Driving Profitability in Logistics

Amit Maheshwari, Softlink Global CEO

“We expect all our businesses to have a positive impact on our top and bottom lines. Profitability is very important to us or we wouldn’t be in this business” – Jeff Bezos, Founder & CEO, Amazon.com

As very rightly put by Jeff Bezos, profitability is the primary goal of all business ventures. Without profitability, the business will not survive in the long run and so driving profitability is very important. Theoretically, increasing profitability is very simple – all we need to do is to work towards increasing revenue and reducing expenditures. Practically though, it is one of the toughest challenges to increase revenue and cut down expenses.

For logistics companies, profitability has always been a difficult challenge. Despite increasing revenues, only a small number of logistics services providers do achieve growth in profitability. It means that as a logistics service provider to grow your business profitability, you must look beyond traditional ways and pursue fundamental change. Effective usage of logistics management software at each critical juncture of business successfully drives the profitability north-wards. Let us see how.

1) Power of Information

Gone are the days of making decisions based on “I think…” and “gut feelings”. Making informed decisions based on facts is today’s best practice. By putting the available information to good use, you can achieve great results. Utilizing data using web-based freight software you can generate detailed reports that help in informed decision-making, thus resulting in simplifying operations and avoiding barriers. With auto-alerts and notifications triggered from your freight ERP, you can easily improve the speed of response and avoid negative business impacts. Optimizing the operations to work in tandem with each other increases the efficiency of your business which eventually has positive effects on your profitability.

2) Business Optimization to Cut Costs

Process standardization and EDI help in improving workflows resulting in increased productivity which in turn generates greater revenue and higher profit margins. Using closely integrated operations you can easily reduce manual errors in documentation and efforts of repeated data entry.

Advanced freight software allows you to integrate your entire business functions and standardized processes, so you can focus on more fruitful business activities such as customer service, business development, etc.

3) Stop Revenue Leakage

Identifying the avenues to stop revenue leakage is the most important way of improving profitability. ERP software enables you with powerful accounting and billing applications to effectively integrate financial accounting with operations. The integration of operations with accounts is exceedingly important to improve cash flows, reduce costs, and control revenue leakages. E.g. your sales team can set the alert for raising an invoice to a customer for a particular job. As per the alert, your billing team can raise the invoice and set the alerts for follow-ups based on the credit period of the customer. This will help you in minimizing the period of receiving the payment eliminating the delays in sending the invoice or the chances of extending the credit period due to lack of communication.

4) Improve Customer Loyalty

As we all know, it is always simpler, easier, and more logical to get repeat business from existing and satisfied customers as compared to finding new customers. Existing customers also prove to be more profitable as businesses save on cost, time, and efforts in finding new customers. Thus, improving customer loyalty is of utmost importance for you to drive higher profitability. Logistics software helps in improving customer loyalty by providing multiple opportunities to improve customer satisfaction. Further, you can:

  • address your customers queries more efficiently
  • provide automated and real-time shipment or cargo tracking
  • use alerts and notifications accurate and timely updates

5) Effective use of CRM

CRM acts as the coordinator for sales and marketing departments. Categorize and organize your campaign and customer data at a central location for easy access. CRM makes it simpler to keep track of the leads progress and set up follow up appointments with prospects. Integrated logistics software with in-built CRM brings new customers to you while keeping the existing ones satisfied.


Profitability is an elusive target and requires focused efforts embedded into the business strategy of your logistics company. Productive use of logistics ERP can help you in streamlining the operational procedures to eliminate factors that pull down the profitability. Software for logistics companies also supports the efforts that push the profits higher.