Top 7 Challenges Faced by Logistics Service Providers in Transportation Management


With the increase in trade activity on a global front, several companies are trying to make their presence felt in the transportation industry. After all transport and logistics aid different businesses to forge relationships and collaborate with each other. Many believe that large organizations opt for in-house supply chain management and logistics to meet their business requirements.

However, research reveals that most Fortune 500 companies prefer Third Party Logistics services for their needs. The companies prefer third-party logistics owing to their huge network that ensures a competitive advantage over most in-house supply chain systems. Outsourcing logistics also reduces time, effort and money while ensuring a seamless process.



The market is competitive and providers need to retain clients in an aggressive manner, especially in the field of transportation. Here are some of the biggest challenges faced by third party logistics service providers:

  • Time Utilization

Effective time utilization is critical to the success of logistics service providers. They need to support customers by reducing lead-time from order placement to receipt of the shipment. To achieve this, providers need to communicate and coordinate with agents, transport carriers, etc. on a prompt basis with efficient transportation management system. 

  • Adequate Infrastructure

Lead logistics providers rely on specialized industry expertise but have much lower negotiating power owing to fewer resources. In such a situation, the success depends on their ability to collaborate with independent transport carriers.

  • Documentation

It is a difficult task for logistics providers to enable shipment tracking. International trade transactions need thorough documentation of purchase orders, bills of lading, cargo insurance certificates, packing lists, delivery notes, invoices, export licenses, etc.

Logistics service providers need to ensure documents are transferred to shipper, consignee, transport carriers and the like and transportation management systems can ensure that.

Supply chain transactions can involve standardized documentation related to buyer and seller, trading or banking requirements, and even requested by customs authorities. Transportation management systems can support the business aligned with commercial laws. 

  • Reporting Systems

The upper-level managers in logistics leverage transportation activity and logistics management with efficient transport management systems but they do suffer from lack of visibility or insight in other areas. Depending on business size, it is evident that seamless and streamlined automated reporting systems can help in better decision-making too. One can even conduct detailed cost-benefit analysis for higher profitability and on-time deliveries. 

  • Order Management

Transportation management systems can fulfill order management through seamless integration of ERP and distribution facets of business. With this system, they can manage huge shipments or order data offering the ability to track order status and the like. 

  • Rate Sheet Management

Freight rates are based on load type, rates, surcharges, and other dependencies. Cargo is dispatched in varied loads depending on the transportation mode. Each mode of transportation also affects the rate of shipment. Transportation management systems help logistics providers to create accurate rate sheets and assign them to customers or vendors based on their proposed contracts. Shippers can also access the system and review the applicable rates before order placements. 

  • Fleet Tracking

Smartphone-based GPS-tracking systems provide trucking companies, with quick real-time information about shipments. They can track vehicles managed by different vendors through an effective transport management system and assign shipments to relevant trucks depending on their GPS location.

The ability to plan, optimize, implement, analyze, and react to all requirements determines the success of any logistics provider. Transportation Management Systems can aid these providers with the ability to streamline their business processes, gain a competitive edge, reduce transportation costs, and boost in customer satisfaction.

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