Freight Logistics modern challenges

What challenges do freight logistics companies face today?freight logistics companies

It doesn’t matter whether a company handles their own freight logistics or outsources to a third party logistics company to do the work for them, the challenges facing the industry in the future remain the same. Logistics is a huge part of the UK economy and while it has seen a downturn in the recent lean years, it remains in a better position than many industries. Yet development and change is inevitable so what are the modern challenges companies face?

On the road

There are many elements to freight logistics but one of the biggest is not likely to change in the near future – the necessity of using road networks. Yet this very simple fact presents the biggest challenges to the future of the transport logistics industry due to increasing congestion on the roads. The longer it takes to get from point A to point B, the less profit there is to be made in the journey.

Also, the more congested roads become and the slower the journey is, the more fuel is used. Fuel prices have seen a lull in recent times, even going down for a few weeks but in the near future, the trend is that they will increase once more. Some industry experts predict that within five years, the price of a barrel of oil will be around £80, with higher peaks. This means that saving fuel will be crucial and maximising haulage efficiency will be the name of the game.

Retailers are looking likely to aim at reducing their inventories to reduce their own costs, meaning that freight logistics companies will face smaller, more frequent deliveries. This could mean the prospect of collaborative agreements with different customers to ensure every vehicle is filled in order to maintain margins.

Going green

The increasing cost of fuels and the general pressure on businesses to ‘go green’ will also have an effect on the future of the industry. There will be more experimentation with green fuels as well as new types of vehicles – longer trailers, more aerodynamic designs, even the addition of solar panels to the cabs of vehicles. All of these moves will reduce the need for traditional fuels and allow businesses to promote themselves as better for the environment, potentially a contract winner in some cases.

Tied up with the environmental concerns is the view that more and more road freight should be switched to other means of transport. Since the Whitepaper of 2011 from the European Commission said that around 30% of road freight should be shifted to other transport means by 2030, the hunt has been on to find solutions.

Driving up costs

Shortages of labour are other elements that companies are going to face in the near future. There is going to be more and more complex health and safety rules regarding the origin of drivers that will see the cost of labour for road transport will have risen by around 50%.

The fact is that in the future as today, businesses will always need their stock moving from one place to another and freight logistics companies will be at the forefront of this. However, with changing ideas and new challenges ahead, the look of the industry may be very different twenty years from now than it is today.

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