The Role of Technology in Cost-Efficiently Scaling Logistics for Growing Businesses

June 19, 2023 | By

AI and automation-powered logistics management strategies can help shippers seamlessly

One of the keys to achieving these efficiencies is to embrace modern technologies that help leverage the right logistics service provider among many, at the right time and for the right job, explains Soham Chokshi, CEO & Co-Founder, Shipsy.


The MENA’s eCommerce market soared to a staggering $37 billion in 2022. This underpins the lucrative growth opportunities for retailers and logistics service providers. But to meet skyrocketing delivery demands, businesses in the region must focus on cost-efficiently scaling deliveries, boosting delivery serviceability, ensuring delightful and unified customer experiences, and increasing delivery reliability.

Here’s how AI and automation-powered logistics management strategies can help shippers seamlessly scale transportation operations.

Quickly and Cost-Efficiently Scaling Deliveries:

Poor serviceability and the absence of a 3PL partner, delays/challenges on-time order fulfillment. Intelligent allocation systems consider various delivery constraints such as payment type, SKU type, region, serviceability, invoice value, etc., to automatically onboard the right logistics partner to meet elastic demand.

Businesses can further customize allocation if multiple 3PLs qualify for the criteria above based on cost, speed, best SLA adherence, and ratings. The system works the same logically but with different rules while assigning tasks to logistics service providers to quickly execute delivery operations.

Enhancing Delivery Serviceability:

Every 3PL provider has its strengths (KPIs that they specialize in), such as same-day deliveries, next-day deliveries, hyperlocal deliveries, less than 45-minute deliveries, slotted deliveries, and more. Having multiple partners allows businesses to avail themselves of the best-of-the-breed logistics services across first, middle, and last-mile delivery.

They can also avail themselves of expert and reliable services for critical logistics, such as cold storage movement, hazardous or chemical goods movements, and even in complex terrains with stringent transportation norms.

With a paradigm shift towards sustainability and green logistics, businesses are keen to explore alternative fuels, autonomous deliveries, and other ways to reduce their carbon footprint. Using modern multi-courier management tools, shippers can easily select 3PLs based on their expertise in a specific geography, region, and even pin code.

Driving Seamless Delivery Orchestration:

Instances of over and underutilized delivery resources or riders negatively impact the bottom line and even the driver’s experience. It also results in inefficient delivery orchestration between the own fleet and 3PLs.

Capacity-based allocation enables businesses to plan trips well in advance. It gives retailers visibility into their fleet’s future capacity based on customer service level agreements (SLAs). This helps improve logistical planning.

Smart allocation rules factor in multiple parameters such as driver contract type, current workload, cost, proximity to the customer, and so on to effectively allocate deliveries between own fleet and 3PLs and optimize capacity utilization.

To enhance the management of logistics service provider KPIs, such tools also monitor the number of deliveries completed, first-attempt success and failure rates, on-time delivery percentage, delayed deliveries, etc.

Building Proactive Logistics Strategies:

Advanced technologies such as AI and analytics empower businesses to make their supply chain and logistics operations more resilient. They can accurately predict and proactively address potential delivery failures. For instance, besides automatically gauging and alerting the delivery manager if delivery will be delayed, the system will also suggest remedial actions, such as assigning the delivery to another driver.

Another use case could be notifying hub/delivery managers if a carrier is performing below the threshold or raising a request for additional freelance drivers to meet sudden demand surges. Similar use cases can be mirrored when moving goods across borders to drastically reduce transportation risks.

Such predictive and prescriptive capabilities can be instrumental in real-time incident management, demand management, courier performance monitoring, and incentive management.

Small and medium enterprises (SMEs) are the backbone of the UAE’s economy, accounting for around 95% of all companies in the country. Retail businesses comprise a decent chunk of this segment, contributing over 9% to the UAE’s GDP. The right technology is critical in scaling logistics for such growing businesses and provides a stronghold for success.


Read More Source:

  • World Logistic Passport

  • Logistics Partner

  • Supply Chains


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