POLITICO has launched its weekly logistics newsletter, where you can learn about the biggest hurdles facing the logistics sector.
Here are some of the biggest issues plaguing the logistics business.
Expensive and complicated software: Logistics software is the primary bottleneck for many of the largest companies in the industry, according to a recent report from the firm Deloitte.
It is the only software required to perform the vast majority of the tasks.
Deloittes report noted that of the 527 large U.S. logistics companies that Deloite surveyed in 2018, only 37 percent have the ability to run their systems without a large amount of specialized software.
High fees: Deloites report states that “the most expensive logistics services are those for which it is most cost-effective to provide a contract with a large volume of orders.”
For these services, Deloits estimates that the average fee per order is $1,500, a figure that is more than three times the average for other industries.
The average cost per delivery of the top 100 items delivered to retailers is $3,800, a price that is $4,400 higher than for other types of companies.
Over-reliance on technology: The most expensive services, according Deloit, are those that require significant technical expertise and software development to ensure a smooth, seamless delivery process.
For example, delivery of food in the U.K. can take between four and six weeks, while delivery in the United States can take only two weeks.
Delos estimate that this means that in many cases the cost of these services is greater than the cost that can be saved by not having to use costly technology, and thus, over-reliances are being built into the industry.
Unnecessarily high cost of living: According to Deloiser, many of these companies are over-expanding their operations and thus are taking on extra costs to run operations and keep up with increasing demand.
The cost of operating these operations, which have been known to be among the highest in the country, is often driven by these high costs, which are in addition to the cost associated with managing the logistics infrastructure.
The companies that are overpaying for these operations include Caterpillar, which paid $1.1 billion to acquire FedEx in 2015, and Cargill, which recently paid $2.3 billion for its acquisition of West Virginia-based FedEx Express.
High costs for customer care: Delos says that while some of these logistics companies are using automation to better manage their operations, others have not, and this has led to many customers complaining that they don’t receive the support they need.
For some companies, the reason for the low response rates for customer service is because they are unable to meet the needs of their customers.
For others, the issue is more complicated because customer support is a function that is not centralized or automated, but rather relies on a small number of employees.
This can create challenges in the delivery of goods to customers and has been shown to result in more expensive service for customers.
High turnover: Deloreas reports that many logistics companies, particularly in the fast-growing and rapidly evolving transportation sector, are finding it increasingly difficult to keep up.
This has resulted in companies seeking to outsource some of their operations to smaller, local businesses.
Low returns on investment: Delores report indicates that logistics companies may be over-paying for services and are in danger of missing out on business by paying out too much on products and services that have little value.
The problem is compounded by the fact that these products and service tend to be more expensive than the products and product that they replaced, making it difficult to turn a profit.
The result is that companies are paying higher prices for the products that they are replacing, which is not the same thing as higher profits.
Cost of operating the logistics platform: This is the area where Deloitaes report finds that most logistics companies rely heavily on the use of proprietary technology.
According to the Deloisa report, the cost to operate a logistics platform is a major factor that makes up the majority of its business, accounting for 75 percent of the business cost.
High labor costs: Many of these firms have a long track record of using subcontracting for labor, which may not be in the best interests of the company.
For many of those companies, this practice is seen as a form of collusion with other companies in an effort to avoid paying for the labor they use.
High operating costs: Delocess estimates that in the transportation sector alone, “operating costs are $12.3 trillion per year.”
According to this number, it is estimated that these costs are a substantial portion of the total operating cost of a logistics company.
Lack of transparency: Delooits report indicates the lack of transparency and accountability around the costs of logistics is