Finding the easiest way to save money is not always as simple for the small or mid-sized freight forwarder. Shippers often select their forwarders based on brand power and market penetration. The practice is common in business, and no different in freight, for managers, in this case, a logistics manager, to pick a partner that is well known and seems to have the necessary resources to serve the needs of the shipper. Despite smaller freight forwarders lacking the financial resources to directly compete with these brands in marketing and advertising, or the ability to state massive freight under management monetary values, there are opportunities for smaller forwarders to offer the same service levels as the bigger forwarders without having to build their own software and systems that traditionally accompany the bigger brand names and their budgets.
The forwarders that follow these small and mid-sized freight forwarding best practices will compete with bigger forwarders at the same level of service. This is accomplished by utilizing available SaaS platforms offered by companies, like CargoLogik, who focus on giving affordable tools specifically for freight forwarders. These tools help narrow the gap and generate new revenue.
Here are 10 tips to help smaller forwarders improve that drive better customer service for their clients – and lower their operating costs at the same time.
1. Take Advantage of Self-Reporting Systems
Self-reporting systems eliminate the traditional, costly overhead tied to the hassle of manual reporting by helping the forwarding team to stay on the same page. Also, self-reporting systems give way to business intelligence tools, business alerts, and reducing delays with metrics to track performance.
2. Integrate Your Freight Forwarding Systems With Major Carrier Portals
Integration between systems is another of the top freight forwarding best practices. Integration reduces the risk of lost data. In addition, integration via an API gives smaller freight forwarders an opportunity to quote a shipment across modes and eliminate the manual processes of quoting freight for clients.
The State of Freight Management
3. Leverage Web-Based Platforms to Offer Lower, Competitive Pricing
Web-based platforms are inherently more affordable than on-site solutions and can also help forwarders shift more expenditures from CapEx to OpEx. Costs can be shared or funded by the shipper where the value to both parties exceeds the cost of the solution. SaaS platforms operate anywhere with a decent connection, a modern browser, and can give freight forwarders and their shippers the ability to better manage freight exceptions as they occur.
4. Use APIs to Rate & Quote Shipments Customers Need to Move
Fast and accurate rate quoting is paramount in freight forwarding. It is essential that small and mid-sized freight forwarders are able to quickly quote the shipments the shipper needs in a timely manner. As straightforward as getting a shipping quote sounds, at present, the quoting process is time-consuming and expensive with regard to traditional freight forwarding communication.
Think about the time it takes to place countless call hours and go back and forth with endless email threads simply to get a quote for shipments. The forwarder may finally get the quote back to the customer and by the time the customer accepts, the rate may have changed. Imagine going to the grocery store with a budget in mind and you couldn’t easily see the prices of the items you want to buy and then by the time you are ready, those prices change.
For forwarders, they have to manage this reality. For shippers, this is a sub-optimal experience in procuring space for their shipments that also wastes their resources. By eliminating more analog activities, and quoting shipments much faster by connecting a freight forwarding platform to carrier rates via API, freight forwarders can perform the same work in a fraction of the time. This provides the commercial team a structural competitive advantage to better compete.
5. Build Ongoing Relationships With Shippers and Carriers Through Data
Better rates amount to more shippers tendering freight via a forwarder. More volume from forwarders benefits carriers. As the cycle builds, independent freight forwarders achieve growth and better customer service levels. With more shipment data and the use of a platform to easily capture and, forwarders can conduct more data-driven contract negotiations with carriers. The forwarder is now a much better advocate for their shipper customers improving the long-term relationships with all involved.
6. Tap the Value of Real-Time Information
Getting real-time information, thanks to the use of the aforementioned APIs, is another opportunity for freight forwarders to collect and manage shipments for their customers. Instead of relying on manual status updates, utilizing a system powered by APIs, such as a freight forwarding management platform, can help provide real-time status at any stage of the shipping journey. This allows your customer to better manage their own customers.
7. Let Artificial Intelligence and Automation Handle Routine Work; Manage by Exception
Artificial intelligence and automation are hallmarks of effective supply chain management. Through software-as-a-service systems, small and mid-sized freight forwarders can finally compete and capitalize on their benefits. Modern software vendors already have the capability to deploy cloud-based systems and automation. Automated systems can handle routine work, such as quoting and scheduling freight for pickup, and those benefits translate into less “busy work for freight forwarders.” Thus, forwarders can focus on addressing more urgent matters, connecting with customers, increasing productivity, and saving money along the way.
8. Use Analytics to Understand Improvement Opportunities
Analytics provide an unbridled opportunity in the supply chain, and their use stands out as critical to all freight forwarding best practices. Different types of analytics exist, including descriptive, predictive and prescriptive analytics. They help freight forwarders understand what happened, what will happen and what must happen to achieve the desired outcome.
9. Consider the Influence of Risks for All Quotes
The growing globalization of the supply chain requires smaller freight forwarders to consider both local and global risks when making all decisions.
According to Supply Chain 24/7,
“As companies conduct business in more countries, and as countries continuously change their regulatory and customs-clearance processes, delays occur during document compliance assessment and processing.
Leading companies are leveraging several strategies to respond to the complexity of global logistics management in an effort to reduce transportation costs and improve service levels while still focusing on the ‘buy anywhere, sell everywhere’ business model.”
10. Take Advantage of Software Vendor-Provided Training Resources to Maximize Return of Digital Freight Forwarding Investments
Taking advantage of additional training for software from vendors will help your team realize better use of the system and improve overall communications between the forwarder and their customers thanks to the integrated freight communications platform. Moreover, better training enhances ROI timelines. As employees use the system to boost understanding and productivity, profit margins increase. Therefore, the time to payback for investment decreases.
Augment Your Freight Forwarding Processes With Better, Digital Systems Now
The top freight forwarding best practices provide a boost of improvement for small and mid-sized freight forwarders. By following these practices, freight forwarders arrive at a single path forward; they must invest in a digital freight forwarding system. CargoLogik can make it happen.
Visit CargoLogik online to join our private beta queue and to be a part of the next big thing for independent forwarders.