Logistics Solution Design: How to Shape a Product That Connects Shippers with Carriers
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In 2020, Eleken team started working on UX design for TendrX, a freight tendering platform. This is how we dived into the world of logistics. Despite being such a conservative industry, the logistics industry gives lots of space for innovative software solutions. Thanks to technological advances, freight management has become much more efficient than it was decades before. Yet, the situation is not perfectly smooth.
During the pandemic years, the logistics industry has gone through big growth interlaced with big challenges. Increased volumes, lack of drivers, supply chain vulnerabilities… And the list goes on and on. In this article, we’ll cover some of the current problems of the logistics industry and how digital solutions can help with them.
Lack of trust between carriers and shippers
How much do relationships between the parties weigh in a tender-based business? In the times when everything is automated and managed through online platforms, we assume that these relationships have lost their importance. Now that shippers can create a tender and set a deal without making a single call, how can relationships be a problem? Well, while automation formalizes those personal contacts, it brings new challenges.
People try to “hack” tender platforms just like any other system. To get more profit, carriers bid for tenders with lowered prices and then try to raise them when they win (unfairly). Responding to that, some shippers pick more carriers than they need and ultimately cancel agreements with the “extra” ones.
Naturally, there is a mistrust building up between the two sides. Fights for tenders ruin relationships between shippers and carriers that otherwise could have grown into fruitful collaborations. Good relationships become crucial when shippers need to contract carriers on a regular basis for a stable supply chain or when there is an urgent need for a transit that leaves no time for tenders.
We’ll get back to this issue later, but now let’s take a look at the others.
Is there any conversation of 21st-century industry problems that can be complete without mentioning ecological issues? This one is not an exception. Transportation accounts for 21% of all CO2 emissions, and freight contributes to around one-third of this amount.
The freight industry is one of the most significant sources of contamination in the world, but at the same time, humanity hasn't yet found a way to live without it.
There are various ways of addressing this problem, but the solution that is most likely to become adopted by logistics companies is the one that does not require an extra expense.
One of the most logical ways of decreasing emissions for the logistics industry is optimizing routes and filling empty return loads. Optimization has a lot more to it than just finding a shorter route. For example, UPS once found that avoiding left turns saves time and fuel. Since then, UPS drivers almost never turn left, even though sometimes it means taking a longer way.
To find the best route for numerous trucks, you need a more complex solution than Google Maps. Freight management systems use smart algorithms to find the best option. Some of them put sustainability as a central objective. For example, Greenplan calculates how the efficiency of shipment changes not only depending on the route, but also depending on the departure time.
The prices for fuel create tension even within world politics, but the logistics industry is even more sensitive to it. Nowadays when standards for delivery are rising and people get more and more used to “free delivery the next day”, similar processes are going on in the world of big freight. Both shippers and carriers are under the pressure to lower the prices while making the delivery faster.
Whenever a shipper places a tender, they receive only one quote from each carrier. They remain blind regarding the price dynamics. This insight resulted in Uber Freight introducing a new feature, Lane Explorer. This tool allows shippers to see what are the market-based rates on their lanes not only on a given date but also two weeks in advance.
Such a simple idea was realized with an elegant UI solution: the calendar with rates reminds us of the rates calendar that we see on flight booking websites: you can see which day the prices go lower.
As we can see from this example, digital solutions try to fight the above-mentioned issues by any means. Logistics management is well suited for automatization, as little improvements in the workflow can make a big (and easily measurable) difference in the overall company performance.
Here are a few pieces of advice that we can give to those who aim to improve user experience in logistics products, such as freight management systems (FMS), tender platforms, and so on.
Make communication between distant agents smooth
Logistics have experienced all the difficulties of remote work long before the rest of the world in 2020. In the freight industry, managers have to organize the work of warehouses located in different states and coordinate numerous drivers that are constantly moving all around the country or a continent.
To improve communication between these parties, many freight management systems now connect their drivers with GPS to a big network and give the managers a real-time view of the shipments. From the design point of view, this means that software needs to be usable not only on a big screen, but also on mobile or tablet directly from the truck. For instance, Optimise logistics, as well as many other FMS, have mobile versions of the app apart from the desktop one.
Collect and analyze data
The visualization of each truck’s route gives us an illusion of control. But then, what can we do with all this information? How to understand the efficiency of all the elements of logistics business when they are spread all over the country or world?
Logistics is all about optimization, and to make thoughtful decisions shippers have to analyze loads of data. Freight platform Convoy provides their clients with huge amounts of data, structured and analyzed. The dashboard of Convoy shows a range of facilities metrics, such as volume, incidentals, and median dwell time.
All this data can be filtered to highlight the most problematic ones, or shown in an elegant scatter plot that shows how the volume of facilities relates to final incidentals. Diving deeper into the masses of information gathered by Convoy, the shipper can find the causes of the incidentals and take measures to prevent them.
Tailor to different kinds of freight
When trying to automate as many processes as possible, it is easy to forget that the cargo is not only measured in weight and volume. There are many requirements for transportation conditions that vary depending on the kind of freight. Some need a special temperature regimen, others — extra protected containers, and so on.
With a large amount of freight procurement software on the market, some companies make customized logistics solutions. For instance, Shipsta, a freight procurement software, focuses on pharma, chemistry, and automotive industries. For clients who need something more specific, they would adapt their services for an additional fee.
Learn from real clients
As you already know, procurement management is not a “competition-free” niche, so there is no sense in building another platform that would be a little different from the others. However, when you are aware of the problems that clients face, you can create something that helps solve them better than the competitors do.
Let’s take as an example FreightTender. This is a platform for management of the whole tendering process, from freight sourcing to validating tender data and processing transactions. This product had seemingly everything that shippers and carriers needed for their work. However, there were some moments in this process that needed improvements.
That is how the idea of TendrX was born: a platform that helps shippers and carriers get to know each other and establish initial contact. This product is addressing the problem that we have mentioned previously, the lack of trust between the two, and provides an advanced logistics solution to it.
This platform complements FreightTender: before placing a tender, shippers make information requests to carriers, see their experience, working conditions, and so on. Based on this information, they shortlist the ones that seem more reliable and can invite them to participate in future tenders.
All the trusted carriers can be grouped, so that in the future, you can easily reach the ones that you can contact for a specific type of freight, for example.
TendrX aims to build relationships between carriers and shippers. How do people build relationships in the 21st century? Correct, through social networks. We didn’t have the ambition to build a new Facebook in the world of logistics, but we used the newsfeed structure so that users feel engaged.
To learn more about logistics solutions, read TendrX case study.
Invest in good UX
This advice works for logistics as well as for any other sector. However automated the processes are, human work is a key element. And to make it efficient, we need, you guessed it, good user experience.
Before you start developing a logistics solution, think about people who will be using it and how the product can make their lives easier. Want to talk about your logistics project? Contact us and let’s see what we can make together!