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Freight Management: Technologies Impact

As more and more consumers make their purchases over the Internet, there are fewer trips being made to the local shopping mall. However, the products still have to be shipped, which some could argue will increase freight traffic. What are the benefits and the drawbacks technology has had on freight management?

Freight Management Technology and the Perks

New technologies, such as radio frequency identification (RFID) sensors, have become the norm in freight management. Meeting the need of the customer requires adding technology that provides real-time updates on the whereabouts of inventory, which is what an RFID can provide you. Such mobile technology can help companies grasp freight management risks, demand patterns, and order rates. Being able to track and manage inventory is found to improve a company’s ability to manage capital and inventory requirements.

Freight Management Technology: Helping Meet Customer Needs

Customers are now requiring advanced notification of when their order has shipped and when they can expect it at their doorstep, but this information gathered by new technologies is also helpful to your sales and marketing staff. RFID can be applied to better manage supply chain operations, from inventory management to retail marketing. They produce a higher level of product availability, inventory visibility, and information transparency.

Freight Management Technology Reduces Costs

UPS, for example, has technology aligned with its business strategy. Technology has helped to alter the freight management landscape and UPS is an obvious benefactor of that technology because they deliver more than 14 million packages a day and use technology in all of their transactions. UPS gets more than 140 million hits every day on its website, a percentage of which includes customers tracking their parcels; technology like this increases customer service. GPS systems help customers monitor the location of their package and give them an idea of what day their package will arrive. This is a bonus for suppliers too because they can better plan their delivery routes and make substantial savings in fuel costs. A UPS executive said they saved $75,000 in fuel costs in their first year of using the new technology. There is also an added environmental advantage in that there are less emissions being dumped into the atmosphere.

Technology’s Negative Impact on Freight Management

E-commerce has had a huge impact on freight management, especially in urban areas where more trucks full of products are being shipped to the customer’s door. Consumers’ relationship with retailers has changed because of the impact of e-commerce due to taking the retailers out of the equation. This new system of e-commerce disaggregates retailing distribution. The shopper was once paying the cost of shipping the products from the retail outlet to their home but with consumers shopping on the Internet, the supply chain is included in the freight distribution process, and these distribution systems aren’t keeping up with the online orders. One could argue that the advent of this technology specific to freight management can be bad for the smaller companies that rely heavily on freight management because the systems can be quite expensive to implement. Company leaders who are not fond of technology or don’t feel they have the capital for the investment will have a harder time investing in these new technologies and will likely fall behind the curve.