Effective freight management is the key for end-to end transportation
Interview by Krishan Mishra, Associate Director, Customer Success, Freight Tiger, who specialises in Cement logistics. Krishan spoke to Indian Cement Review, a well-known publication in the industry about the latest trends we’re seeing, the challenges and how technology plays a critical role in reducing OET (order execution time) and improving profitability, efficiency and customer experience.
Can you explain the role of transportation/logistics in the cement industry? What are the latest trends you see in this segment?
Cement is a low-value and high-volume commodity. The cost of logistics in the cement industry constitutes almost 18-24% of the total cost, making it the highest amongst most industries. There is added complexity arising from following:
a. The end consumer doesn’t store cement, hence the cement supply chain needs to be fast.
b. Transporters are less willing to carry cement as the transporters make lesser money on cement freight compared to some other high value freight. Further, these trucks become dedicated to just carrying cement and not carrying other materials.
Hence, effective freight management is critical in terms of profitability, efficiency, and delivery of the materials to the last mile. Optimisation of direct dispatch and STOs (stock transport order) is a key-value differentiator in saving freight costs.
Some trends we see are-
- Direct Dispatch & Depot Optimisation
- High focus on virtual depots for an ecommerce-like delivery experience and better control on the distribution
- Customer Centricity is gaining importance
Customer engagement by providing visibility to dealers, sales agents, plan operations and transporters for maximising deliveries during the sales window
Measuring delivery compliances
- Advancing operational efficiencies with the help of technology
Predictability on diversions
Vehicle fulfilment through spot/bidding and contractual procurement
Better fleet utilisation through return loads
- Innovative measures to reduce costs and enable faster payments
- Central Control Tower to tap freight saving opportunities
- Focus on ePOD and faster payments to transporters
What challenges do cement companies face in the transportation/logistic segment? How does your company help them in overcoming those challenges?
Freight Tiger has benchmarked challenges into two broad categories – The first category is of companies that are fairly advanced in their technology adoption and have digitised their key operations. Their key challenges are achieving faster order fulfilment, getting more predictable and accurate ETAs, better visibility around return load, and achieving shorter payment cycles.
How Freight Tiger helps: Our planning module helps club orders to maximise vehicle, capacity, and route optimisation. We have seen immediate savings of as much as 3-5% of freight cost.
Through our vehicle procurement moduleFT Fulfil, shippers achieve higher fulfilment and better benchmark rates from their contractual transport companies and tap into our network of 4000+ transport companies through our spot bidding module. Our track & trace module FT Trace gives customers 100% visibility to market and owned trucks and gives them the most accurate ETAs to help reduce TAT at loading and unloading and in-transit. This also helps customers to fulfil return loads. FT Control, our Control Tower product has 20+ customised alerts that customers can configure to their business needs. Our cement customers find this especially useful in getting notified on detentions and diversions. The payment modules of ePOD and APR increase trust between the parties through a real time proof-of-deliveries, complete audit trail, bill compliances, and payment statuses thus cutting down payment cycles by half
The second category is companies that have started their journey of digital transformation. For such companies, the key challenges are having 100% visibility of the in-transit fleet, tapping leakages around stoppages, detentions, and diversions. Last but not least, we see a massive opportunity in driving adoption across all levels of an organisation and among external stakeholders/partners in the process.
For this category of customers, our powerful SaaS platform with an on-ground team called ‘Managed Services’ can help customers in their end-to-end tech adoption and change management journeys.
Please tell us about the product portfolio (FT Trace, FT Fulfill) that are most suitable for meeting cement logistic needs.
Freight Tiger has a deep understanding of the cement industry. Today, 16-20% of the total cement freight volume goes through the Freight Tiger platform and we are on track to hit 45% +. Our products have advanced to become a custom-suite for the cement industry. Four key areas that will help every cement customer are planning, vehicle procurement, visibility, and payments.
Logistics planning: Our planning module helps club orders to maximise vehicle, capacity, and route optimisation. It helps customers plan multipoint pickup and drop deliveries in a cost-effective manner and helps with better decision-making using trip-level costs. We have seen immediate savings of as much as 3-5% of freight cost.
For faster vehicle procurement, our product FT Fulfil helps customers drive placement efficiency and SLAs with their contractual transport companies. We also have a spot bidding option where they can get access to our network of 4000+ transport companies to deliver goods faster to their customers.
Visibility: Our track & trace module provides 100% visibility into the market and owned trucks. It gives customers alerts on long stoppages, detentions/deviations. It’s configured in a way to help reduce TAT at loading/unloading points. FT Control comes with 20+ customised alerts to suit specific business needs. This module also manages every exception and comes with an automated ticketing software.
Payments: With our ePOD system customers can digitize their payments end-to-end. It captures deviations in delivery and reduces the transport company payment cycle from 15-30 days to 5-7 days.
Business Intelligence: To measure the health and performance of their logistics operations we give our customers visibility into their operational and commercial metrics. These actionable insights and dashboards help customers make better business decisions and help reduce overall logistics costs by 10-12%, improve customer OTIF by 15-20% and increase margins by 2-3%.