Four Ways Technology Helps Freight Forwarders Reduce Risk
Freight forwarders and NVOCCs face a lot of every day risks in their business that technology can easily solve. Many of them are the result of exposure to the routine challenge of managing the complexities of global shipping – like rate management, responding to RFQs, and general competition in the market place.
Still, many companies are slow to adopt technology solutions that help overcome these types of challenges. The failure of companies to keep up in this way is a mistake – here are four ways technology enables freight forwarders to reduce key risks in their business, and for their customers.
A forwarder’s entire business is based on the process of buying transportation services at one rate, and selling it to their customers at a higher rate. The difference in these costs is how they make money – period, end of story. Yet, many forwarders have no automated way to ensure accuracy with their freight rates and have no idea of their own cost basis.
Calculating global freight rates is a complicated process, and subject to GRIs, surcharges, and countless other fees that are constantly changing. Lacking freight rate management technology, calculating the cost basis for a forwarder is impossible. This creates risk and makes every quote a potential money-loser.
Every global shipment involves a lot of coordination – with things like paperwork, sailing schedules, origins, local carrier partners, and countless other details. Lacking access to any of this information, like sailing schedules or the ability to verify space on a particular ship, leaves customers at risk to missing the specific sailing they were counting on to meet their own service commitments for deliveries. Technology makes it possible for providers to verify this type of information for shipments and ensure they’ll make their customer’s expected delivery time.
Every shipment involves a lot of important decisions – like what carrier to use and what mode. But primarily it’s about balancing the cost and service requirements to get the best of both. Yet, lacking technology to support decision making, there is risk of failing to meet the either. The choices are always complex – with hundreds of options for even the simplest international shipment. Technology is the ONLY way to support decision making that will reduce the risk of bad routing choices by guaranteeing the best choice is made for every shipment.
Technology also lowers risk of losing business by enabling forwarders to provide better service to customers. Real time connections to carriers allows more up to date track and track, for example. API and EDI connections reduce the reliance on phone calls and emails for load status updates. Technology can even make the documentation and customs clearance process smoother by digitizing much of the required paperwork and information. In the end, forwarders are able to provide a more reliable and positive customer experience when they are supported by technology.
It’s the freight forwarders that embrace technology adoption like freight forwarding software that lead the industry. Logistics technology shouldn’t be thought of as a ‘nice to have’ – it’s integral to any forwarder’s operations and key in reducing risk for the business, and their customers.