India’s logistics sector contributes 13% to the country’s GDP, but this sector is still underdeveloped, segmented, and is highly inefficient.
Logistics is a complex activity involving planning, execution, and control of the movement/ placement of goods and/ or people, and the related supporting activities, all within a system designed to achieve specific objectives.
Transportation is one of the major focus among maintenance, distribution, storage. Transportation as a part of Logistics is a highly complex activity filled with many challenges.
CHALLENGES FACED BY TRANSPORTATION OPERATIONS:
1. Poor Road-Infrastructure
Poor roads lead to poor efficiencies.
2% of Indian highways consists of road infrastructure but they carry 40% of total traffic. The rate of increase in vehicles is greater than the rate of increase in road infrastructure. Due to poor road conditions and various check-point delays average trips of trucks are very less in India as compared to developed countries and this also decreases the speed of trucks to 20 km/ hour, which leads to cover only 250-300 km a day.
2. Poor Driver Working Conditions
Truck drivers themselves are low skilled and poorly paid. Long hours and multiple trips with delayed wages results in stress and fatigue for drivers which eventually increases the rate of accidents. A fixed amount is given to drivers which when exceeds the roadside expenses, leads to malpractices like overloading and fuel mixing, worsening company’s economy.
3. Check-points Delays
Despite a seemingly improving network of roads, around 60% of the time it takes a cargo truck to travel between key cities is still spent idling at multiple checkpoints.
As reported, time taken for any trip to complete is 2.7 days, instead it takes 10 days to complete the same trip due to checkpoint delays throughout the route such as entry tax, toll taxes, state tax, border tax, VAT etc. This has been improved due to the implementation of GST. However, the initial period of teething trouble is being faced, which is expected to be resolved in a couple of months or so.
4. Route Variability
Local language and routes encourages drivers to prefer certain routes diverted from the ones that are assigned. This results in 30%-50% of empty back-hauls as truckers do not have networks to connect with shippers in the destination city. Empty returns pull down profitability further.
5. Liquidity challenges
Working capital issues are prevalent in the long-haul segment. Increased payment cycles of 30-90 days also play a major since truck drivers demand cash down payment for the en-route expenses.
All these challenges cannot be resolved or met at Company-Level, since some require Administrative Support and Services from Government Authorities. But, some challenges can be resolved or mitigated by enabling your Trucking and Logistics Business with Technology. Technology enablement in Trucking and Logistics Industry can be seen in the form of online marketplaces which aggregate fragmented supply and demand, enabling visibility and improving utilization of carriers. There is an estimate that penetration of online models in trucking will increase from 2% currently to 10% in the next five years, as the positive network effects and improved utilization expectations driven by online models will drive rapid adoption on the supply side.
ADVANTAGES OF TECH-ENABLED TRUCKING AND LOGISTICS OPERATIONS:
1. Automated Truck and Load Pairing
In traditional trucking, brokers manually match shippers with carriers by making 300-400 phone calls per day and a transaction would take anywhere from 39 hours to 2-3 days to execute. Online platforms enable this matching and transactions within minutes.
Marketplaces that match loads and drivers are a huge boon for logistics. Drivers often drive to different areas or wait in search for a return load and using dynamic marketplaces is extremely useful in reducing such wait times as well as wasted miles. A digital freight marketplace which uses an automated matching system to pair Trucks and loads and has been able to reduce wasted miles.
Trucking-tech firms deploy algorithmic solutions that allow them to predict spot pricing and automate bidding for freight. This helps to reduce the price opaqueness, which is inherent in traditional trucking.
2. Driver and Vehicle Monitoring
Deploying innovations like sensor technology, GPS, and telematics to allow for better vehicle tracking, fleet and route optimization can further enhance fleet performance. The data collected allows fleet owners to perform preventive maintenance on vehicles and manage fuel efficiencies. Using route optimization technology, drivers can reduce running costs and missed jobs.
This would provide unbiased data, eliminate high-cost of maintenance, ensure Driver Safety and will allow to kill malpractices. It will also restrict unscrupulous use of Vehicles. Liability of their work execution will make your drivers conscious of their driving behavior whilst out on the road, ensuing in a more economically and environmentally efficient fleet with lesser road accidents and reduced operational cost.
3. Trip Planning
SaaS- based solutions such as dynamic routing, work-order management, commercial navigation, telematics, and mobile integration services allows effective trip planning. With the ability to process information for best and short routes to be taken, you can decrease the fuel consumption and engine usage. The Solutions will provide Intelligence-driven Trip Reports giving information like Driver’s Attendance, performance and efficiency that will allow to manage Payments and Salaries.
4. Maintenance Services
These services help you control expenses and alleviate the administrative burdens of scheduling repairs and services. By using these services, the driver and the management can focus on their actual business.
From routine services to emergency repairs, these solutions will be there assist you. This unique fleet maintenance solution will reduce risk, assist in budgeting, and eliminate unpredictable expenses and would provide unbiased reports.
Calendar organizer to schedule Tax, Insurance, Pollution check, license renewal is some of the features which will further, enhance the performance of logistics company by decreasing the time and manpower spent.
This will help save the environment by emitting less carbon in air. Automated record-keeping and bills will reduce dependence on physical records thus, saving trees that will keep that will keep the earth clean and green.
So, choose an intelligent Technology Partner for all these serviceability for your Trucking & Logistics Industry, to give your customers best experience and satisfaction of choosing you as their Logistics partner. You may try the solution from FleetRobo™ and visit www.fleetrobo.com for details.