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Known primarily for its oil exports across the world, Saudi Arabia is set to become the go-to logistics hub, efficiently connecting trade across the continents of Africa, Europe, and Asia. The value of the Saudi Arabian logistics market is expected to exceed 38 billion in 2026 from 29 billion in 2021.
This growth is primarily led by several factors, such as its strategic location and the rapidly growing eCommerce industry. However, when orders spiked during the pandemic, businesses were unable to handle the increased workload, which exposed the inefficiencies in the Saudi Arabian logistics industry, such as poor intermodal connectivity, fragmented market, poorly managed last-mile logistics segment, etc.
To tackle the above challenges and deal with customers’ rising demands, such as faster deliveries and shipment tracking, businesses need to digitize at a faster pace and transition to more efficient and smart logistics software in Saudi Arabia.
Below, we discuss in detail the different challenges businesses in Saudi Arabia face and how reliable logistics management software can help tackle them. In addition, there are ten important things to consider before choosing the right logistics software in Saudi Arabia to help businesses make informed decisions.
Saudi Arabia has been consistently putting efforts and making reforms over the years to diversify its economy by reducing its reliance on oil exports and becoming a region’s go-to logistics hub.
Take the National Strategy for Transport and Logistics, for example. One of the objectives of this strategy is to improve the connection between road, rail, air, and sea transport to enhance freight services and integrate smart technologies such as automation across all logistics infrastructure.
Another important objective of the strategy is to become one of the top ten countries in the Logistics Performance Index from the 55th position.
More stress is being laid on developing logistics infrastructures such as logistics parks, ports, and intermodal connectivity, creating more opportunities for the road freight industry in KSA, which handles the most transportation and logistics activities.
However, to achieve the goals set by the government and to deal with the challenges of the logistics industry, such as last-mile connectivity, operational inefficiencies in the road freight market, digitization, and adoption of modern logistics software in Saudi Arabia, are required.
Below, we talk about some key challenges that need to be handled to ensure consistent growth of business in the logistics industry.
With the increasing internet penetration in Saudi Arabia, the eCommerce industry is growing at an unprecedented rate. For instance, the Saudi Arabian e-commerce market is expected to grow at a rate of 23.85% annually to reach 17.5 billion in 2022. However, as the eCommerce industry grows, the number of orders and locations from where the items are ordered will also expand.
It means businesses now have to process more orders and serve more locations, managing which is quite complex, considering the situation of the last mile delivery segment. Logistics businesses need smart logistics software in Saudi Arabia to help them make last-mile deliveries more efficient, serve more locations, and meet customer demands.
The logistics industry in Saudi Arabia fails to produce enough talented experts that can manage the operations in a more organized or efficient manner. This leads to operational inefficiencies, making it hard to deliver the shipments on time and adding to the logistics costs.
However, with smart logistics software in Saudi Arabia that automates different tasks, businesses can reduce human reliance and thus deal with a lack of expertise in the industry.
Because of a lack of sufficient expertise and the adoption of a modern logistics management system, logistics businesses fail to meet the demands of the customers. Often, shipments are delayed, and the consumers aren’t informed in real-time about their shipment status, which degrades the service quality and causes customer dissatisfaction.
However, a smart logistics platform that helps businesses improve operational efficiencies and offers complete visibility of logistics operations could enable them to deliver shipments on time, reduce shipment costs, and offer real-time tracking status, thus improving service quality.
Without real-time visibility and monitoring, businesses often fail to determine the exact location and status of the shipments. This often leads to miscommunication and creates problems, especially when the shipment gets stuck because of traffic congestion, an accident, or any other roadblock, leading to unnecessary delays and ETA SLA breaches.
Logistics management software that offers real-time visibility to all the stakeholders is required. Such software would allow businesses to closely track the movement of their shipment and take appropriate action if something comes up. Also, such software can send automated alerts to customers, updating them on the status of their orders.
Yet another big challenge that businesses in the logistics industry in Saudi Arabia face revolves around temperature-controlled logistics. Because of extremely high temperatures across Saudi Arabia, it becomes hard to ship perishable commodities that are temperature sensitive such as meat, drugs, etc., calling for temperature-controlled trucks.
However, such trucks consume quite a lot of energy, even when they’re at a halt. Therefore, businesses need to use modern logistics management software in Saudi Arabia to optimize the route effectively, ensuring the least energy is spent, thus saving on logistics costs.
In this section, we talk about ten indispensable features every logistics software solution in Saudi Arabia must have. Logistics businesses must consider these features while looking for reliable logistics software to make an informed decision.
One of the essential features of logistics software is automated route planning, which reduces reliance on manual elements. Automated route planning software allows businesses to find an efficient route from source to destination that helps the driver to cover the maximum number of spots in the shortest distance, spending the least amount of time and fuel.
Using automated route planning, businesses can significantly save on logistics costs and ensure timely deliveries and maximum vehicle utilization, thus improving the overall customer experience.
The logistics industry is quite unpredictable. So much so that hundreds of last-minute orders and return requests can pop up at times that are impossible to handle using manual route planning methods leading to poor service quality and, thus, poor customer experience.
However, a dynamic route optimization tool can save the day. With dynamic route optimization, businesses can smartly club new orders with the ones that are already planned for delivery, accommodate any return requests, and instantly re-route in case of bad weather congestion or when a customer reschedules the order. This ensures a smooth movement of all orders and improves customer experience.
Logistics businesses in Saudi Arabia often opt for 3rd party logistics companies to reduce their burden and meet rising needs without having to build new infrastructure. However, outsourcing operations to multiple 3Pl logistics partners can be quite complex as businesses often experience a lack of control and visibility over the operations.
Therefore, businesses must ensure that their logistics software in Saudi Arabia comes with multiple 3Pl management. With such features at their disposal, businesses can manage multiple 3PLs from a single dashboard and have complete visibility and control over operations.
A reliable logistics software must offer end-to-end logistics management, i.e., allow businesses to manage and streamline all three legs of logistics, i.e., first, middle and last mile. It must offer businesses complete visibility into all the processes involved in the movement of shipments right from the source to the destination through a single dashboard.
When everything can be managed from a single dashboard, it saves businesses time and money, as they don’t have to opt for individual software for every process involved.
The Saudi Arabian government is investing a lot in improving the logistics industry and is also promoting digitization. Therefore, businesses must look for logistics software that allows them to digitize their operations.
For instance, several logistics operators rely on paper-based documentation. And paper-based documentation is quite hard to maintain and access and often gets lost, which delays border clearance and other processes that require documents. However, digitizing documentation could help businesses manage everything in a digital locker and present or update the documentation almost instantly and in real time.
While technology adoption has increased in Saudi Arabia, especially after public and private companies, along with the government, backed it up, several operations, such as route planning, preparing invoices, and other back-office tasks in logistics companies, rely on manual elements, leading to operational inefficiencies.
Therefore, businesses must look for logistics software that allows them to automate redundant tasks. Automating tasks will help businesses get more work done in less time and reduce reliance on human elements, operational inefficiencies, and the margin of error.
Logistics companies across the world are making efforts to reduce carbon emissions to contribute to the government’s effort to achieve sustainable logistics. However, if businesses don’t know which sources are responsible for the maximum carbon emission, they cannot effectively deal with the issue.
Therefore, businesses must find logistics software that comes with a carbon emission tracker. By entering a few details, businesses can determine which shipment will have the most carbon emission even before the journey is started. This way, logistics companies can optimize the route, vehicle, or shipment to drastically reduce the emissions and thus contribute towards making logistics more sustainable.
Without real-time tracking and monitoring, businesses never know their shipments’ accurate location or status. And when the shipments get stuck because of a delay in border clearance, traffic congestion, or any other roadblocks, the logistics operations cannot make the right decision at the right time, which leads to delays in deliveries and poor customer experience.
To tackle this issue, businesses must opt for logistics software that comes with real-time tracking and monitoring. This way, businesses can be aware of the exact location and status of the shipment and can take appropriate action if delays occur, minimizing the damage.
Another important feature to look for in logistics software is dynamic ETA. This feature enables businesses to auto-update the ETA dynamically in case the shipment gets stuck because of a roadblock or any other reason. It informs all the stakeholders, including the customers, of the updated ETA, significantly reducing the ETA SLA breaches.
A digital PoD is essential for businesses to identify customers that, even after receiving their order, raise false complaints of missed and failed deliveries, impacting their bottom line. Also, the NDR helps businesses determine the reason behind non-delivery and rectify the same to ensure that the package reaches the customer safely.
With such functionalities at their disposal, businesses can ward off fraud/dubious customers and detect inefficiencies in their systems, thus improving customer experience. So, businesses must choose logistics software that offers PoD and ND.
Shipsy is an AI-powered custom SaaS end-to-end logistics management platform that helps logistics companies manage and streamline their operations effectively. No matter how unique a business’s requirements are, Shipsy’s logistics management software in Saudi Arabia can be customized to meet those requirements.
Without automated route planning and dynamic route optimization, businesses can plan the most efficient route for shipments and dynamically update the same in case of any discrepancy to ensure timely deliveries, reduce logistics costs, and maximize vehicle utilization.
Businesses can manage all three legs of logistics, first, middle, and last mile operations, seamlessly using Shipsy’s end-to-end logistics management software. Also, Shipsy offers full control and visibility over multiple 3PLs and makes management easy via a single dashboard.
In addition, with Shipsy, businesses can perform real-time tracking and monitoring and get complete visibility over all logistics operations. Even carbon emissions can be tracked with our logistics software in Saudi Arabia.
Moreover, Shipsy enables businesses to automate and digitize operations reducing reliance on manual elements and improving overall operational inefficiencies. Along with these benefits, Shipsy also helps achieve the following:
Book a demo for deeper insights into how Shipsy works and how we can help you achieve the above results!
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