Logistics business efficiency depends on the ability of companies to find and apply business growth opportunities. And that’s never been more critical. Survival in the era of globalization means identifying logistics business growth opportunities within the freight market. Both trucking and logistics companies need to know a few things about how to identify and leverage those opportunities for continuous growth and improvement.
Why finding growth opportunities is important
Logistics business growth remains a complicated process. Finding growth opportunities can be incredibly challenging for logistics business startups and up-and-coming organizations. The major disruptions of 2020, ranging from the pandemic through the relentless assault of hurricane season, have highlighted the need for continuous growth and expansion. Unfortunately, the overall rate of investment also retracted in 2020. According to McKinsey & Company, “Startup and venture capital funding for logistics fell from $3.5 billion in the first quarter of 2019 to $700 million in the first quarter of 2020 as the coronavirus spread worldwide. Logistics startups are thus focusing on securing liquidity and cash flows from operations, since growth funding has temporarily dried up.”
It is a rather precarious situation. Companies need access to additional resources, including venture capital, to enable growth. Simultaneously, there are instances where change occurs so suddenly that venture capital funding falls behind. 2020 has been one of these years. However, the overall logistics industry is on the path to recovery and attempting to maximize resources wherever possible.
Logistics business growth depends on data-driven decisions
Unlocking the secrets of logistics business growth depends on data. In modern freight management, freight data provides necessary insight into key market trends, opportunities for asset reallocation, guidance on annual and mini-bid RFP processes, and much more. Regardless of disruption, all logistics business growth trails back to data. But the data needs to be near-real-time data, and the data must be accurate.
Of course, another side of the data conversation exists. It is possible to enter a state of data overload. In this case, logistics experts and business owners simply have access to so much information that they do not know what to do. That is the grand fallacy of modern supply chain management. Too much data leads to lost opportunities for growth. However, applying data in the right ways, predicting market demand, predicting freight rates, assessing market fluctuations before they occur, and navigating volatility afford a protective effect and enable trucking and logistics companies to identify and leverage growth opportunities.
How to find and leverage opportunities for growth
Anyone can claim that the data-driven strategy for supply chain management maximizes growth opportunities. However, it is always best practice to follow these critical steps to reap the most significant rewards:
- Aggregate data from across the market. The modern supply chain is full of disparate data sources and data silos. Trucking and logistics companies must overcome these obstacles and aggregate data from across the market, including companies well beyond their scope of interactions.
- Use data to find carriers with available capacity and not listed on major load boards. Another hallmark of finding and leveraging growth opportunities involves using data to find carriers with available trucking capacity and those that are not listed on major load boards.
- Rethink your distribution strategy, moving assets to markets with the right balance of supply and demand. Trucking companies should further reallocate assets based on data, creating a better balance of supply and demand.
- Work with more carriers and drivers. It is not enough to simply work with a few more carriers. Instead, modern trucking and logistics companies need to work with more carriers and drivers, including tapping into the value of smaller, regional carriers, new lanes, and additional modes.
- Apply freight data to understand market trends. The company should further apply data to understand freight market trends.
- Pre-empt market fluctuations with predictive rate capabilities.
- Leverage freight forecasting platforms that apply SaaS-based models. The use of an advanced freight forecasting platform, such as FreightWaves SONAR, can apply SaaS-based models to reduce operating expenses and promote the value of transformative data.
Find new opportunities for growth with the right resources
Logistics business growth will always be subject to market volatility and disruption. Fortunately, companies can deploy the resources necessary to find and apply growth opportunities through data-driven freight management. Request a SONAR demo to learn more about how your team can find the best growth opportunities now.