The logistics industry relies on the clockwork precision of IT systems to coordinate the movement of goods across the world for millions of clients. At many points in the history of logistics, the industry has made cutting-edge advancements in its application of technologies, including enhancements in physical assets and computer assisted dispatching and tracking.
While these advancements have proven valuable to moving freight, the industry has lagged in advancing the customer experience.
Looking down any list of carriers or 3PLs highlights that the focus for these companies is first-and-foremost on moving freight, not on the shippers’ experience.
This lack of attention has contributed to a trend in the industry – since deregulation in the 1980s – towards commoditization. As carriers converge on service expectations, there’s nothing left to compete on except for rates.
There is a tremendous opportunity hidden here in plain sight.
Transportation is a high touch business where companies routinely interact with customers wanting information on their shipments. Clearly, there is value to shippers in having transparency in the shipping process and having access to important information at their fingertips.
Many companies are looking to capitalize on big data and self-driving technology as the next major innovations in the field. While these are sure to turn the logistics industry on its head, there are business improvements that are closer to home that offer transportation providers a competitive advantage.
The key lies in pursuing a holistic and intentional customer experience.
Arriving at this destination involves a mix of technology and human interaction to maximize both efficiency for shippers and the value they receive from information.
Instead of simply getting goods from point A to point B, logistics providers need to think of themselves as a strategic asset. Making this shift means thinking through the big picture value for customers.
It’s not about claim rates and transit times. It’s about giving customers insights into their businesses which can drive improved performance, savings, and value for their own clients. These insights, in turn, shape the kinds of services that shippers will demand moving forward, which provides an opportunity to control the customer experience far beyond today’s transactional environment.
Operationalizing the Customer Experience
So how do we get from here to there? We’ve already seen that it takes a combination of human interactions and technologies to make a positive customer experience in an industry as complicated as logistics.
In making the switch, logistics providers will find challenges in adapting to cultural changes and in adopting the technological and analytical proficiencies needed to gain insight into their customers’ needs.
The Technology to Make It So
The tools needed to tie teams together around a great customer experience can range from custom-built enterprise solutions to lightweight solutions that are fast to deploy. At their core, though, all of them are designed to do two key things; capture data and communicate information.
Companies laying this infrastructure for the first time need to consider a few things in determining what tools to use.
- What information do team members need to do their jobs better?
- What data do customers value most and how can it be provided to them?
- What is the value of getting different departments in the company sharing information including Sales, AR, Claims, and Customer Service?
In the digital age, information is valuable, but it’s a value center that the logistics industry has barely begun to explore. While this will ultimately arrive in the realm of big data and artificial intelligence in coming years, major gains can be realized with just a few tools.
CRM (customer relationship management) and TMS (transportation management software) tools have both been around in various forms for years now, yet it’s surprising how many 3PLs are still underutilizing these systems, or not using them at all.
In addition to these essential back-end solutions, client portals that provide access to up-to-date shipping data are increasingly becoming an expectation of shippers. In providing this information to logistics customers, what Amazon is doing for B2C is becoming the gold standard for B2B.
The bottom line is it’s no longer enough to capture data for internal use. Providing useful insights to customers is part of the value expected from carriers, and especially from non-asset providers.
This new expectation means interpreting raw data into information that shippers will find useful. It also means finding ways to get that information in front of them. In some cases, this means web portals and email summaries. In others, it means getting in front of them personally through account management, customer success, and consulting services.
Making a Culture of It
The reason you’re in the logistics business is that you know more about getting goods from point A to B than other people. Most transportation professionals fail to understand the potential value that their knowledge adds to the equation.
For freight carriers and logistics providers alike, there are many areas of expertise sequestered in the back-end of the organization that could provide value to shippers (and especially small shippers) in navigating the intricacies of the industry.
Logistics providers can tap this deep-seated operational knowledge by finding channels to make it accessible to customers. This can include technological solutions such as rate and freight class calculators, but more importantly, it means putting experts from across your company in direct contact with customers.
These experts can include NFCA classification experts, packaging specialists, and lane analysts.
Not only does access to these individuals provide value above and beyond the transactional nature of shipments, but it also provides new potential revenue streams for the companies that provide them.
For many logistics providers and carriers especially, expanding the relationship with shippers in this way involves a culture shift. The norm in the industry has traditionally been one of confrontation instead of customer centricity.
It’s likely that, by expanding the scope of the relationship to provide value beyond the commoditized movement of freight, confrontation in the industry will be reduced. It will also see improved communication with the implementation of easy to use customer portals and ticketing systems.
Beyond this, though, there’s a lot of room for logistics providers to get a broader set of their team in front of shippers, understanding their needs, and attempting to solve their challenges.
These kinds of changes are company-wide and need attention directly from the top to be successful.
Making it Happen With Limited Resources
Of course, the challenges in making these changes are far from academic. Making them involves committing time and resources that could also be used in other parts of the business.
Many will argue that investments such as updating equipment and promoting driver retention are just as important as improving the customer experience. Looking for new value centers in the logistics industry while promoting a positive customer experience offers the only escape from today’s race to the bottom.
Many of the big players in the industry have already begun moving their organizations in this direction, but many of the easiest steps to take remain untouched by even mid-sized companies.
Thankfully, today, acquiring advanced business software has never been easier. Complex custom builds are becoming far less necessary than they once were and tying together different platforms can now be done even without the aid of an IT team.
Furthermore, by outsourcing software needs, smaller logistics companies can focus their efforts on engaging their customers and moving freight instead on administering systems.
While there are a lot of options out there for those looking to begin their journey towards a technology guided customer experience, sites like Capterra are a tremendous resource for getting started. Check out its customer relationship management software and logistics software categories as excellent starting points for those looking to further explore some of the technologies discussed in this post.
The logistics industry has lagged behind others in its adoption of tools and techniques that could contribute to a dramatically improved customer experience. While the specter of self-driving trucks and big data loom on the horizon, focusing on shippers needs offers an immediate way to reshape the competitive landscape of the industry.
Looking for Data Visualization software? Check out Capterra's list of the best Data Visualization software solutions.