The year for many logistics service providers begins with considerable uncertainties as volumes, freight prices, and margins are going down, and fear of recession is ever-increasing.
History shows us that changes for someone can be a tragedy but, for some, a victory. As Winston Churchill said, Never let a good crisis go to waste. This advice is crucial during uncertain times.
Our newest article will underline why now is the best time to look for opportunities and advise what to do next.
Some reading this article will think for themselves, opportunities; what the hell are they talking about? Yes, we agree. For some, all opportunities are cut off, although it’s important to understand that each stick has two ends.
What do I mean by two ends?
First of all, we all need to understand that during a period of growth, shippers usually tend to stick with the status quo. They do not look for new service providers. Some are not keen to try out new LSPS, even if they provide lower prices, because they do not have time to onboard new service providers and do not even see a necessity. But this situation changes when a recession hits. Then everyone is looking for saving opportunities, so shippers leave more doors open.
Secondly, many shippers had developed bad feelings for existing service providers, who have used out pandemic opportunities and increased freight prices enormously. And this is good news for LSPS, which provide quality services at competitive rates because shippers are looking for a replacement or diversification.
Another important fact is that many changes within the supply global supply chains exist. For example, the war in Ukraine, and political tensions with China, Russia, and Belarus, draw utterly different supply chains, whereas some previously importing countries become exporting and wise versa. LSPS, who will be able to notice those changes, can create many opportunities for themselves.
Digital freight forwarders may also create opportunities for various LSPs. Previously digital freight forwarders have developed their business quickly with the help of marketing. But this year, there is a chance that many shippers will look to replace digital freight forwarders as they understand that digital DFFs do not provide a real difference. Moreover, as DFFs are cutting employees, there is a considerable chance that their service levels will decrease. Again many opportunities for LSPs to take over unsatisfied customers.
And last but not least, as it’s hard to sell in a downturn market, and each sale generates lesser profits, the morale of many salespersons will be down. Additionally, new sales skills are needed when selling in a recession, and many sales managers have not seen a recession in their lifetimes. All this said, those companies that can install attack mode in their sales organizations can already get more opportunities today.
What to do next?
Let’s start this section with advice on what not to do. And first thing that logistics businesses need to eliminate from their operations is the tendency to love the status quo. Doing nothing, waiting for a miracle, or cutting sales and marketing budgets during a change is a big mistake. Instead, quite oppositely, now is the best time to put more effort into looking for opportunities to generate new business.
The other thing that can help logistics organizations reap more benefits from the year 2023 is to make their sales and marketing more efficient. First, organizations must complete sales and marketing audits to find and eliminate inefficiencies. A good idea is to outsource marketing and public relationships to a third party; by doing this, organizations can save funds and even increase the efficiency of their marketing activities. Another good idea is to train your sales team to supercharge your sales team to get new deals faster.
And lastly, use this slowdown on various initiatives that can make your organization a better place to work for and with. Each economic downturn ends with a growth period, which lasts far longer, so there is a huge chance that we will start running soon. So let’s not waste a good recession.
About the Author:
Thomas Ananjevas is a supply chain professional with 15 years of experience purchasing and selling Logistic services and building a supply chain from scratch. He founded a consulting, training, and marketing company that works exclusively with the logistics industry. Thomas is helping logistics companies implement the necessary changes to ensure business growth and continuity. You can schedule a time to talk with Thomas about possible synergies by clicking here.