The traditional business model of logistics service providers is in need of change. With sustainability on the one hand and ever-increasing customer requirements on the other, the sector is in a serious split. That is why the sector is searching. Which revenue model is future-proof? And how do we set this change in motion? In my opinion, the right approach will ensure that you actually get more opportunities.
Sustainable work is a must
Sustainability is no longer a non-committal option, it is the path we take as a society. Logistics service providers have to go along with it. Transporting air is no longer contemporary; earning as much money as possible in as large a volume as possible can hardly be reconciled with sustainability requirements.
Sustainability: opportunity or threat?
That means quite a lot for the margins in the industry. Shipments will increasingly consist of smaller packaging and ultimately fewer pallet spaces. Much better for the environment, but it is at odds with the current revenue model. The smaller the packaging, the more effort is needed to load a lorry. I also expect legislation on a minimum load factor for lorries in the near future. The question is whether the current earning model of a fixed price per lorry is still so realistic.
Adding value offers opportunities
The loud call for optimal loading can also be to your advantage. If you succeed in making an efficiency leap in this process, you can load optimally – at minimum cost. Your customer has to pay less for pallet spaces or space in the warehouse. Less volume means less turnover in the short term, but that loss is (partly) recouped by a more efficient way of working. But even more important, you invest in the long term, in a partnership with your customer. You show that you think along with them in their sustainability objectives, that’s what your customer benefits from.
The key is a more efficient packaging process
Such an increase in efficiency can easily be achieved by automating the process of order picking, stacking and loading. A software program supports you in the efficient planning and execution of this. The first priority is to minimize the number of packaging units, then calculate in detail how the available volume can be used optimally. Your employees no longer need to work out the loading plan themselves by measuring and fitting, but can get straight to work. That time saving pays off immediately. What’s more, the loading is now automatically optimal and your storage costs are reduced. And your customer satisfaction is guaranteed. After all, not only do you help the customer by transporting more sustainably, the chance of error is also considerably reduced by automating the process and instructions.
The benefits of automation
As soon as you enter the order, you will already know exactly the optimal loading, the number of boxes, pallets, weight and volume. This means that you can plan much more effectively in FTEs, shelf space and transport. Clear packing instructions save time in the packing process. Furthermore, your performance will greatly improve, because with the right loading you prevent transport damage. Moreover, the delivery is guaranteed to meet all individual customer requirements. It is impossible for employees to know all customer requirements by heart; for a software program, that is a breeze.
Extra added value for your customer
I also see opportunities in sharing information. The more knowledge you share with your client, the better you help the client. If you automate your packaging process, information about the number of boxes, pallets, weight and volume is already known as soon as the customer places the order. Share that knowledge with your customer, so he too can plan his FTEs, shelf space and transport more effectively. And is the pallet, box or container not yet optimally loaded? If so, indicate this directly in the order confirmation, so that the customer can increase his order for more sustainable loading.
How do you see the future?
This is your chance to show that you have more to offer as a logistics service provider: you can help your customer to be more sustainable. I look forward to seeing how you see this. Does the solution lie in offering added value combined with a more efficient process? Do you also feel the urgency to start the change process now? I would like to hear how you see the future.
Would you like to know more?
Read more articles here, we are happy to share our know-how on packaging with you. Would you like to discover how we can help you to load more efficiently while maintaining your margins? Then try our software programme StackAssist free of charge for 30 days now.
Berry van den Oever – Managing Director
FPC Beyond Packaging