Here's How to Win the World Series of Logistics
A great deal has been made of the value of relationships in business and how they can’t be automated. At CoLoadX we focus on international logistics and transportation, where such thinking runs especially deep. However, we’ve always believed that automation adds value to existing relationships, and that actually makes them stronger.
“Technology replaces humans, and that makes human relationships stronger?” is what a lot of skeptics think, and to that we say, “Absolutely!”
Sometimes it helps to step back or look at a parallel industry to see what sort of changes can work in your own.
Let’s take a look at baseball
Baseball is a business that is undeniably human. Players are human. The scouts who evaluate those players are human. The decisions that going into managing a game are made by a human. Basically, the “business” of baseball has always been human. And, baseball as we know it, will continue to be human.
So, it would be completely understandable if we decided to leave baseball alone and let it be a human pursuit from top to bottom. After all, why fix what isn’t broken?
If you’ve seen the 2011 hit movie “Moneyball”, you’ll realize the answer is surprisingly simple. “Moneyball” and the underlying philosophy known as Sabermetrics is a data-driven approach to managing the very human game of baseball.
The results have been transformative. Players who were otherwise considered mediocre have had their strengths exploited to meet the specific needs of a game situation. Walks became as valuable as hits. Closing pitchers could be used in the middle of a game and a variety of new approaches to the game have been realized. While the techniques behind “Moneyball” have been in use since the early 2000’s, the 2016 World Series between the Chicago Cubs and the Cleveland Indians was the moment it all paid off. Rather than rehashing the game, just consider this one outcome: it took a complete reimagining of baseball for the Chicago Cubs to win their first World Series in 108 years! The catalyst was data.
The logistics (r)evolution
“So, what does all of this have to do with logistics?” you might ask.
A lot, actually. Freight forwarders have been earning their keep as value-added service providers and strategic partners to the world’s biggest businesses for centuries. It makes sense given the complexities that come with international shipping transactions.
But change has arrived, and as is often the case, change is coming from outside, not within. E-commerce is the order of the day. An internet-enabled method of connecting buyers and sellers anywhere in the world demands more of freight forwarders than ever before. The ability to buy goods on a mobile device in 30 seconds or less creates delivery demands that traditional freight businesses aren’t equipped to respond to.
And yet, we’re still shopping for rates by email. We’re defining “service” by the number of people we can throw at a client and their shipping needs.
Like in baseball, the key to survival and success lies in evaluating your logistics expertise and seeing if it truly, honestly, is an advantage that can’t be strengthened by technology.
Freight forwarders excel at delivering very high value added, specialized services. Unfortunately, they spend way too much time managing paper. And this is true for virtually all industries and job functions: run an insurance brokerage? In charge of corporate procurement? Dealing with mortgage banking? Paper management is stealing from your money-making skills.
Like “Moneyball”, it’s time to test new approaches to the logistics business:
- It’s time to test the “relationship business” model and see if it holds up to a challenge from speedier quotes and booking enabled by technology.
- It’s time to give up orthodoxies like applying resources to managing shipping contracts in favor of getting the best rate and service combination available, even if that means working with a competitor!
- Above all, it’s time to go after more business. Segment your customer base, apply relationships to the truly high value customers and services that generate real profits, but also grow your higher volume, lower margin business by adopting technology that reduces your cost per transaction. Grow into verticals you’ve always wanted to pursue but could never get the pricing to work.
By doing these things, we’re confident it won’t take your business 108 years to reap the rewards.
Did You Know…?
The CoLoadX Success Team has over half a century of combined experience in the import/export and logistics management industries. Our expertise and commitment to the logistics industry is time-tested.
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By: CoLoadX on May 23, 2017, 9:11 p.m.