Ask any executive in any industry and one of their primary goals is growth. The same goes for freight brokers and third-party logistics providers (3PLs). Even with all of the turbulence in the logistics industry, the logistics industry is still highly competitive and in order to meet your short and long-term growth goals and build sustainable growth you need a strategic approach. However, growth is often easier talked about than realized.
To help you navigate the growth journey, here are the three core areas that we have seen our clients focus on that help them consistently grow their business.
Technology and Automation
Technology and automation are becoming mainstream in the logistics space with many technologies like Navix enabling organizations to improve efficiency, lower DSO and maximize cash flow. Below are a few other opportunities to deploy technology to help spur growth.
Transportation Management Systems (TMS): Most 3PLs and freight brokers utilize a TMS to streamline operations, optimize route planning, and enhance load visibility. A TMS can enable you to make data-driven decisions, improve efficiency, and provide better service to your clients. However, a TMS on its own can only get you so far. It is why our customers see the value of integrating their TMS to have a more complete approach to their freight audit and invoicing process.
Data Analytics: Data is one of the most valuable assets for any organization, yet it is often the most underutilized. Your data can provide insights into your operations, track performance metrics, identify the best carriers to work with, and identify areas for operational improvement. While in the past, organizations had to wait to access data, having real-time access to your data enables agility which will lead to growth.
Diversification and Specialization
Diversifying your services and specializing in niche areas can be a winning strategy for 3PLs and freight brokers alike. This ensures that your business is not reliant on one specific area and helps protect your organization from uncertainties in the market as a whole. When it comes to diversification and specialization, here are some things to consider.
Niche Markets: Identify underserved or niche markets where your expertise can make a significant impact. For example, specialize in perishable goods, pharmaceuticals, or high-value cargo. Specialization can lead to higher margins and stronger client relationships.
Geographical Expansion: Consider expanding your presence to new geographical regions, tapping into emerging markets, or strategically targeting areas with high demand for logistics services.
Operational Efficiency and Cost Management:
Optimizing your operations and managing costs effectively, which leads to greater profitability, is fundamental to growth. Here are a few ways that organizations can improve their operations and lower their costs.
Carrier Relationships: Nurture strong relationships with carriers and negotiate favorable rates. A network of reliable carriers can help you offer competitive pricing to your clients. As referenced above, using your data to identify the best carrier relationships will also help identify those that need more attention.
Lean Operations: Continuously assess and improve your internal processes. Eliminate inefficiencies, reduce waste, and enhance resource allocation to improve operational efficiency. Having a solution like Navix that can reduce your time spent on invoicing by at least 50% is one of the values that our customers speak about most.
Every 3PL and freight broker that we speak to has a desire for growth. We are proud to be part of that growth equation with what we deliver. Growth is never a set-it-and-forget-it, but applying some of the tips mentioned in this article will get you on the path to sustainable and profitable growth.