Collaboration in freight forwarding represents a significant opportunity to reduce costs and help small and mid-sized forwarding businesses grow. Unfortunately, the state of the market remains uncertain and the natural reaction is to retreat and focus only on core business. This is not always the case, especially in uncertain environments such as the ones they are dealing with today.
And often with that uncertainty, there are the players who succeed and those that do not. Small to medium-sized forwarding businesses ought to understand the real challenges they face and why freight forwarding collaborative infrastructure and system is essential to success – both now and into the future.
Challenges Faced in the Small to Medium Forwarding Business
The freight forwarding industry also generally faces more volatility and uncertainty than most forms of shipping and logistics. The biggest challenges affecting forwarders include:
- The rising costs of freight forwarding.
- Bunker fluctuations and surcharges.
- Seasonality of freight forwarding.
- Fees and service charges are billed after the fact.
- Limited container capacity and blank sailings.
- Economic shortages and failings.
Unfortunately, these problems are exacerbated when freight forwarders try to handle operations manually and work through bookings with email, text messages, and spreadsheets. Yes, in today’s age, email is the new form of snail-mail – and leads to higher costs and fewer bookings.
However, freight collaboration solutions hold the answer.
Freight Collaboration Solutions Make Everything Easier
Freight collaboration solutions allow freight forwarders to work from both within a single supply chain and with other freight forwarders to keep costs under control.
As explained by the Logistics Bureau, collaboration entails “upstream and downstream,” which means that within a single supply chain and “horizontal [collaboration], in which two enterprises with the same logistical role or requirement work together.
For instance, two manufacturers pool their purchasing to buy more services more cost-efficiently from the same logistics provider. Two freight forwarders might work together to achieve better geographical coverage by combining their two fleets and driver work-forces. Vertical and horizontal collaboration can also be mixed, as in business agreements between multiple shippers and carriers to reduce the overall movement of empty trucks and blanked sailings.”
Tips for Deploying Freight Collaboration Solutions to Save Time and Resources
The best way to deploy freight collaboration solutions lies within an end-to-end, connected platform, that delivers value to both the forwarder and their customers.
Instead of simply working with one or two carriers, see all carriers from a single digital resource that actively seeks out and finds possible new business relationships. This includes new opportunities to secure more shippers, gain visibility into processes, reduce communication clutter, and keep a proactive track of where goods are in transit at any time.
As explained in a prior post on digital transformation tips, digitized capabilities also have a natural implication for improved accounting, reduced stress in quoting and securing bookings, tracking accessorials to help keep clients’ costs under control, and more.
In fact, small and medium forwarding businesses ought to take these additional steps now:
- Know what your shippers want and need, using analytics to reduce lost opportunities.
- Creating a user website that allows your clients to easily access and review information, pay invoices, and more.
- Connecting with shipper platforms to reduce the need for multiple logins and hassle in quoting rates.
- Using high-value marketing to share information regarding rates and indices seamlessly with your clients and encourage more bookings.
- Simplify the freight forwarding booking process to reduce the time lost by clients.
Become a Stand-Out Forwarder With the Right Freight Collaboration Solutions’ Partner
Digital transformation is the new kid on the block in the freight forwarding industry.
As reported by Carlos Nicolas Fernandes via JOC.com, digital freight forwarding uses freight collaboration solutions to “adapt to the new world and resolve the innovator’s dilemma is by spinning off a smaller, separate organization that doesn’t have the burden of legacy systems, people, and processes and is able to put the customer above all else. Perhaps most importantly, they can operate autonomously. This new organization doesn’t need to worry about how their success might frustrate another department — they aren’t bound by juggling a bunch of unwieldy trade-offs. Instead, they report to one master — the market and the customers within it. Once the spin-off has reached critical mass, it can either continue to operate independently or be rolled back into the larger organization and seed a mindset transformation that permeates the parent company.”
Explore the way a digital collaborative forwarding resource can help by requesting Cargologik Beta-Access online today.