This week, I led a webinar for a client about the importance of supply chain visibility.  Supply chain visibility is key for a logistics company for customer retention, revenue generation and proactive communication.  Let’s briefly touch on each one and why it is so crucial.

Customer retention

Freight rates are constantly in flux regardless of the modality.  Congestion, labor unrest (which we are *not* covering this week, but are leaving it to the professionals elsewhere), infrastructure or service failures all are outside of the control of the average non-asset owning logistics company.

So what can they do?

Logistics companies, with a good supply chain visibility platform, are able to communicate the current state of affairs and even monitor for exceptions that fall out of scope or get delayed and proactively communicate those interruptions or deviations early enough to give the client a chance to pivot and make another choice.

Revenue generation

Logistics companies have long been perceived as transactional; ship a piece of cargo, clear a shipment, deliver a container.  Traditional mindset would dictate that an invoice is issued to the client for all the things associated with that one transaction.

But what if the logistics company were performing ongoing monitoring functions, managing and tracking things like purchase orders from birth to death; or providing digital document retention and retrieval long after delivery?

Companies are now out of the transactional billing cycle and into a maintenance and retainer cycle which can supplant or provide additional margin when rates are pressed downwards and already razor-thin margins are reduced to microns.

Proactive communication

A logistics company pushing supply chain visibility to their clients is infinitely more valuable than one that does not.  The most common question posed by a cargo owner is some variant of, “Where is it,” and many automated systems today offer supply chain visibility to buyers and sellers of cargo.

Telling Boeing about this before they found out on the news had to be somebody's job.  Proactivity.  (Image credit: Reuters)

Telling Boeing about this before they found out on the news had to be somebody’s job. Proactivity. (Image credit: Reuters)

The information in that system can be shared between trading parties by EDI or supplemented by human intervention or tracking where an automated system is unable to go.

Supply chain visibility is crucial to the long term success of a logistics company

Companies who are relying on word of mouth, Excel-managed spreadsheets and laborious, manual tracking methods are in danger.  Systems are affordable, customizable and robust and powerful to meet the scalable needs of many sized shippers.  Customs brokers, freight forwarders, truckers and warehouse operators should invest in a system that affords their clients the required visibility in their supply chain while saving them time and money in human capital investments and labor costs.

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