Successful logistics are fundamental to the national and international economy. Functioning supply chains have become more important, but also significantly more complex. While producers and service providers used to source necessary materials from the immediate vicinity, they now require materials that often have to travel long distances. Added to this are rising customer demands for same-day delivery, the prevailing driver shortage and the ongoing transition to digitalization. Current and future trends will transform the logistics industry.

In addition to current problems in logistics, the pandemic and the energy crisis have also had a major impact on the industry. While logistics companies can hardly influence these challenges, they can prepare for them and ensure they maintain or even increase their efficiency, for example, through appropriate technologies. We provide you with an overview of the challenges that also hold opportunities for you.

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Table of contents:

1. Internal challenges in the logistics industry

2. Current problems in logistics: External challenges

3. Seizing opportunities with the right strategy

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Internal challenges in the logistics industry

The logistics industry has always had to deal with inherent challenges. As logistics, and warehouse management in particular, move toward digital markets, these challenges will continue to grow. We have compiled the most common logistics problems along with potential solutions for you:

• Limited storage space: Storage space can become scarce, especially as a logistics operation grows. Additional storage space is often costly. It is advisable to use existing storage space as efficiently as possible. Companies can, above all, utilize the height of the warehouse with high-bay racking. Introducing compact storage systems or mobile shelving also helps.

• Suboptimal organization of goods: If goods are poorly organized, products take longer to find, and delivery deadlines may not be met. Storage should be well-planned from the start – a warehouse management system enables successful inventory control.

• Obsolete stock: If obsolete stock is sitting in the warehouse without being properly recorded or accounted for in planning, it can lead to storage errors. This is another area where a warehouse management systemhelps to keep track of inventory.  

• Picking errors: Errors during picking occur, for example, when multiple orders containing different types of items are processed together. This results in costly returns. Companies can prevent these picking errors through automation.

• Improper goods handling: Improper handling of goods hurts productivity and makes products susceptible to damage. Logistics companies should train employees in goods handling and provide appropriate handling equipment. Furthermore, load carriers (pallets, containers) must be sturdy enough for the goods being transported.

• Inefficient shipping: If shipping is not carefully planned, delays can occur. For a smooth process, goods should be consolidated as efficiently as possible, transport documents should be verified, and loading should be carried out quickly and securely. Warehouse management systems are also helpful here.

• Incorrect KPI analysis: Using KPIs (Key Performance Indicators) allows for the clear evaluation and improvement of the performance of all logistical processes. However, the data regarding storage, goods receipt, inventory management, etc., must be correctly read and interpreted for this purpose—ideally using suitable analysis modules.

• Lack of coordination with other departments: Poor communication between the warehouse and, for example, the sales department can lead to incorrect orders. Logistics software helps with coordination and communication between individual departments—ideally in real time. The more transparency, the better.

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Current problems in logistics: External challenges

External challenges such as the COVID-19 pandemic or rising energy and fuel prices have hit the logistics industry hard. The pandemic in particular showed how important a flexible approach is in logistics. Today's logistics systems must allow for quick pivots and new courses of action. For a company's logistics to adapt quickly, it must be aware of the risks and challenges:

• Rising transport costs: Even before the COVID-19 pandemic, logistics companies were struggling with rising transport costs. This particularly affects higher vehicle costs, but also increasing personnel costs. To achieve savings, you can use route planning systems that optimize transport routes using data and reduce costs.

• Driver shortages: According to current data, about 60% of all logistics companies report open vacancies. This restricts the transport of goods, while demand for products—and consequently prices—increases. The driver shortage therefore has a negative impact not only on companies, but on the entire economy. Here, too, route planning systems can be the solution. They allow you to deploy your existing drivers as efficiently as possible. In addition, better organization and route distribution lead to less stress and fewer overtime hours for employees.

• Higher energy and fuel prices: Increased expenditure on fuel and energy also affects product prices. This can frustrate customers and potentially lead to customer churn. Using a route planning system can ensure optimal fuel usage by determining the best routes and cost-effective order distribution. This also reduces your CO₂emissions.

• Sustainability in logistics: It is becoming increasingly important to private and business customers that they order from companies that prioritize sustainability and climate-friendly practices. Legal requirements are being adjusted accordingly. Consequently, climate-friendly logistics companies are more likely to win more contracts in the future. Environmentally conscious route planning with route planning systems can support you in this. You should also take vehicles and their fuel consumption into account.

• Government regulations: Rest periods, working time regulations, and clear emission guidelines are among the challenges that must be taken into account when planning routes. In exceptional situations such as a pandemic, restrictions are to be expected, to which logistics companies must react quickly. You can incorporate these regulations using suitable route planning systems.

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Seizing opportunities with the right strategy

From internal challenges like limited warehouse space or inefficient shipping to external influences such as rising transport costs or driver shortages: the logistics industry has plenty to deal with now and in the coming years. With digital solutions, you can ensure your logistics operations run as efficiently and error-free as possible. Real-time communication and transparent information management play a key role in this. The cloud-based solution TradeLink helps you react quickly to adverse circumstances and reduces your costs in the long term.

With TradeLink, you always have an overview of all ongoing processes and can plan truck deployments for rapid processing. All deliveries can be coordinated and tracked in real time using the software. TradeLink consolidates all data centrally and clearly. Time-consuming emails, phone calls, and Excel spreadsheets, as well as expensive and error-prone paper processes, are a thing of the past. This ensures you are well-prepared for all logistics challenges and any potential changes in the industry.