Winning CX in Logistics
Winning CX in Logistics
Orchestrating the Connected Experience – the secret to delivering exceptional customer service............... 03
Delivering winning Customer Experience while optimising Cost to Serve – A roadmap for logistics
providers............................................................................................................................................................................................. 15
06 Conclusion...................................................................................................................................................... 24
01 | Introduction
The logistics industry is undergoing massive changes in the post-COVID era. The aftermath of this disruption and continued
geo-political uncertainty has seen fluctuating availability1 and pricing2 issues. When Gartner asked supply chain professionals for
their top 3 logistics priorities, the respondents identified the following:
1https://www.ship-technology.com/features/global-shipping-container-shortage-the-story-so-far/
2https://www.livemint.com/industry/red-sea-attacks-send-shockwaves-through-indian-exim-business-container-costs-up-400-freight-rates-soar-11704796039879.html
3https://www.gartner.com/en/newsroom/press-releases/2021-12-14-gartner-survey-finds-74percent-of-logistics-leaders-expect-their-logistics-outsourcing-budget-to-increase-in-the-next-2-years
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02 | Revolutionise Customer Experience in the logistics industry
The global shipping, freight, and logistics industry is a dynamic, constantly evolving business where technologies are being
rapidly adopted. World-class customer service can be both a differentiator and a game changer for logistics providers seeking to
carve out a unique position for themselves versus their competition.
In the post-pandemic world, customer behaviour has undergone a profound shift. This requires companies to adapt to changes
in consumption, channel shifts, and customer expectations, particularly with increased demand for speed and convenience.
However, this changing consumer behaviour has placed new pressures on the cost structures of logistic companies. Customer
service is expensive, and businesses are pressured to find innovative ways to reduce customer service costs while improving
customer experience.
For a supply chain leader, this means investing in new-generation technologies to create a connected experience that will
increase its customer service team’s efficiency, productivity, and effectiveness and provide customers with a consistent
experience across all touchpoints. As per a APQC survey report:
There are two broad levers that can help logistics companies to
transform their cost of Customer Experience.
In this digital-first world, a connected experience is not a choice anymore but is critical for businesses to drive innovation,
productivity, and consistent customer service across all brand touchpoints. Consistency in customer service creates a positive
experience and builds customer trust and loyalty. In this Hyperconnected Ecosystem, two key elements that drive a connected
experience are the Connected Customers and the Connected Workforce. Enterprises can drive a compelling and differentiated
experience for their customers and workforce as shown below.
A US-based contact centre solution provider- RDI Connect, has developed an illustrative model to calculate the contact centre
operation cost. As per this analysis, per hour, per employee cost of running a contact centre is USD 33.76, with the cost breakup
as follows:
Hourly Cost/per
Cost Component Definition Calculation Assumptions
employee
Around 25% more than its CCRs Supervisor paid 25% more than rep = USD
Supervision
(plus benefits) USD 1.54 23.06 per hour/15 reps per team
Time the CCR is not logged into the Shrinkage factor of 20% (i.e., full-time employees are
Shrinkage Cost system and unavailable to work. It can USD 4.00 available for customer interaction 32 hours (40 FT
range from 15 to 40%. hours X 80%) each week)
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Hourly Cost/per
Cost Component Definition Calculation Assumptions
employee
Wages, training costs and turnover costs due 25% additional cost burden due to 25% attrition with a
Attrition Costs
to attrition USD 5.00 base cost of USD 23.06
*Assuming that an employee will cater to ~10 calls per hour, the cost-per-call rate will be around USD 3.4
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Reducing costs doesn’t mean compromising on customer service quality; it is about driving more efficiency into existing
processes and resources without damaging the employee experience or service capacities. It might seem challenging to maintain
a balance between customer service efficiency and superior customer experience, but it can be done by:
Achieving this balance is feasible, and businesses can realise significant costs and
handle customer inquiries more effectively. Let’s see how this can be achieved.
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Integrated software and cloud-based contact centre services: Several
studies show that the cloud is winning the battle against legacy premise-
based contact centres. While leveraging the cloud offers increased agility,
flexibility and scalability, businesses can save on the costs of the on-
premise setup. With the cloud, agents can work remotely, thus saving
the costs associated with leasing or maintaining an office. Moreover, with
Customer Relationship Management (CRM) integration, it becomes easier
for agents to offer omnichannel support and handle customer inquiries
more efficiently and quickly.
15% to 40% IT operating cost saving for enterprises that opt for cloud
solutions - BCG report.
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3.3 | Use cases of automation and cloud adoption in logistics contact centres
Work from anywhere Transfer calls from Handle multiple calls Rapidly set up new Get real-time in-
fixed telephony to at once, take calls accounts and add sights on sales rep
their own mobile after work hours and new lines/users performance
phones transfer calls to
teammates
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Moving to the cloud significantly reduced facility and maintenance costs (Read more)
DHL transitioned from an on-premise system to VCC Live’s cloud-based solution, thus enabling its employees to access contact
centre software anytime, anywhere, making work-from-home a reality. This helped DHL reduce facility and software maintenance
costs and increased agent productivity and effectiveness.
63% reduction in call volume with self-service channels and automation (Read more)
UPS engaged its customers digitally with effortless self-service options. Customers can track package delivery, coordinate
alternate arrangements such as pickup at the store, route to different locations, make payments, or upload documents. This is a
perfect example of proactive customer service with an easy option to connect with the contact centre.
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04 | Transforming the Connected Network Experience
Logistics providers address global supply chain needs. As a result, the cost of the network that underpins all digital programmes,
including the Connected Customer initiatives, cannot be separated from the overall cost to serve discussion.
A key enabler of the Connected Customer Experience is instant data availability from multiple sources for contact centre
agents and other customer interaction systems. This requires a network that can transport data from diverse sources and offer
a platform for seamless, high-quality customer interactions. But with each passing year, the cost of these networks grows at a
rapid pace.
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4.2 | Primary cost pressures on logistics service providers
There are four types of cost pressures that logistics companies must manage when it comes to their networks.
According to GlobalData, the cost of most network media, from SD-WAN to Managed Network Services, is poised to grow at a
CAGR of 8% until 2027. This means that technology leaders must strive to optimise their architecture and procurement strategies
to stay ahead of the cost curve.
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Source: GlobalData, 2023
2 | The rising cost of cyberattacks
With the rapidly expanding digital estate, cyber risks are higher than
ever. And these cybersecurity events are expensive. According to
IBM’s Cost of a Data Breach Report 20235, the cost per data breach
in the transportation industry increased from USD 3.59 mn in 2022
to USD 4.18 mn in 2023, owing to the highly connected nature of the
sector and growing digitisation.
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IBM’s Cost of a Data Breach Report 2023
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3 | Opportunity costs of unplanned 4 | Increasing costs of digital transformation
downtime initiatives
In a digital-first world, every step of the logistics The supply chain and transportation industry is
value chain is powered by technology – from at the forefront of adopting digital initiatives to
booking orders shipments and generating airway drive business transformation. According to the
bills to tracking shipments, providing customer Global Market Intelligence’s Supply Chain Digital
updates, and generating invoices needed for Transformation Enterprise Survey 20236, digital
customs and other authorities. And when parts of transformation initiatives aim to address critical
the digital estate are unavailable, the business is business problems like delivery delays (46%) and fuel
as good as being shut down. costs (39%). The former has a direct impact on CX
and brand image, while the latter directly impacts
For example, Amazon’s warehouse operations the bottom line and is an important contributor
in the US were halted in December 2021 when to meeting service providers’ ESG goals and
an AWS outage resulted in e-commerce giant’s commitment.
logistics network going down, making processing
and shipping orders in much of the US impossible These mission-critical and capital-intensive initiatives
during the run-up to Christmas. (Source) depend on a secure, performant, highly reliable, cost-
effective network.
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Global Market Intelligence’s Supply Chain Digital
Transformation Enterprise Survey 2023
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05 | Hyperconnected Ecosystems powers Connected Experiences
Customers want a consistent experience across the board, no matter why or which channel they choose reach out. Businesses
must weave together different touchpoints and integrate multiple channels to build a Connected Customer Experience. This
necessitates that the entire ecosystem is hyperconnected to support immersive interactions involving customers, workforce,
partners, and the broader business ecosystem. Such an ecosystem can empower businesses to optimise their operations,
elevate customer experience and achieve competitive advantage.
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5.1 | Building blocks of a Hyperconnected Ecosystem
Connected Customers:
Connected Workforce:
Elevate customer experience across
Enable employees to work together
all touchpoints by interacting with
seamlessly and productively with
customers on their terms – anytime,
reduced digital friction.
anywhere, any channel.
So far, we have discussed how a positive customer experience can drive customer retention, satisfaction, and loyalty. Let us dive
deep into strategies logistics providers can adopt to achieve success in customer experience.
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5.2.1 | Omnichannel communications with a Cloud Communication Platforms
Customer Interaction Suite: (CPaaS):
With Tata Communications CX can be transformed by Customers don’t have to reach out to contact
unifying all marketing and sales engagements, support centres every time if they have or can obtain
operations and customer journey workflows under a single the information they need via alternate methods
Customer Interaction Suite (CIS). Customers seek prompt like SMS, OTT apps like WhatsApp. Tata
issue resolution through their preferred channels. Whether Communications DIGO, a CPaaS platform provides
it is delivery notification, cross-selling, or reward/loyalty the necessary tools to run and manage omnichannel
programmes on a channel they love, every touch point campaigns centred around mobile communications
becomes a driver of CX and brand impressions. There are tools. It slo offers programmable voice services and
two elements to Tata Communications CIS: enables contextual customer intereactions. This
ensures that customers have instant access to the
information and services they need while optimising
Cloud Contact Centres: contact centre usage by reducing the total call
volumes.
Tata Communications InstaCCTM harnesses
the power of world class contact centre
solutions to enable quick, contextual contact
centre interactions with customers. With tight
integration with CRM and omnichannel capability
(with voice, video, email, and chat support)
logistics providers can combine data from
multiple sources and provide the agent with
the information needed to provide definitive,
personalised interaction.
Orders – Appointments – Payments – FAQs – Notifications – Surveys – WisMO – Balances – Offers – Changes - Fraud
5.2.3 | In-app calling for delivery communication: Integrating in-app calling features into enterprise
applications can make your customer experience seamless. Modern APIs offer functionalities beyond fundamental voice calling
within the application, eliminating the need for a customer to exit the application for support. It also builds trust with customers
that calls are genuine, and improves cost-efficiency and call quality, thereby boosting customer satisfaction.
5.2.4 | Customer service chatbots: These can be highly effective solutions to handle a high volume of customer
enquiries at once. Some of the top uses cases are: With chatbots, you can reduce the number of customer service
representatives that need to be hired and trained, resulting in significant cost savings. Chatbots can help in.
- Acropolium
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5.2.5 | Supercharge your agent productivity
With high call volumes, impatient customers and learning curves with new technology, it’s easy for agent productivity
to fall sometimes. Here are a few strategies on how you can empower your agents to transform operations and drive
substantial improvements:
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5.3 | Creating cost efficiencies in the Connected Network Experience
There are three ways in which networks can be made cost-efficient.
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5.3.2 | Integrating network and security approaches
Taking an integrated view of network and security enables a holistic approach to network security and greater
cost optimisation. Here are some examples.
• As per a survey by OMDIA, companies pursued SDWAN/SSE/SASE with an aim to reduce networking costs (42%)
and add more security control (35%).
• According to Forrester’s The Total Economic Impact™ study, a large enterprise implementing SASE can expect
composite benefits of USD 5 mn over three years and an ROI of 218%. Here are the per site reductions due to
SASE:
• USD 17,300: Transitioning to network and security appliance and dual broadband connectivity.
• USD 18,300: On technology equipment costs like routers, WAN optimisers etc.
• USD 13,500: On labour costs.
• Annual savings of USD 120,000 due to the reduced risk of a material security breach.
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5.3.3 | Vendor consolidation
Having multiple vendors perform similar statements of work across different geographies or points in the network
stack is often the result of legacy decisions reflecting a ground reality that may no longer exist. In a world of global
suppliers, logistics firms can evaluate consolidating vendors across geographies and adjacent network and security
stacks.
Here are some of the ways in which vendor consolidation can help optimise costs:
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06 | Conclusion
The rise of new technologies and changing customer behaviour means that logistics
and supply chain leaders must reinvent their customer experience strategy, as
demonstrated through various use cases above.
We are passionate about helping you to provide a world-class experience for your
customers. We have an established track record of helping enterprises improve
CSAT while reducing costs.
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Let’s Connect:
About Tata Communications
Tata Communications is a leading global digital ecosystem enabler
that powers today’s fast-growing digital economy. The company’s
customers represent 300 of the Fortune 500 whose digital
transformation journeys are enabled by its portfolio of integrated,
globally managed service that deliver local customer experiences.
Through its network, cloud, mobility, Internet of Things (IoT),
collaboration and security services, Tata Communications carries
around 30 per cent of the world’s internet routes. It connects
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how our team can help you
reimagine every step of the logistics
experience.