Technological innovations dramatically influence global business. Which means that the transportation and logistical industries shouldn't miss their chance. The latest research shows a record level of investments into logistical technologies. This is an indicator of high demand in a segment of freight forwarding. If you want to gain benefits from the latest trends in logistics but don't know how to start then this article is for you. Let's get started!
Why Is It a Must to Adopt the Latest Trends for Your Logistic Startup Idea Verification?
Logistics trends in 2017
According to CBInsights the most successful and capitalized companies are concentrated on e-commerce services and delivery businesses. Investors are constantly increasing their presence in this sphere and the yearly volume of transactions grows starting from 2012. CB Insights estimated that a large part of the revenue belongs to the companies which use software programs to increase the efficiency in a supply chain and logistics ecosystems (for instance, food supply on demand).
CB Insight's research
As you can see, investors are ready to give money to logistics and supply chain startups. Later, we will list some of the possible logistics enterprises which you can use as a basis starting a logistics company. But before that, we'd like to talk about the current issues in this sphere. These problems may become your gold mine if you create a mobile app or a software solution for them. Here are some trends you can use in your business.
Latest trends in logistic industry
Logistics based on a large number of users
We all remember the success of Uber for X business model. Some companies (like Convoy and Cargomatic) already tried to implement this solution as a crowdsourcing application.
If you are starting your own Uber for Trucks, check our article and an estimation of the cost
The relevance is that about 70% of all companies that transport cargos only by trucks in the USA suffer losses. It all happens because the majority of trucks drive back empty covering large distances and spending money on fuel and other materials. Companies offer their available space to the brokers to shorten this distance and get at least a few orders. Yet, the brokers take a large share.
Apps for trucking allow transportation companies and private long-haul truckers to contact other companies that need to transport their cargo without any middleman. Logistics apps take fees for each deal. Nevertheless, it is much cheaper than to cooperate with brokers.
Storage space advancement
E-commerce growth and the customer demand on delivery services stimulate warehouse optimization. As a result, the rental fee for the storage facilities increases. The main problem is that there are not so many storage areas available and the rent grows every year. All these factors influence the solutions created to optimize storage facilities and the efficient placement of goods.
Find out what latest technologies can speed up your warehouse business in our article
Supply chain cloud management
Why should a supply chain go to a cloud? There are many reasons. Here are the most important of them:
- Easy adjustment allows you to pass cloud applications to labor distribution. The labor that includes logistics supply chain.
- Low cost reduces risks and allows firms to use new applications without high costs. What is more, these systems can be used all over the world, in any city or town, which is important if the facilities are located in different places.
The most promising startups in logistics
We want to look closer at some logistics industry trends that have prevailed lately and are still on the front burner in the logistics sphere. We checked CrunchBase, CB Insights and AngelList to find the most promising startups in logistics, here are the best of the best who managed to benefit from logistic business opportunities.
Top logistics startups
It's a website that offers shippers and consignees a feature to compare prices on transportation by sea as well as on transport costs among different transport operators. The startup was established in Copenhagen and now they are mostly concentrated on shipping from Asia to Denmark. However, they want to extend the network throughout the world.
It is a platform which connects users who need to get or send something with the help of travellers. It's a rather innovative and unusual solution for the delivery of goods.
Stop inventing the wheel. Use a working business model to create your Uber-like startup right now!
Uber for trucks in the global logistical sphere is available only in Hong Kong now. With UberCargo a truck on demand comes within a few minutes. A customer can load his stuff up by himself or ask a driver for help. A user can check his or her delivery status in a real-time mode via the app. A customer can check where his cargo is or can go in the truck with the driver as a passenger.
Flexport is a complex platform for freight forwarding that looks like an online board. The platform allows users to compare options, book cargo as well as track and manage the deliveries. The Flexport solution offers air and marine cargo transportation as well as insurance services.
MakeSpace is a storage on demand solution. The platform provides the receipt of goods, as well as storage in different cities. Here you can also search for cargo.
It's a cloud application to manage business. The app shows all the statistical data and explains business indicators. The application also gives recommendations on business optimization.
There are many more fantastic startups. We showed you the best logistics startups as examples to explain how some startupers are trying to find their segment in a logistics niche and to offer their solution to one problem or another.
Optimization and convenience are the two components of a logistics business. Take them into consideration while you are looking for your own segment in the industry. So, all we have to do is to find an idea for a startup in the logistics business and for that, we move to the next block.
Logistics business ideas
Basically, a successful business idea nowadays is something that eliminates an existing need with the help of online tools. What we need to warn you about from the very beginning is that for logistics startups this business is hard. Big players of the market rarely are willing to change their business models. And if you want to create linkages between ships, railways, marine, and cargo transport operators, you will need lots of time and efforts. And if you still want to work in this sphere you should be prepared for the facts that:
- All logistics companies still live in the past. It concerns the technologies and the way of thinking.
- It's an unbelievably competitive area for startups.
But nothing is possible. Especially, if the benefits from your product are difficult to overestimate. To find an idea (a really great one) for your logistics tech startup, we suggest you performing a few steps to understand how to start a logistics business and what product you really want to create. What steps are they?
Starting a logistics business
Step #1. Contact the owner of such a business
Usually people who work there know manufacturers, carriers, storage companies, customs agents and customers on both sides of the border. They hire employees who manage spaces inside air transport or marine containers as well as transportation time including customs inspections and the shipping itself. If you can get a job in this sphere, take the opportunity. It will not only give you the understanding of what these companies do but also introduce you to the customers who use the services of the companies.
Step#2 Concentrate on specific segments
It would be even better if you concentrate on specific segments of a larger logistics market. Segmentation can be based on different levels of the market, like geography, brunch niche, specialization, and other factors. You can use any of them to focus on a segment you need.
For instance, TTS Logistics owner Kelly Kristy decided to focus on exhibits shipping all over the world. It proved that the choice of a narrow segment can be even more profitable than a desire to cover all spheres. Of course, you can expand your business after a while and cover other market segments. However, it is better to start with one solution.
Step #3. Think about a business model
For example, Uber for X has proved that a good business model can influence lots of things. And logistics is not an exception. And an opportunity to cut the expenses is crucial for a company.
Step #4. Do research on the competitors
What if your idea has been taken already? By doing that you will understand the weaknesses and strengths of your solution. You can take an already existing business model as a basis. But you need to improve it, make it even more useful. Because logistic business relies on statistical data, coherence, and uninterrupted work. If you understand these details you have to include them into your product.
And finally, here are some logistics business plans and ideas of small-scale niches for your startups:
Logistics business ideas
Focus on a specific type of transportation, like extra large objects (aircraft parts, modular houses) or the transportation of perishable food (with climate control facilities) or blood and human organ transportation. These niches are almost free, think about it!
The niche is very promising if you decide to create a solution for it. What you can offer here is a real-time tracking of animals, online filling of needed documentation via the app and so on. Here your imagination isn't limited. You can talk to farmers to understand their needs better and include the best solution into your startup.
You can optimize the process of cargo delivery combining different kinds of transportation.
It can be anything including food and a personal shopper. But you have to be sure that customers really need it.
The new technologies like barcode scanners, optimization systems, and customers' data analysis can be used in this sphere.
Here is a video for you about warehouse optimization and all the newest technologies you can apply to advance your warehouse business
I hope we inspired you with fresh ideas and accomplishment. Despite the fact that logistics is a very tedious sphere of business it doesn't have to stay where it is. The same as other progressing areas, logistics have to be advanced. If you want to start a transportation business or think about how to start a logistics company based on advanced software systems, write us and tell us your idea. Cleveroad is a l ogistics software development company with years of expertise in the field.
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