How How Transportation and Logistics Software Can Solves Challenges

Transportation and logistics software has evolved a lot in the past few years—and not a moment too soon. It’s hard to overstate how challenging the logistics environment has become in many ways, between supply chain volatility, price increases, labor shortages, and global uncertainty on a number of fronts. Businesses that deal with transportation logistics can use all the help they can get.Of course, there’s tremendous opportunity for evolution and growth within the delivery industry—businesses that are able to get more out of their supply chains and find ways to boost visibility can control costs more easily and delight customers more consistently. But you’ll have to overcome some serious challenges before you can truly capitalize on these opportunities. 

Below are some of the the key challenges delivery businesses will have to face in 2025, with a rundown of how logistics businesses can tackle them head on:

Cutting Transportation Logistics Costs

The single biggest challenge of the industry is cutting down transportation and logistics costs. Logistics costs can make up a huge proportion of any given business’s operating costs, and last mile logistics costs in particular can make up more than half of those total logistics costs. 

Where do those costs come from? Mostly fuel and driver hours, both of which scale not just with order volumes but with efficiency. 

For instance, you can reduce driver hours by ensuring efficient routes—but another key component of keeping down costs related to driver hours is to make sure their first attempt delivery success rate is as high as possible. This is a matter of ensuring on-time deliveries and keeping customers in the loop so they know when to expect the driver. If you can get both of these elements right, you can reduce missed and failed deliveries, which means drivers don’t have to spend their time on costly redelivery attempts.

You can also reduce fuel expenses in the same manner. While there’s obviously no way to control fuel prices, logistics companies can control their fuel expenses by optimizing their routes to reduce the total distance traveled over the course of a given day. And those miles can be reduced even further by ensuring a high first-attempt delivery rate. 

Meeting Customer Expectations for Visibility

Consumer expectations have changed significantly over the last few years. Consumers also expect better visibility over their orders and the ability to communicate directly with delivery drivers and support staff.

Meeting new consumer demands requires better visibility across the supply chain. This is the only way companies can provide on-time and accurate deliveries. But what does visibility over the entire transportation and logistics process look like?

Complete visibility means having the ability to track deliveries, while ensuring that drivers follow the right route plans and stick to the schedule. Visibility requires real-time alerts and notifications so that fleet managers and drivers can take prompt actions in case of delivery delays. 

Likewise, consumers expect to get real-time shipping notifications, updates, and accurate expected times of arrival (ETAs). Ideally, they’d even be given the ability to track their orders from the comfort of their own devices.

Dealing with Driver Shortages

Truck drivers have demanding jobs, which is why the driver shortage is a major problem in the transportation and logistics industry. 

Recruitment and hiring are time-consuming and expensive processes: companies have to scrutinize the applicants’ driving records, check on inspection discrepancies and traffic violations, etc. And on top of all of this, there simply aren’t enough drivers to go around.

One potential path forward here comes in the form of finding ways to stretch capacity—e.g. by improving routes enough that each driver can complete more deliveries in any given day.

Achieving Sustainability

There is more attention on carbon emission reduction than ever—at least partly due to emissions and anti-idling regulations set by governments. There is more pressure on companies as well, with the public demanding environmentally-friendly and sustainable practices from the private sector.

Transportation and logistics industry players have various ways of addressing environmental and sustainability concerns. They can adopt route and load optimization, upgrade their engines, track and report emissions, and leverage electric vehicles.

Electrifying an entire fleet in one go can obviously be costly, but many businesses are electrifying in stages as they replace other assets in their fleets. Of course, managing a hybrid fleet comes with its own challenges: you need to find a way to route efficiently when some of your vehicles have shorter ranges than others, for instance. Luckily, the right transportation and logistics software can be a huge help here. 

Upgrading other elements of your logistics operations (e.g. warehouses) is also an option for reducing overall logistics emissions—although it's a move that entails high upfront costs. As with any large-scale decision, the best vantage point for making a choice is one of full visibility. If you don’t have the transparency and the reporting to pinpoint your carbon footprint and its business implications, boosting visibility might be an important starting point.

Navigating a New Transportation and Logistics Software Landscape

As you might be gathering from the context above, most logistics companies need to adopt new and innovative technological solutions to overcome challenges brought by new consumer demands and scarce labor. Advanced technologies can help increase productivity and reduce operational inefficiencies, and they’re quickly becoming non-negotiable. 

Advanced route planning solutions help in cutting down transportation costs and optimizing fleet capacity. Data analytics enable companies to improve both operational efficiency and customer experience.

It can be hard for companies to find the right technology with so many solutions available in the market. Delivery businesses must assess their unique business operations to identify what they need in a given technology solution.

How the Right Transportation and Logistics Software Can Help

With rising costs and new levels of pressure from consumers, it’s impossible to overstate the importance of leveraging the right tools for the job in surmounting these challenges. That means finding transportation and logistics software that can help you:

• Gain visibility into your transport and logistics processes—including into any third party carriers or mixed fleet activities
• Optimize delivery routes to reduce miles driven and improve on-time delivery rates
• Document deliveries in real-time, from the warehouse to the end customer
• Provide a best-in-class customer delivery experience, including real-time delivery alerts, notifications, two-way communication, and live delivery tracking
• Compliance and standardization across the entire logistics chain
• Seamless integration with the rest of your technology stack

That might sound like a tall order—and to some extent it is. But solutions that provide all the capabilities listed above are out there, and by finding and implementing one that meets the criteria laid out above you can reduce costs, improve logistics performance, and delight your customers with every delivery. 

At the end of the day, these challenges aren’t going to fade into the background. In all likelihood, they’re going to keep putting pressure on logistics organizations, and the ones who are able to respond to them effectively will be the big winners in terms of long term success.

Luckily, new technologies like AI and machine learning are powering smarter, more connected, and more agile transportation and logistics software than what was available even a few years ago. By integrating this kind of solution into your logistics technology stack, you can potentially future-proof your business against new challenges down the line.