MARKET BASED / BROKER ENABLED LOGISTICS PLANNING FOR THE STEEL INDUSTRY
The ever evolving competent nature of the steel industry is putting pressure on the players to discover an edge over the competition. From the shortage of raw material to transporting goods, the challenges are never ending. In fact, transporting raw materials and finished goods to and from the factories efficiently is one of the major challenges that need immediate attention.
The Need for a Better Transportation Facility
Currently, the major chunk of the transportation is handled by the railways and roadways. Rising passenger and cargo rail traffic congestion has increased the turnaround time for cargo trains carrying iron ore to the steel factories.
Since trucks do not always get return consignments, the cost of transportation also fluctuates. Other logistical issues include indirect costs such as losses in transit, sudden maintenance issues and inventory carrying costs. Combined, these issues keep steel factories from offering competitive pricing.
Tips To Improve Logistics Planning
The good news is that there is a solution to these issues. Technological advancements have made it easy to track vehicle movement, regulate maintenance and help logistic managers estimate accurate delivery timelines. Some of the ways to improve logistics and supply chain efficiency in this industry are:
Calling the driver of a truck is no longer the only way to know how far a consignment has traveled. Sensors on trucks allow logistics managers to keep track of the truck’s location and inventory. GPS Trackers by Autoload update a consignment’s location every 10 seconds. Apart from the location they also provide information such as the speed at which it is travelling etc. Many sensors can also help generate the most efficient routes based on annual traffic density figures, fuel levels and the inventory load to minimize transportation costs.
Augmented reality can make loading and unloading containers more efficient. Currently, planning a container’s load is a manual process that involves scanning individual barcodes to check whether a load has been completed or not. Augmented reality devices that combine scanners with 3D depth sensors can make this process easier. Such a system would be able to automatically scan markers on individual parcels or use volume to determine the total number of packages. The system would then compare the result to the manifest values to check whether the load is completed or not.
When a truck breaks down while transporting steel, it causes losses in terms of time and money. Thus, timely maintenance of these trucks is important. Traditionally, maintenance was carried out as a reaction to something going wrong or according to a set time table. Today, many logistics companies are shifting this practice towards predictive maintenance. By using data analytics, companies can assess the condition of various parts and replace or repair them before the damage is done.
Digital Freight Capacity Exchanges
Steel companies rarely require round-trips for transporting raw materials or finished goods. This implies that trucks carry a load only one-way and often have to return empty if they cannot find a freight order for the return trip. Trucking companies have begun to use digital platforms and apps to automate freight procurement. By accessing the online database, freight haulers can match the available capacity of their vehicles with freight loads that need to be transported along the same route the trucker is taking. Thus, the trucks are no longer forced to return empty. This helps boost profit for the logistics companies and in turn, helps them offer lower costs to the steel companies they are partnered with.
Blockchain technology in the logistics industry can reduce the need for physical paperwork and make contracts, approvals and custom clearance quicker and more efficient. This helps reduce administrative and processing costs. Enabling trustworthy data sharing and updating can also bring about transparency in transportation and aid in preventing and clearing payment disputes. This, in turn, can ensure smooth logistics operations.
Incorporating the use of new technologies and automation is the only way forward for third party logistics working with the steel industry. With the new apps and software applications being developed for logistics operators, shipper and carrier collaboration will become more efficient and cost-effective for the carriers as well as the companies they work with.
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