Challenges of Inbound Freight Management

Although managing inbound shipping can be challenging, it also comes with a lot of benefits. Many people don’t consider shipping charges as an effective option, but if you are looking to save money, then inbound shipping is just the thing for you. Research shows that a company or business spends up to 40 percent of its annual freight budget on inbound shipping. This can be massively minimized if you have a more efficient freight management program.

Inbound management can be a difficult process, but it also has its upsides. You can lower your costs, improve your reliability and make your operations great if you decide to choose an inbound merchandise management program. The changes you make can be simple like communicating with the other parties or more difficult tasks like creating contracts and changing legal terms and policies with partners.

But be it easy or difficult, inbound freight management is a need and one must overcome all the challenges it has. We shall discuss all the basic challenges one faces with inbound freight management. There are mainly four trials that logistics face when it comes to management of freight and they are:

1. Rising costs

2. The absence of visibility

3. Lack of control by trading partners

4. Prioritizing inbound freight management

Rising Costs:

According to statistics, there is a 14% increase in truckload rates, a 15% rise in airfare, and 11% surge in ship rates. While it was once a cheap process, it has now become increasingly expensive. To make sure companies stay under budget logistics, managers try to find other options such as minimizing staff, cutting the budget, and centralized shipping. But making such changes can sometimes make the situation worse which is why it is advised that you come up with solutions that don’t harm you.

Absence Of Visibility:

There is no visibility as to how much a company spends on inbound freight management. They usually just make an estimate of the costs of shipping and tax when it comes to creating an order. There is no way of knowing exactly how much it will cost or when it will arrive or whether it will be safe or not. This lack of visibility of what is to happen can be challenging for companies as they have no way of knowing what is to become of the goods being shipped until they are delivered to the location. This lack of data means they must wait and contact the suppliers or customers for shipment details.

Lack Of Control By Trading Partners:

Inbound freight management is a two-way street. Your inbound shipment is your partnering company’s outbound shipment. Whether you are using your own freight delivery service or using a 3rd party freight, each partner always prefers to be the one in charge. Although they are bound by contracts and terms and policies, both partners often fight for the control of the shipment. And even though there are guidelines as to how a shipment is to proceed, they are seldom followed.

Companies who are shipping outbound have more control over how goods are delivered in contrast with inbound shipping as they don’t control which routes the suppliers will take and what guidelines they will follow.

Prioritizing Inbound Freight Management:

There are many other issues that companies are facing and that is why they often neglect the management of the raw material warehouse. They often believe that as they don’t have any control over the inbound shipment, they shouldn’t worry about it. However, it is crucial that you prioritize inbound freight management as it can affect your performance and image.

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