July 26, 2020

4 Core Digital Freight Forwarder Collaboration Best Practices

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com

Digital communications and process management are not new topics in logistics and freight. Unfortunately, technology has often morphed into a major obstacle, getting in the way of reducing workflow complexity and improving productivity in the office.

As organizations move for more technology, they lose sight of how this technology increases value and reduces stressors on existing resources. 

In freight forwarding, the introduction of next-generation digital freight forwarder collaboration resources can help, but only if deployed and implemented holistically. This is a difficult feat for any company, let alone an independent freight forwarding or brokerage operation.

It is for this reason that, even as a tech company ourselves, we do not advocate technology for technology’s sake, as it can contribute to opportunities for loss in the longer term. As a result, it is imperative for organizations looking to increase digital freight forwarder collaboration to review their business models and to follow a few best practices to maximize value and achieve true digital transformation – or at very least, try to keep up!

1. Share Real-Time Data

The ability to share real-time data is incessant and reliant on the ability of the freight forwarding team to add value for customers – not the technology itself. 

In the digital age, everything can be accomplished without traditional freight forwarding channels.  This means that the only incentive for customers (shippers) to work with third-party forwarders is if such modern systems are in use. The forwarder doesnt need to have all the bells and whistles, but just enough to provide transparency, timely updates, and quicker response times.  It should also add structure and create efficiency.

After all, shippers also want to increase their own efficiency, profitability, and will always seek new tools to help reduce delays and create digital processes. 

These added-value sources for customers are further shown by McKinsey & Company in this graphic:

In a sense, digital freight forwarding collaboration focuses on isolating and expanding value sources for customers. Meaning that this is the type of key intelligence that shippers now demand.  These sources provide value regardless of whether they are business-to-business customers or direct-to-consumer clients. 

Value added services derive from the value sources at risk as illustrated in the graphic. By gathering more information, consolidating freight, aggregating info, sharing that info quickly, and effectively reducing the complexity in booking a complete shipment for the end user, costs decline.

2. Leverage APIs to Integrate Forwarder and Third-Party Systems Into One Platform

Achieving cost reductions further requires that digital freight forwarder collaboration resources leverage the latest technologies to share data. Sharing real-time data is the first step, but how do organizations achieve it? 

To answer that question, they need to look at the use of application programming interfaces (APIs) which overcome the traditional barriers to use associated with age-old EDI standard. By using APIs, organizations can unlock more scalability and avoid completely abandoning their existing software and processes.

As technologies continue to advance, it’s also important to consider how collaborative resources can use APIs to connect to new technologies. For example, blockchain is approaching maturity and readiness for deployment across supply chain processes. There are working concepts out there but it will still be some time before we start seeing widespread utility and adoption as these supply chains are fragmented – much like the blockchains available for transport. In order for the tech to become more functional, more adoption, and more interfaces to the tech are required.

It is valuable for its ability to virtually eliminate all sources of corruption and provide an immutable source of truth that all parties can access and view in a public ledger. The same narrative is described again and again across platforms focused on building in more digital freight forwarder collaboration. But ultimately, the greatest value lies in the ongoing development and implementation capacity through APIs to get out there to the masses.

For example, All Things Supply Chain reports:

“Blockchain could be used as an auditing tool. Timestamps and other mission-critical information can be entered into the ledger at every step of the journey and provide a comprehensive report that companies can study to improve their workflows, time in transit and regulatory compliance.”

It’s an endless opportunity for increasing traceability to provide peace of mind to forwarders’ customers.

3. Use Technologies to Effectively Lessen the Work of Securing Bookings

The application of technology further reduces the hassle of quoting and securing bookings. In turn, it creates more opportunities to build better forwarder-customer relationships—increasing growth potential and boosting company profitability.

The use of technology in managing freight forwarding is associated with a decrease in reducing total freight spend. As further explained by Deloitte:

“The transportation market is a backbone to a globalized world economy but with margins often highly volatile and under pressure. When it comes to the sub-segment of freight forwarding, a market growth of 8% can be observed (MarketWatch, 2018). There is continuous demand for low-cost shipping (given alone the rise of e-commerce across the globe), still high demand for integrated services, and an increasing trend of intermodal freight transportation (Allied Market Research, 2019). The economic potential that could be tapped with the use of a platform would thus be significant, and the player to implement THE central industry platform would impact the global transportation business extensively and profoundly. 

Equally, we observe that the freight forwarders’ suppliers, the carriers, have understood the digital game and actively integrate forward. Freight forwarders are an intermediary that impedes direct access to the customer. Nowadays, these interfaces are getting easier and easier to create, which may increase margins for carriers. One of the biggest carriers in ocean freight, Maersk, partners with Alibaba’s One Touch platform to allow shippers to directly book vessel capacity online and heavily invests in TWILL and DAMCO. Such approaches probably have the most potential with respect to full truck load shipping.”

4. Take Advantage of Automation-Guided Workflows That Reduce Work and Enhance Digital Freight Forwarder Collaboration

Automation and reduction of friction and lost resources remain the life force of digital freight forwarding collaboration resources. 

As reported by Boston Consulting Group, digital transformation of freight forwarding systems and automating manual processes is associated with the back-office in operations cost reductions of up to 40%. 

However, additional automation throughout an organization can also reduce related direct costs further – allowing freight forwarders to book more shipments, work with more carriers and shippers, follow through on customer service inquiries, and move freight. This level of automation has a natural implication for continuing to build digital freight forwarder collaboration throughout the supply chain by keeping everyone apprised of freight status and avoiding delays.

Put the Right Digital Freight Forwarding Collaboration Platform to Work by Choosing Cargologik

While these best practices sound great, they can be further streamlined by choosing a forwarding platform capable of making them all possible. 

Find out how to get started with your very own freight forwarding platform that can help you.  Find out how by signing up and requesting private beta access to Cargologik today.

To get the most out of our platform, book your free, personalized training call with our Success Team

Request a Demo

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