In today's time, shipping companies in UAE play an essential role in easing trade facilitation and other companies' business operations. There are various factors that pose challenges for logistic companies in Dubai, such as increasing client demands and fluctuating customer needs and complex business models. I have listed the top 8 challenges that logistics companies face today to narrow it down for you.
1. Improving customer service
Punctuality and transparency are the crucial things to consider for customers. With the help of technology and the following systems, customers can track their cargo status and upload it on social media. Customers' expectations have grown in today's time, and for this reason, they do not mind paying an extra amount for same-day delivery.
2. Manpower managing
Management is full of responsibilities and becomes more interesting when handling workforce management. The humanitarian approach is amongst the crucial needs that should be administered for managing human resources. When it comes to shipping companies in Dubai, it is even more stimulating to manage the workforce as the drivers and staff stating location differs. Appropriate coordination between them is required for quick and easy cargo supply.
3. Business process improvement
Notwithstanding the new technology needs, it has become an increasing challenge for logistics companies in Dubai to stay on top of new technology in business processes. Benefitting from these new opportunities sounds enticing, but adapting and embracing the latest technology can be overwhelming.
4. Government rules
Shipping companies in UAE are the victim of the stringent rules imposed by the central, federal, state, and local authorities. Transportation regulation and security may differ in other countries, and familiarizing all the company personnel with the rules can be a significant challenge. Furthermore, these rules and regulations limit the scope and autonomy of logistics companies in Dubai and restrict the freedom to explore other available options and opportunities.
5. Environmental Regulations
Most governments globally have imposed stringent anti-idling and emission reduction regulations for vehicular movement in the country. This rule could mean that the compliance cost can exceed their benefits for the logistics companies, which can be detrimental for business.
6. Economy
The success of shipping companies in Dubai largely relies on the economy. The industries thrive when the economy is on growth. However, during times of recession or inflation, the shipping industries are pressured by increasing compliance rules, declining demand, and additional increases in key cost centers.
7. Fuel cost
Fuel cost is the primary concern for businesses globally, given that they are the highest contributors to increasing transportation costs. Higher fuel prices can result in an additional fuel overcharge for consumers, thus increasing the total shipping cost or freight products charge.
8. Transportation costs
High fuel prices, peaking inflation, and increased wages indexes together to make up for the increase in transportation cost. Shipping companies in UAE adopts strategic plan to avoid such bottlenecks and bring transportation costs to a minimum. Failure to minimize costs can result in a rise in expenses and subsequently and losses for the company.
Conclusion
After reading the above challenges, you may wonder whether logistics companies in Dubai can meet rising customer expectations and still make a profit? The simple answer to this is yes, provides they remain committed and flexible to upgrading people, processes, and technology. The name of the game is a constant evolution.
