Inbound freight management is the new trend that can kick-start or terminate a company’s logistics line. Statistics show that most companies spend up to 40% of their budget on inbound shipping. Ideally, inbound freight can minimize transportation expenses in business to a great extent. Though inbound management can significantly improve reliability and make logistics operations smooth, it comes with its challenges. The following are some of the common inbound freight management challenges.
Lack of visibility
It is unclear to determine the amount a company expends on freight management. All the ordering costs are only based on tax and shipping estimates. Besides, security is not guaranteed asone does not know whether delivery is safe. Companies in question do not have complete peace of mind on the fate of the goods being transported. Therefore, they must contact customers and suppliers for additional details.
There is no prediction when it comes to costs. Lately, there has been a surge in rates. Truckload rates have increased by 14%, 15% in airfare and 11% rise in shipping rates. All these have made the entire process very expensive. Thus, managers have been forced to resort to other methods such as minimizing staff, cutting down a budget and centralizing shipping among other alternatives. However, such solutions require professionals or else it can worsen the situation.
Improper control from partners involved
Inbound management is a multifaceted task that requires proper cooperation and coordination from both parties. Though terms and contract are set, most parties hardly adhere to them. Additionally, in some instances, parties compete for control and each one wants to control the shipping line. However, in case a party fails to work as per the set guidelines, the company that buys the products in question will bear the costs. The results are always delays which may compromise the quality of the products. Buyers do neither have control nor a way of changing the terms contained in the contract even if there are undesirable weather conditions or any other emergencies.
Improper prioritization strategy
Managers have series of tasks to man alongside freight management. Therefore, it becomes easy to neglect shipment. It is critical to prioritize it as it plays a huge role in determining the performance and reputation of a company.
Despite the above challenges, there are ways that a company can utilize to minimize and eradicate them. Businesses must review their logistics lines critically to determine the existing challenges. By putting proper strategies in place and implementing them, the entire process can be smooth and simple.