on their onward journey, disratically increasing chances of road accidents and non-compliance. Well, it’s easy to blame the truckers for doing so, but at the same time it cannot be denied that running empty miles does not exempt business from bearing labour cost, fuel cost, toll fees, vehicle wear and tear, maintenance costs and more.
Poor routing has snowballed into a major problem for businesses dependent on and executing line haul deliveries. Only a handful of businesses leverage modern routing tools to plan delivery routes. Businesses that generate routes manually and track trucks manually tend to start a series of inefficiencies like prolonged delivery time, delays, increased chances of risks, unnecessary fuel consumption, poor driver productivity, inaccurate benchmarking of route performance, poor SLAs and more.
Lack of Visibility
It’s a known truth that poor visibility has been choking line haul logistics operators for decades. According to SupplyChainDive, 94% of businesses do not have full visibility of their logistics operations. The problems that come with poor visibility gradually eat into a business’ revenue, efficiency, productivity and customer experience.
The question is why is it so difficult to achieve high levels of visibility across line haul operations? Traditional means of executing operations is one of the major reasons behind poor visibility. Legacy IT systems work in silos. This makes it extremely difficult for line haul stakeholders to get a holistic picture of all that’s happening on the ground.
In the case of traditional logistics management, for instance, when an order moves from a warehouse/ports to a central hub for final dispatch to customers, there is little or no in-transit visibility of those orders. This happens majorly because the warehouse management systems (WMS) and the systems being used by line haul providers are not interoperable. Similarly, a shippers transport management system (TMS) is not in sync with a line haul provider's tracking tools and so on. With regards to those businesses who do have any systems in place but only manual methods of overseeing line haul operations, the situation is worse.
We spoke about the five-key problems plaguing line haul operations here, in our next post we will talk about how to address these challenges. At FarEye we are empowering businesses to drastically improve line haul operations and management. From reducing empty miles, enhancing visibility to reducing manual dependencies, FarEye’s logistics platform is ensuring seamless movement of freight across the globe. To know how we would request you to sign up for a quick demo here.