Logistics in the Hospitality Industry 2022: Everything You Need to Know

Logistics in the hospitality industry

Logistics in the hospitality industry plays a key part in encouraging customer loyalty, providing excellent customer service and boosting brand success.

The modern hospitality industry needs a responsive and resilient business model to enhance supplier relationship management (SRM). Sustainability becomes the ideal norm for hospitality industries by transforming their spaces to give a natural look and receiving ingredients and other necessary products on time.

Hospitality industries need robust logistics service providers to fulfil their requirements of food, fixtures, furniture & equipment, operating supplies & equipment, building materials & equipment, computers & entertainment equipment, etc. to provide appealing solutions for consumers.

Key insights of logistics in the hospitality industry

  • The global logistic market reached $9.525 billion in 2021 and is expected to reach $13.326 billion in 2027. [Research and Markets]
  • Global digital transformation spending in logistics reached $45.6 billion in 2022 and is expected to reach $75.5 billion in 2026. [ReportLinker]
  • The global last-mile delivery market reached $18.7 billion in 2020 and is expected to reach $62.7 billion in 2027. [All The Research]

The above facts will provide sufficient scope for the hospitality industry to penetrate digital transformation spending and last-mile delivery solutions for augmented logistics operations. The logistics industry has always embraced solutions that seamlessly allow them to complete their paperwork with the least hassles. 

For instance, signing bills and invoices can be quite tedious. Digital signatures have made such documentation processes quick and secure. 

Similarly, smart contracts, an application of blockchain technology have hugely reduced red tape and automated the overall procurement process while reducing human error. 

In this article, you will learn how five logistics solutions can transform your hospitality business in 2022.

5 Logistics solutions for the Hospitality Industry in 2022 

We will now look at five steps to determine logistics for the hospitality industry.

1. Unify transportation facilities across air, road, rail, and shipping lines

You can’t extend your hospitality business without retaining a unified transportation facility. Suitable collaboration between various transportation channels can smoothen the transportation process between one point and another. The hospitality industry needs timely transportation of building materials, delicate items, operational equipment, and other hospitality commodities.

Find expert third-party logistics (3PL) or fourth-party logistics (4PL) service providers to accommodate real-time information, optimisation, and collaboration between road, rail, air, and shipping lines. For example, international air freight service providers can fulfil your air shipping requirements well and unify them with other shipping modes.

As a result, the hospitality industry can streamline transportation and appointment scheduling when accessing a unified transportation system.  

Here are a few top benefits of creating a unified transportation system:

  • One database and one user interface to provide end-to-end transportation facilities.
  • Enhancement in inbound delivery and outbound customer service performance.
  • Curtailment in manual planning, scheduling, and executing transportation overhead.
  • Drastic decrease in premium freight cost and overall transportation costs.

2. Adopt an ecommerce gateway for logistics support

Consider a customised ecommerce platform for your logistics support in hospitality businesses. These figures compel you to enable ecommerce gateways for your hospitality business. Global ecommerce sales reached a valuation of $5.4 trillion in 2021, and it is expected to reach a valuation of $5.9 trillion in 2022.

Before diving deep into the topic, let’s understand how ecommerce logistics work. Ecommerce logistics is an essential element of the supply chain. It coordinates various aspects of the logistics industry in two directions: forward direction and reverse direction. In the forward direction, logistics suppliers deliver the goods to buyers, and in the reverse direction, they replace defective goods with non-defective items for consumers.

Once an order is placed on the ecommerce platform, the logistics supplier gets an alert, and it will activate all its channels for smooth delivery. Make sure your ecommerce logistics providers have a profound knowledge of transport laws, rules, and regulations of movement of goods, roads, and territory knowledge.

  • Make sure your logistics provider should have a wide distribution across your territory.
  • They should have a good outbound performance rate, efficiency, and speed of logistics service.
  • If you have a global presence, hire a globally reputed ecommerce logistics firm.

3. Use a strategic project management software

Enable strategic project management software to collaborate between logistics, ecommerce, and project management teams. Always design a standardised system with more than two departments to connect. When communicating and collaborating between different teams, implementing an agile approach can mitigate the complexity of logistics.

Strategic project management should have proper communication between various teams regarding scheduling and planning of transportation overhead. Ensure you are equipped with enhanced resource materials to project management software to achieve the highest level of operational efficiency. Budget is a critical aspect of logistics.

Collaborate with different departments and make a flexible budget for logistics because you might need to reship for urgent materials or defective items. Whatever processes or strategies you have channelised must have clear documentation.

 4. Use a warehouse management system

A warehouse is invisible to your customers, but it plays a significant role in customer satisfaction and the urgent supply of hospitality materials. Suppose you have ordered fixtures and furniture from an international logistics firm, but your shipment will arrive late due to some issues. In this critical time, materials stored in warehouses will accomplish your needs. Warehouse stores all the essential materials that may be required in the future and cuts the additional expenses for urgent shipping.

A warehouse management system (WMS) is essential for managing your warehouse. It can automatically analyse demand, predict sales and build an efficient daily operating plan. It leverages data and provides real-time insights into inventory location. In addition, sharing data with transportation management software can enhance logistics operations.

Here are some tips for warehouse optimisation:

  • Batch picking ensures quick fulfilment of multiple orders for the same product.
  • Zone picking ensures picking up SKUs (Stock Keeping Units) from the designated zone.
  • FEFO (First Expired, First Out) helps perishable products to ship earlier.
  • FIFO (First In, First Out) ensures older items should be shipped before they become irrelevant.

 5. Make a strong relationship with a third-party hospitality logistics provider

Consider selecting an experienced third-party logistics provider that can cut expenses and help to expand your market. Working with outsourced logistics service providers can benefit your hospitality business with their expertise and experience.

Make sure you have partnered with a subject-matter expert who will be compatible with your logistics requirements. Conduct sound research on your 3PL partner and analyse their strengths and weaknesses. If their weaknesses don’t hamper your logistics distribution, proceed with the expected partner.

Here are some tips to select the right 3PL partner:

  • Ensure they have experience in moving your hospitality commodities.
  • Make sure they cover your entire target geographical region.
  • What policies or compensations do they have for the delayed delivery?
  • Always ask for customisation as one-size-fits-all may not work for your hospitality business.

Conclusion – Logistics in the hospitality industry

Logistics is the most complicated part of your retail supply chain. However, using the right logistics management systems can streamline the logistics supply for your hospitality business. Put simply, the involvement of tech can effectively help you plan, execute, and optimise your logistics process.