As Europe deals with the challenges caused by the global recession, many freight forwarders and logistics providers are increasingly focusing on robust IT strategies to create improved operational efficiencies and reduce costs, says Simon Clark, business development manager-Europe Middle East and Africa for CargoWise.
"Until early 2008, the European marketplace was enjoying economic boom after boom; then it was quickly hit with a plethora of operational and organizational challenges as the freight market reacted to the global economic meltdown,” said Clark. The provider of integrated supply chain logistics management systems added, “While some manufacturing areas in Europe are still buoyant, many regional markets built on service industries, as well as markets that are focused largely on imports, have faced a sharp decline in business. Suddenly, the emphasis on environmental concerns and green initiatives has been overtaken by a focus on organizational restructuring and cost reduction as businesses strive to survive during this uncertain time."
Changes to European customs processing will add challenges to companies, stretching resources to the limit during a period of economic concern, adds Clark. To meet the challenges, many freight forwarders and logistics operators have turned to ERP-like information technology (IT) solutions to automate and streamline their business models and work leaner and smarter. The consensus today in Europe,is that the logistics industry must increasingly place more emphasis on utilizing supply chain visibility tools to create cost efficiencies, provide solid customer service and create forward-thinking operating platforms to meet the changing dynamics of this global business environment, Clark continues.
"Whilst we cannot ignore our many ecological concerns, the European market today has to balance a greener environment with operational efficiency,” says Clark. “The natural 'siege mentality' of battening down the hatches in an economic downturn is all too easy to adopt. But simply ceasing capital investments in technologies that can facilitate both concerns will not work in this logistics atmosphere. Today's global commerce climate demands increasingly proactive business modeling to ensure that both environmental and operational efficiencies are maximized and that customer service is heightened. After all, it's much easier to retain a happy customer than to lose an unhappy one and replace it with a new one."
Clark says the risk of dealing with the difficult clients or extending inappropriate credit terms is also a growing concern to European freight forwarders and suggests that many are more carefully profiling the markets they serve and targeting clients for profitable business on the right credit terms. This more aggressive marketing approach is helping to ensure that financial risk is mitigated throughout the European forwarding industry. He cites new technology options such as Software as a Service (SaaS) or similar on demand software modules as another area where forwarders can maximize overall operations.
Ultimately, Clark suggests that with more enhanced monitoring of day-to-day business operations, European freight forwarders can operate in a leaner and more efficient manner through increased use of enhanced software solutions. "Many freight forwarding companies on the European continent can find great efficiencies with IT solutions and by working with suitable service providers that not only will help them through economic downturns, but improve their overall operations, customer service and ROI in the long term," summarizes Clark.