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Wholesale Distribution Disruption and a Technological Savior

Wholesale Distribution Disruption and a Technological Savior

Think about the effect Amazon has had on the marketplace, on multiple marketplaces. Just the retail environment on its own has suffered big hits as a result of the move to e-commerce. The consumer has spoken and there is a predominant way they want to get their products and services. It is online. And yet the complete disruption in the supply chain hasn’t kept itself to retail operators.

Companies are now getting into their own logistics game. Some are acting as their own intermediaries. How will vast sections of the transportation and logistics sector adapt to ensure their end users are satisfied and business remains strong?

Take wholesale distributors as one example. If there is one critical component of a wholesaler’s arsenal, it is the ability to control the customer interaction, from beginning to end. Transportation companies themselves focus on their end user and try to stand out in a crowded marketplace. For companies to keep up with each other in this hyper customer-focused environment, they must innovate.

Wholesale distributors that rely on large warehouse models are seeing the way business is done evolve. The way companies like Amazon do business has created unprecedented levels of innovation, choice, and greater value for the customer. Even more, they control their verticals. From warehousing to purchasing to logistics, it all rests in their hands.

For companies to stand out, they must figure out how to proactively delight their customers. They must earn the trust of their customers and their suppliers. If you don’t take a long-term view of your company, you may be caught short-sighted. So, what can trucking companies learn from operations like these?

The Secret Sauce

Whether you are a small or large trucking company, or even another operator in the transportation and logistics space, constant innovation is key. You must ensure you execute a plan according to the way it was originally laid out. Don’t be afraid to admit when a sacred cow needs to be put out to pasture. When you try to out-innovate your competition, there will be times when you fail. You must be aware of those moments and realize they are part of the process.

Another consideration should be how much you outsource. Are you investing a lot of money on outside partners and is there a way for you to bring those services in-house? Do you have your finger on the pulse of future technology trends and are you able to predict what your customers want? These are all appropriate questions and are simple guarantors to how companies like Amazon can disrupt so many industries.

Provided you are following industry trends and discovering new ways to cut costs and improve the customer experience, you will come out ahead of the game. Wholesale distributors can benefit from this mentality. Even when the bottom line isn’t as padded as you would like it to be, you can’t afford to not focus on these measures. If there are other disruptors in your category, you should be innovating your way out of obsoletion.

It really does not matter what you are selling or offering, customers are far savvier in the digital marketplace. They will compare your record to those of your competitors. They will price shop and they will insist on fast execution on deliverables. You could call this the Amazon effect. North American consumers expect a higher level of service. Whether you are a single owner-operator or a 3PL, can your company provide it?

A lot of wholesale distribution operators have e-commerce websites. Yet, some legacy operators might not have a website that is friendly on mobile. Small details like this make or break whether partners work with you or your competitors. Now that everything is one click away, your customers have expectations.

Customers now want to purchase smaller packages and receive those packages expeditiously. Although smaller shipments result in lower profits, without a strong customer base many wholesale distribution businesses cannot thrive. As vehicle configurations change, truck drivers and fleets will need to adapt to the new paradigm. If mileage per asset drops, how long will transportation companies be able to keep their foot on the accelerator?

Roadblocks and Opportunities

There are limitations to the model. One example lies in the age and interoperability issues with Enterprise Resource Planning (ERP) and Warehouse Management Systems (WMS). Distribution networks are dotted with hundreds of different ERP and WMS solutions. While some vendors innovate with new systems and technologies, old systems abound.

Products distributors need to consider how they will adapt their systems. If there needs to be a major system upgrade, it should be completed sooner rather than later. If you aren’t integrating your various technologies, you could be losing ground to your competition. As the industry evolves, companies will need to move quickly in adopting new technologies.

Disruption comes quickly, no matter what industry you operate in. From the trucks themselves to the logistics companies that work with motor carriers – change is everywhere. Still, there is plenty of room for expansion in such an environment. Although the trucking industry is going through a bit of a contraction, there are still ways in which companies can improve their delivery and planning.

The number one opportunity for wholesale delivery companies lies in routing and tracking technology. Are you aware of where your vehicles are and what your truck drivers are doing? If you aren’t, you should be concerned. Things like proactive mobile notifications to fleet headquarters allows you greater control over the shipment. The last thing you want is your customer calling and asking where their shipment is.

Another opportunity lies in the data. We have talked a lot about how important proper data analysis is. Even more, you must be ready to take quick action on the results of your data harvest. What are your customer trends and buying opportunities? Are you tracking your customers’ preferences and order history? Are you ensuring efficient delivery through technology?

Many firms are moving towards a predictive ordering model to inform their route planning efforts. Imagine being able to dynamically take order information and then create ghost routes through a computer program. You can essentially map a route before anyone heads out with a shipment. Fleet managers should be able to see where trucks are and how full they are for the day, in real-time.

Solutions exist that allow companies to dynamically add and remove vehicles from the fleet depending on customer need or volume. If they have identified a wave of deliveries, they can quickly adjust their resources to prevent unnecessary cost while keeping their customer’s happy. Through proper systems integration, fleets and wholesale distributors improve ERP performance. Companies stay ahead of the pack through mobile dispatching, telematics, and efficient data use. Mobile GPS tracking technology allows for simple trip management and instant proof of delivery. Notifications and alerts go to both email and mobile. A streamlined experience awaits, companies need only reach for it.

Fleets must invest in technologies that provide solutions for their customers’ problems. Without a top-notch customer experience, your competitors await. By leveraging technology, you can keep up with the Amazon’s of the world.

The IoT and Trucking

Another big area of opportunity and evolution lies in the Internet of Things. Key factors driving IoT growth in fleet management applications lie in motor carriers’ desire to optimize their business operations, gain access to real-time fleet insights, and keep track of mandates and regulations for compliance purposes.

Another big area where fleets are harnessing the power of the web is in route planning and management. In fact, the IoT fleet management market grew by nearly 40% in 2016. As the global freight market grows, companies are throwing more R&D money into tackling logistics problems. As this money flows into these systems, expect more innovation.

Top fleet management system companies can directly attribute their device usage to an increase in fleet vehicle sales, a greater adoption rate of advanced technologies and increased compliance with government regulations. The fact is, fleet management has never been easier thanks to technology. Being able to track specific employees and align their behavior with preset KPIs, fleets take control of their operations.

Whether you are a small fleet, large fleet, or wholesale distributor of another type, if you aren’t keeping up with the Amazons of the world and investing in innovation, you are going to inevitably lose market share. Keep a competitive edge, follow trends, and don’t be afraid to emulate what the big dogs are doing.

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