The global freight forwarding market is set to be worth 215 billion dollars by 2029 but as anyone in the industry well knows, seeing big figures doesn’t happen without innovative efficiency measures in place. There’s huge competition and staying ahead is a constant challenge.
One of the best ways to boost efficiency rates and stand out is to get comfortable with using data analytics. In this article, we’ll explore the key metrics that can be used to improve all angles of freight forwarding efficiency, as well as how data analytics can be used to optimize route planning, demand forecasting, and supply chain visibility. As the industry expands, data usage is becoming a significant determiner of how successful freight forwarders are.
7 Key Metrics to Track for Improved Efficiency
There’s almost no end to the metrics that can be used to measure freight forwarding operations but here are the 7 that most pertain to overall efficiency:
● Transit Time: How long goods take to travel from their origin to their destination says a lot about the overall efficiency of the routing and processing decisions being made. This is where any areas for improvement are likely to first crop up.
● On-Time Delivery Rate: This metric measures the percentage of shipments that are delivered on time. The higher these rates, the more companies can rest assured that operations are in ship-shape.
● On-Time Pick-Up: Similar to the above, the higher the rate of on-time pick-ups, the more efficiently things are running.
● Warehouse Turnover Rate: If the above rates are struggling, this is a crucial metric to check. It’s not always routing delays that are the problem but how quickly inventory is being managed and moved through warehouse spaces.
● Load Utilization: This measures cargo space and its utilization to indicate how well it's being used. It’s also a metric that can shed light on transit time delays as it’s often badly utilized space that can cause lags.
● Delivery Accuracy: Incorrect deliveries or damaged goods can cause major headaches. Delivery accuracy is all about measuring how many orders go to the right place, at the right time, and without customer complaints.
● Tonne-Kilometer Rates: Measuring emissions is something all freight forwarding companies are having to take on board to meet sustainability regulations, but there’s an efficiency benefit too. By measuring the tonnes of emissions emitted per kilometer, companies can see where inefficient fuel spending is happening and where money could be saved moving forward.
The Benefits of Using Predictive Analytics for Demand Forecasting
One of the most impactful strategies for optimizing logistics is investing in predictive analytics for better demand forecasting. Rather than simply measuring current data and telling you what’s there, predictive analytics integrates historical logistics data with machine learning and highly advanced algorithms to help predict where demand is headed.
This allows freight forwarding businesses to be more efficient in a number of ways, including:
● Capacity Planning: A better sense of incoming demand fluctuations means that businesses can make sure they’re not understaffed, for example, during busy periods, and thus stuck with delays.
● Pricing Strategies: Demand hugely affects the prices that freight forwarders can charge. Knowing where demand is headed means knowing when to stay competitive and when prices can be pushed up.
● More Synchronized Operations: The struggle of freight forwarding is in trying to accurately align with customers and business partners across the supply chain. Having a better sense of what’s coming allows all parties to plan better and be more responsive overall.
How Data Insights Can Optimize Route Planning
Data insights can improve almost all aspects of route optimization. They can be used to show traffic patterns, predict weather disruptions and the time they’ll cost drivers, fuel efficiency, which times of day are best to travel on certain roads, and where typical bottlenecks will occur.
The most accurate route optimization insights use a mixture of historical and real-time data, alongside predictive algorithms. There’s huge power in leaning on information like this as it can help companies make better decisions regarding detailed issues, as well as larger strategies.
Leveraging Big Data for Supply Chain Visibility and Overall Efficiency
Supply chains generate huge amounts of data. All that information can be the source of confusion but if leveraged properly, is the very key to better supply chain visibility. This is how big data can give companies a better handle on their supply chains and improve efficiency in the process:
● Warehouse Efficiency: Installing cameras and sensors in warehouses can provide information on temperature, shelf weight, and overall operational efficiency. It also helps mitigate fraud issues and catch instances of theft.
● Real-Time Monitoring: In this regard, the visibility that big data offers the supply chain isn’t simply metaphorical. Real-time tracking through cameras and GPS systems ensures that companies can see exactly where goods are and what condition they’re in at any given moment. This hugely reduces the risk of losses or delays and also means that companies can offer up-to-date shipping information to customers.
● See the Big Picture: Tracking goods is one thing, but big data allows businesses to combine data sets from multiple sources for a full-picture view. This allows freight forwarders to better respond to partners and customers and operate more seamlessly overall.
Data is the Future of Freight Forwarding
There’s no doubt about it, data analysis and the use of big data are fundamental for any freight forwarders looking to stay competitive. Data analytics can assist with everything from goods monitoring to demand prediction and route optimization, all of which then have a positive impact on a business’s overall efficiency.
Written by : Sheer Logistics https://sheerlogistics.com/
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