With digitalisation in full swing in the freight forwarding industry and customers demanding a better customer experience, forwarders find themselves reviewing their software strategy and the ability of their existing technology solutions to live up to evolving customer expectations. As investment in the global digital freight market increases, forwarders realise that failing to replace legacy systems comes at a higher cost than ever before. This opens the door to another question, whether a forwarder should build a fully customised solution, designed for its specific processes, or buy a ready-to-deploy, off-the-shelf solution.
This research paper provides an overview of the software solutions available on the market and outlines the different approaches forwarders can take to build their overall software capability, for instance pick and mix vs using end-to-end, integrated software suites.
The spectrum of forwarding-enabling software vendors has widened considerably in recent years, with some, focusing on providing forwarders with front-end customized solutions for customers, whilst others focusing more on back-end operational efficiency and visibility. The market map in this research paper analyses the entire spectrum of software categories that enable the digital capabilities of forwarders and identifies the key software vendors available in the freight forwarding market.
The risks of using legacy systems
The risks involved when using legacy freight forwarding systems are high. At a time when digitalisation is sweeping across the freight forwarding market, failing to evolve and innovate comes at a higher cost than ever before. Freight forwarders that still utilise legacy systems have limited visibility into what is happening across their network. When using legacy systems, as goods are moved from one destination to another, tracking becomes more difficult.
This lack of proper oversight and visibility inherent in legacy systems limits the forwarders’ ability to respond to market changes and customers’ demands. Consequently, failure to replace legacy systems results in low visibility, inconsistent analysis, and lack of a single source of truth.
For many freight forwarding companies, the main method of operating still involves printing paper and using outdated technology. Not only is this process time-consuming and prone to errors but it fails to meet customer requests for visibility and tracking. What is more, digital competitors as well as many industries that forwarders serve have already undergone digitalisation, so forwarders need to catch up to effectively deliver services that meet their customers’ expectations.
Benefits of freight forwarding software
Automation and increased productivity
Freight forwarding software automates processes such as data entry, quoting, analytics, billing and other accounting functions. By automating these tasks, freight forwarders can avoid costly errors and can focus on other elements of the business, such as expansion, relationship-building, and customer service. Ultimately, the automation of these tasks increases the productivity and operational efficiency of forwarders
Transparency and Visibility
Freight forwarding software gives forwarders enterprise-wide visibility and allow them to collaborate effectively across teams and markets and gain insights from data. Customers of forwarders benefit from reliable shipment visibility.
Operational and financial control
Software that provides analytics helps forwarders understand what is helping the bottom line and what is eating into profit so they can make the best decisions for the business. It allows forwarders to track shipping delivery speeds to understand what is causing delays and compare carriers’ performance to make the best choice for future shipments.
Automating tasks and processes through a software system allows real-time management of regulatory and customer compliance and helps drive down costs in the process, leading to cost savings. Data analytics and reporting can help forwarders keep costs in check and protect margins. All of these processes are conducive to reduced overall costs
Freight forwarding software can help smaller forwarders compete on a much more level playing field with large forwarders. For small and mid-sized forwarders that need to compete with larger players or their digital competitors, a freight forwarding software platform can deliver operational efficiency, much needed visibility and the agility needed to increase revenues and deliver better customer service.
Source: Transport Intelligence, May 20, 2021
Author: Viki Keckarovska
This brief has been taken from a larger paper, ‘Freight Forwarding Software: Market Map’ by Ti’ Senior Analyst, Viki Keckarovska. This paper is available exclusively to GSCi subscribers. Each week, Ti’s team of senior analysts and industry experts deliver analysis covering the latest logistics and supply chain trends exclusively to users of GSCi.
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