Competition The Key To Delivering Value To Customers In Logistics Industry
One of the objectives of the Transport4U Freight Exchange is to create competition to achieve benefits for businesses, consumers and the economy. Extolling the virtues of competition in Malaysia by using freight exchanges not only delivers value to customers it can actually increase profits for hauliers and logistic companies.
Using freight exchanges like Transport4U in which haulage and logistic companies compete against each other to secure transporation work benefits the consumer because they can choose who they award the work to in a price free system, therefore customers can in some circumstances get their deliveries at below market rate.
Transport Exchanges Deliver Value and Competitive Pricing
A customer who has placed a free advertisement to transport their goods will receive quotations from Transport4U members but, there is no obligation to award the job to the company placing the quote.
Instead the savvy consumer now knows the price that company X is willing to do the work for, so safe with this knowledge the consumer can negotiate with the next company to offer a quotation, if company Y wants to win the job they will have to reduce their price to beat company X.
This can continue and the consumer can choose whover he wants to transport their goods.
But how can freight exchanges benefit hauliers and logistic companies?
This is best summed up by describing the conundrum that all logistic companies around the world suffer from, Empty Backloads; This occurs after a truck has delivered its goods. The truck has then to return to base and if no load can be found for the return route then this becomes a 'dead' journey.
Diesel and toll fees still have to be paid on the return journey and the payment covering the overall journey can only be charged on the delivery run. Margins are already tight in the logistics sector so many hauliers are prepared to cut their normal rates to gain a return load just to improve the margin on every load delivered.
This is where the haulage company delivers value to consumers by reducing their rate for a return load. The canny consumer can save $$$ while the haulage Co is also happy because they has increased his margin on what would have been a non paying return journey.
The trick for both consumers and logistics companies is to match empty return loads with consumers wanting their goods delivered on this return route, this is what freight exchanges excel at.
It is not just empty trucks that can be advertised, a truck travelling on any route can advertise their spare load capacity in the hope of filling their truck and increasing their profit margins.
Competition between haulage companies in the return load sector can also drive prices down even further.
There are many aspects to how this freight exchange works and can create healthy competition between haulage and logistics companies.