Logistics App Development for Your Business: Benefits, Challenges, Costs

Imagine this situation: One of your trucks gets stuck in the middle of nowhere halfway to the storehouse, the load check on-board is delayed, and some of your contractors cannot keep up with your KPIs. And all these things are happening simultaneously. It’s a complete nightmare for any logistics company. Although this exact situation is unlikely, logistics businesses can face a lot of issues due to their diversified nature. 

A mobile application is a good way to efficiently manage multiple departments and always be in touch with the employees. In this article, we gather all the necessary information you need to create a successful logistics application.

How does a logistic app work?

In a nutshell, logistics is the process of transportation and storage of merchandise. Even though it’s only one part of a supply chain, it’s still a complex field that includes a lot of components and nuances. The main components of logistics include planning, storage, packaging, inventory, transport, and control, and all of them should run like clockwork.

This is where a mobile app comes in handy. By organizing all the processes related to logistics in a single location, it facilitates their management. Such solutions can provide you with the ability to monitor all activities in real-time, with immediate access to information when needed.

Why embark on logistics app development?

It’s okay to have doubts when deciding to invest in something resource-intensive like the development of your own app. However, there are several reasons for creating an application for your logistics team. Here is why this kind of mobile solution can be beneficial.

• Overall management upgrade

As mentioned above, logistics is a complex process involving a large number of people and departments which must carry out their work simultaneously to avoid delays. In addition, these departments are usually not all located in one place. With a mobile app (or an app with both mobile and web versions), the process of synchronizing everyone to a single working rhythm becomes much simpler. In addition, you can control every step of the delivery process with a few taps or clicks.

• Driver performance

Managers are not the only ones who stand to benefit from a logistics app. Since drivers are able to track their routes, orders, payments, and vehicle status, apps make it easier for them to meet their KPIs. Communication between dispatchers and drivers is also improved, allowing drivers to report issues faster and stay more efficient.

• Reduced resource usage

Manual operations are expensive. This is true not only for working in warehouses and service stations but also for administrative tasks (and nobody likes paperwork). A logistics app can automate a lot of routine processes, saving you time and money.

Logistics industry: Market overview

Although we covered some benefits of logistics app development in the previous section, just because we say so isn’t enough. Without backing up our claims with facts, they barely mean anything. Here is some more concrete data to support the benefits of logistics apps.

• The value of the global logistics market reached $8.6 trillion in 2020. (Statista)

• By 2023, its value is expected to reach $15.5 trillion. (Transparency Market Research)

• The value of logistics deals increased 105% over the past 12 months in comparison with fiscal 2020. (PwC)

• Related to the logistics industry digitalization, the total value of the IoT industry is expected to reach $1.05 trillion this year. (Mind Aspire Market Research)

• In addition, 34% of logistics companies that adopted cloud technologies for their supply chain state that it has been beneficial since everyone can now access the same information. (Logistics Management)

Considering the statistics above, you can see that the logistics market is thriving and its digitalization is continuing to progress. That’s why this is the best time to think about your own software solution.

Types of transportation apps

There are four main types of apps for logistics.

Fleet management

The logistics tracking app development will help you create a solution to manage and maintain a company’s vehicles and fleet. If you develop this type, it will help you facilitate coordinating your trucks. These apps usually record and store various information for each separate vehicle ranging from its availability status to the technical characteristics and previous orders. Such solutions usually include an app for drivers which allows them to track the vehicle’s state and a web platform for admins where they can manage vehicles and analyze statistics.

Warehouse management

If you own a warehouse, having a digital management solution for it will definitely be beneficial. This app will allow you to gather, organize, and manage all the data related to the products stored in your warehouse. You can store information like the types of products, when they arrived, how long they should be stored, where exactly in the warehouse they are placed, and what truck should carry them to their final destination. To streamline the product registration process, we recommend implementing barcode recognition.

Route optimization

A location-based application can help your dispatchers and drivers plan the most efficient routes between key points. In this way, the workload for everyone involved in the process is reduced, increasing their efficiency. Also, drivers can indicate changes in road conditions such as traffic jams, accidents, construction work, and other occurrences in real-time.

On-demand logistics

These apps are meant for the general public. If your trucks do not run with full loads and have some free space which could be filled in, you can try working with private shippers. With this solution, you can collect orders from people who need their cargo soon. Investing in a partnership with a logistics app development company will help you enter new markets and attract more users.

Prominent examples of logistics apps

There are already plenty of applications on the market that could be your potential competitors. Here is some information about a few of the best logistics apps that are now available for users. We hope their success stories will inspire you.

XPO Logistics

Source: XPO Logistics

This company is the largest carrier of heavy loads in North America, which makes it a powerful competitor in the market. The main priority of XPO Logistics is customer satisfaction. Its clients can track orders in real-time and edit deliveries within the app if necessary. According to Statista, the company’s revenue totaled $12.8 billion in 2021.

Veeqo

Source: Veeqo

We mentioned apps that can help companies with their warehouses above, and Veeqo is the best example. In a nutshell, it’s a Warehouse Management System (or WMS) that helps retailers manage their storage. Veeqo is a convenient solution that allows users to run several warehouses from one place. It has all the necessary functions for a logistics app including a barcode scanner. The platform's revenue is estimated to be around $5.5 million.

FedEx Corporation

Source: FedEx

It would be a crime to talk about logistics without mentioning FedEx. FedEx (or Federal Express) Corporation is an international transportation, logistics, and delivery conglomerate headquartered in Memphis, Tennessee. The most famous service they provide is their air delivery, FedEx Express. Other shipping services include FedEx Ground for long-haul truck transportation, FedEx Office for outlet chains, FedEx Supply Chain for third-party logistics, FedEx Freight, and many others. The annual revenue of the company is approximately $90 billion. 

Key logistics app features

Features are the core of your application. Users will decide whether to give your app a shot or not based on what it can do. The functionality of mobile apps used in logistics can be divided into three main user roles: drivers, dispatchers, and administrators. The following are some essential functions you should implement to make sure all users are happy.

Features for a Driver

• Sign up/Sign in: This basic functionality is necessary for almost any application. Drivers should be able to create a profile using their email address, phone number, or social media accounts. Then, they should be able to log in to their account from different devices using these credentials. You can also implement passwords, PIN codes, or Face ID to give drivers additional options for secure account access.

• Profile: When a driver enters the app for the first time, they need to create their profile. They can indicate their full name, the vehicle they drive, their driving license and add a photo. A profile helps drivers manage the necessary documentation, see the statistics of their drives on a dashboard, and track their activity. It’s also a convenient way for managers to quickly access the information they need.

• Route management and navigation guide: The app should be able to automatically plan drivers’ routes with the help of GPS so they can avoid traffic jams and narrow streets. In addition, drivers should also be able to edit routes manually if the system failed somehow.

• Logbook: Drivers should be able to check the main route points, log work hours, and report the state of their cargo as necessary. Administrators can then monitor the drivers’ work.

• Offline support: It’s definitely helpful for drivers and admins to be able to communicate quickly, for example, via an in-app chat function. However, drivers may be offline when on the road and they should still be able to connect with admins in case of emergency.

Features for a Dispatcher

• Sign up/Sign in: No additional introduction is needed.

• Control panel: Dispatchers need to have access to information about drivers’ status, their cargo, routes, and approximate delivery times. Also, dispatchers should be able to see if a particular driver has any issues on the road. It will help dispatchers follow the delivery and report if anything goes wrong.

• Notifications: Dispatchers should be able to both send and receive notifications so that real-time communication never stops and all processes stay up and running. You can also implement this feature in a form of chat.

• Navigation: Dispatchers should have real-time access to drivers’ routes and be able to alter their key points so they can provide timely support to drivers.

• Receiver information: In addition to the necessary drivers' data, dispatchers should also be able to view the details for receivers so they can improve delivery management.

Features for an Admin

• Sign up/Sign in: Once again, secure registration and login are a must.

• Transport management system dashboard: This is basically an admin panel’s home screen. The most relevant information about drivers, dispatchers, and cargo is conveniently shown in one place. It can also include data such as shipment status, revenue and costs over a certain period of time, recent operations, and pending complaints.

• Fleet management: This feature of logistics software displays a list of all the vehicles you have, including their types, rates, and availability. It allows you to allocate resources to orders literally in one click.

• Budget management: Adds transparency to your expenditures and revenue and facilitates the processing of bills.

• Feedback and analytics: Users should be able to quickly handle complaints from all parties involved in all processes: dispatchers, drivers, and receivers. Also, you could see the statistics regarding successful and failed deliveries, drivers’ ratings, and receivers’ reviews.

Logistics app development: Steps to follow

Now, that we know what the final result should look like, we can dive into the question of “how to make a transportation app.” In general, the development process consists of the following steps.

1. Market research

Since the logistics market is not new, you should analyze what players are already there and what they offer to their users. You can analyze the reviews people leave to understand what they like about the solutions they use and what they want to be added.

2. Hiring experts

You should find a dedicated team that will be ready to assist you in the development and validation of your idea. However, you don’t need to rush and partner with the first logistics app development company that approached you. Take time to consider many options and find the company whose corporate culture and business values correspond with yours. They also should have relevant expertise and a proven track record. Websites like Clutch and GoodFirms can help you take a look at reviews the company has and decide whether you want to partner with them.

3. Design

Creating the UI and UX for your logistics app is an essential part of the process. Your users should feel comfortable in the app and be able to easily navigate it. If you don’t pay enough attention to what your app looks like and how it feels using it, you won’t receive positive feedback from your drivers, dispatchers, and admins, and, as a result, even see the increased churn rate. To create a good UX/UI design, we recommend starting the process with a prototype. A prototype is a rough implementation of your project. It will help you quickly find bottlenecks and core mistakes and fix them.

4. Development

For the initial release, a minimum viable product (MVP) is perfect. This will include only core features and help you understand if you are building a solution people really need. The success of your MVP will define the entire logistic app development that will follow.

5. Release and updates

When your logistics software is out and you receive some positive feedback, you can start adding more advanced features to your app like barcode scanning or a payment gateway.

What are the reasons for logistics apps to fail?

If you have never worked with mobile logistics app development before and want to develop an app for the first time, there are various obstacles you must overcome to prevent your app from failing. This section covers some of the main problems that can hold you back from success, so you can avoid them.

Choosing the wrong type of app

It’s natural for all businesses to strive for the best, and logistics app development is no exception. However, sometimes the final product can be too complicated for actual users or include features that are not really needed.

You can avoid this situation by staying focused on the specific goals you want to achieve with your app. If it’s hard for you to formulate a clear vision, ask your business analysts and tech team. They will help you find the best technical solutions for your ideas.

Poor UX

Besides redundant functionality, logistics apps can also fail due to inconvenient user experience design. It’s not enough to simply move a desktop solution to mobile platforms with almost zero changes and vice versa. Mobile and web apps have core differences in their UX, so you should work with designers in the applicable field or partner with an experienced software design agency.

Not listening to your employees

If you are developing an enterprise transportation solution, your employees will be your end-users. Their needs are your top priority, so you should listen carefully to what they want to see in the app and what they find useless. If you ignore them, the time and money you spend on the development will be a total waste and your employees will receive a solution that simply doesn’t work for them.

Trends to follow

The industry of logistics mobile app development is constantly changing. It may be hard to analyze all the new apps that enter the market every day, but we can pinpoint the rising trends to help your app keep up.

• Artificial intelligence (AI)

AI is applied to many parts of the logistics process. There are already autonomous vehicles and robots taking part in the supply chain. In addition, several companies are working on smart road projects. In general, AI is capable of enhancing inventory processes and improving accuracy through predictive analysis, which can be useful in transportation and storage.

• Blockchain

Blockchain has been rapidly adopted in the digital world and has already had a huge impact on several business areas like fintech and data security. Logistics can also apply blockchain tools to their services. This technology can provide companies with secure contracts, protected transactions, and broader transparency.

• Cloud integration

Cloud technologies are not new on the market, but they continue to be very popular. In fact, the usage of cloud solutions is on the rise in almost all business areas, including logistics. Cloud-based mobile apps are faster and more flexible than traditional ones. Cloud services also significantly reduce maintenance costs and increase your data security.

Tech stack for a transportation app

There are two main options to choose from to power up your logistics with a digital solution: using a ready-made app and developing custom logistics software. A ready-made solution will quickly provide you with the functionality you need, but using one may cause you to overpay for features you won’t use. With a custom logistics app, you will have a tailored tool that corresponds to your business needs.

In general, the tech stack for a logistics application will depend on the specifications and functionality you would like your app to have. The following are the most common tools which have been proven to be efficient and functional.

• Frontend development: Swift, Kotlin, React + TypeScript

• Backend development: Node.js, Python

• Cloud: AWS, Microsoft Azure, Google Cloud

• Payment gateway: PayPal, Stripe, Braintree

• Database: MongoDB, MySQL, PostgreSQL

• Messaging: Twilio, PubNub

Our logistics app developers can provide you with a more detailed tech stack based on the specifics of your project.

Logistics app development cost

The cost of creating a logistics app for your business can vary depending on many factors such as detailed specifications, deadlines, team location, and hourly rate. The following are rough estimates for the costs of an average single-platform application with three user roles.

If we consider the average rate to be $40/hour, the average cost of logistics app development ranges from $25,000 to $35,000 or more. Feel free to contact Yellow for a detailed estimate based on your specifications.

The best team for logistics app development

The most efficient team composition for building MVP logistics software should include the following members.

• Project manager

• UX/UI designer

• Software architect

• Backend engineer

• Frontend engineer

• QA engineer

When your logistics team has given you feedback on your MVP, you can include more specialists like business analysts, security consultants, or more software developers or QA engineers.

Monetization strategies

A logistics app can be monetized in several ways.

• Paid application: A user makes a one-time payment for the installation. Usually, there are no further charges for additional functions or in-app purchases in this case.

• Freemium: This model is the most popular and convenient for most types of applications, including logistics apps. You provide the most necessary functions for free and then users can pay additional fees for a more advanced version.

• Commissions: In this model, you charge independent drivers for using your application. In this case, the commission is taken out of the driver’s revenue so they can use the app.

• Ads: Another easy way to monetize a logistics app is by showing advertisements to users. Here it’s better to opt for banners instead of video ads so you don’t distract users from important information.

These monetization options will help you cover the development expenses and set up a stable revenue stream.

Final thoughts

Mobile apps can provide logistics businesses with significant benefits. A well-built logistics app can become a powerful tool for your business. It provides you and your employees with fast and reliable assistance and helps you lessen the managerial workload. As a result, you will be able to boost your company’s productivity, improve security, and get a competitive advantage. Sure, you will need to invest your time and money in logistics app development, but it will pay off in the long run.

If you want to create a successful logistics app, feel free to drop us a line! Contact the specialists at Yellow and we will help you turn your idea into a reality.

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