How SMB Logistics and Forwarding Companies Save Thousands in IT Costs

November 20, 2015



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Small and midsized logistics and forwarding companies have different IT requirements, and often face different IT challenges, than those of their large enterprise counterparts. This is often driven by the competitive businesses they operate, the diverse lines of services they offer and growing customer demands. In turn, this puts a constraint on IT resources, such as staff, skill levels and budget. For this reason, small and midsized logistic and forwarding companies must capitalize on opportunities that can reduce IT costs and maximize profitability.


What if I were to tell you there is a way you can improve customer service and save huge $$$ in IT costs? At first, you may be skeptical, and rightfully so. For that reason, I have put together this blog to prove to you that this is, in fact, something your company can accomplish today!


Logistics and forwarding companies are under constant pressure. As e-commerce continues to experience exponential growth, the demand for timely, accurate, and less-costly deliveries will increase. Better customer service at a lower cost.


Take Alibaba for example. Its goal is to deliver products anywhere in the world, within three days, at no cost to its customers. In order to achieve this, logistics and forwarding companies must move data, fast and accurately, throughout the supply chain. In other words, the right data needs to be in the right place, at the right time.


Now I know what you're thinking, "Alibaba uses Cainiao for its logistics, and they are not a SMB." Although this may be true, the same concept applies to SMBs. What we are seeing now, with traditional IT operations based around manual processes, are logistics and forwarding companies losing track of vital information, data movement and processes do not happen in real time and there is no scale, speed or flexibility in there platforms. Subsequently, customers are receiving parcels late, or worst, not receiving them at all. Such errors can result in costly consequences to all parties involved.

 SMB Logistics within the Cloud

Below is a snapshot of how cloud technology has unbundled many of the services traditionally provided by Fedex. It is these applications, run in the cloud, that are offering the advantage to the SMB. The ability to offer new services, provide flexibility and scale and exceed your customers expectations.


SMB Logistics


Given that you may already have many of these systems and processes, the real opportunity lies in the ability to integrate all the data across your value networks. This is no longer the era of just EDI. Today’s logistic processes require more data, more detail, rich media, continuous message flows and end-to-end visibility for all parties including the consumer. If you are to reduce costs, improve customer service and grow revenues, you must be more agile and capable. The solution.......adding a cloud-based data integration platform to compliment your existing integration solutions. This will allow you to quickly adapt and work with complex processes and tier 2/3 providers that have limited electronic capability and to expand into new markets.




By utilizing the cloud, you can cut your IT costs by up to 50%.


How's this possible?


1. Removing the cost of hardware, software and maintenance.


2. Leveraging the latest technology every day and the skills of personnel that understand the technology and industry. This enables you to achieve automation.


What else makes the cloud so great? 


Cloud-based data integration is interoperable. Data can be sent and received throughout the supply chain, regardless of the protocol or format.


Cloud-based data integration is highly scalable. As I already mentioned, e-commerce is experiencing exponential growth. Both merchants and customers will be demanding faster and cheaper deliveries. Cloud-based data integration is highly scalable. In other words, as parcel volumes and demands increase, so does your capabilities. The ability to spin up and tear down in a matter of minutes is incredibly powerful and useful.


Pay-as-you-go price model. With cloud-based data integration, you are only paying for what you use. The more transactions you do, the less you pay.


As an SMB, if you want to survive and grow in the industry, transitioning to the cloud will be key to your strategy. From the organizational and operational point of view, the decision to utilize the cloud is one of the most pivotal steps that a small or midsized logistic or forwarding can take right now.

Happy customers are important.


To learn more about how cloud technology is changing the logistics industry, download the free eBook provided below. 


 eBook: Logistics Industry  Download Now



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