With these multiple situations coming up, is important to know which areas should your logistics company focus on this new year.
We are starting a new year, which means new challenges, goals, and new trends in the market. It’s no secret that the logistics industry is facing situations such as a down market, inflation, elevated fuel prices, labor shortages, etc. So, we must be prepared for the new things that will come in 2023. According to The Times of India, “2023 is expected to be an innovative year for supply chain management, owing to several factors including technology, changing markets, and global disruptions. As businesses seek to implement increased efficiency and sustainability, various technologies and methods are developing to transform supply chains.”
We spoke with experts in our company, and this is what they had to say:
Ricardo Gonzalez, CEO at Hubtek, thinks that what supply chain companies and logistics service providers need to be doing in 2023 is, basically, cost reduction. “They need to be very conscious in terms of costs, in operations costs, so they can at least maintain levels of 2021/2022, or perhaps be able to grow”. He also believes they need to be focused on freight generation. “They need to be quoting much more just to be able to get more freight, based on a close rate of around 15% to 20%. Knowing that rates are depressed, revenue is going to be lower. So, they need to be chasing much more freight, chasing more relationships, chasing more shippers, but also quoting whatever they can, based on their lane tolerance, just so they can maintain their levels. I think cost reduction and more freight, more revenue, is basically the formula they need to be pursuing in 2023.
Mike Riccio, Strategy and Business Coach at Hubtek, states, “As you get ready here in January to attack 2023, one of the first things you should do is have a strategy. You should have a plan. You should have an outline of what you want to achieve. You want to take those goals and write them down and talk about, in your mind, how you’re going to achieve those, because as we all know, having your goal without a plan is just a wish. What this does is, it allows you to take control of what you can control, and then just let the rest go”. While he thinks that it’s important to understand what’s going on in the market, what’s going on in the economy and the industry, he doesn’t think you should let it dominate your business and how you want to run your business. He believes that the strategy helps to keep you focused on where you want to go so that when distractions happen, it can bring you back to that document and keep you back in line with what you want to accomplish.
The next thing he thinks you should consider for 2023 is investing in your people. “Train your people. Now, when things seem slow or when there’s uncertainty, a lot of people tend to hunker down and go into their shells. And while I don’t think you should just go out willy-nilly and spend all sorts of money, I do think it’s a great time to invest in your people and processes and how you want them to move forward, and help them with their career path, which will ultimately help with your business.”
He summarizes by saying that you should have a strategy, write it down (so that it brings you back to where you want to go when distractions occur), follow that strategy, and invest in your people. Those are some of the things he thinks you should be thinking about for 2023.
Finally, we heard from Joel McGinley, Hubtek’s Managing Director. He says there are three main areas that logistics companies should focus on in 2023. The first is technology. “Technology is developing quite rapidly. There are a lot of great technologies out there to make a company more efficient, to give them the edge, especially in terms of speed, and I think the primary technology that you really want to focus on first is quoting technology. Have a technology like our TABi Connect product, that allows you to speed up the quoting process to win more business”.
He states, “2023 is going to be a year where you have to outdo the competition. You can’t rely on natural growth, because the growth isn’t going to be there like it has in the last couple of years. You have now got to outcompete the competition. You’ve got to beat the competition. Speed is a way to do that.” The second thing that he believes a logistics company should focus on in 2023 is their people – developing their people, getting their people trained, and keeping their people. “Finding good people and keeping them is difficult, and if you aren’t able to develop them and train them, they often will leave. So, that would be the second thing, is really focus on the people”.
And finally, number three is business development. “As I mentioned earlier, this is a year where you must outcompete the competition, and so it is a market share protection and grab that you must focus on, which means you’re taking market share away from the competition. So, technology, people, and business development are the three things I’d recommend a logistics company focus on”.
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