August 4, 2020

Choosing the Right Freight Forwarding Software for Your Logistics Startup Business

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @
Best Transportation Logistics Software - Best Freight Forwarding Software - Best Freight Management Software - Cargologik

Managing a logistics startup business has never been easy. It often takes years of hard work, dedication, and consistency to win the loyal client base required to succeed in the longer term.  The world economy, trade wars, pandemics, new competition from digital players, as well as liners getting back into logistics, launching a successful shipping business has become exponentially more difficult.

 It reflects a complex process that must connect with hundreds of possible third-parties and logistics service providers (LSP’s). At the same time, every organization wants more digital capabilities and technology. 

The shortfalls within the type of freight forwarding software used in your business may even negatively impact contribute to the failure of your venture if not implemented correctly. 

As a result, all digital logistics startup businesses, particularly freight forwarders, need to know a few things about using the right freight forwarding software:

1. Evaluate Your Business Needs

Evaluating your business needs is a common principle for any organization that seeks out a new partnership. 

According to Supply & Demand Chain Executive, “The first step in selecting the best matching forwarding service for your business is to define what your needs are. Determine the types of services you would like to have, the modes of transportation and the average volume of shipments. This basic information is crucial for your selection.”

Evaluating your needs should also include a strategic analysis of where your business is now, and where you want it to go.  And from that end-goal in mind, working backwards to outline the activities, projects, and stakeholders coupled with the specific metrics you want to strive for. (ex. improving quote win-rate, reducing overhead)

2. Secure Shareholder Support for Automation

The next step to successful freight forwarding software selection, lies in securing shareholder support for automation. We’re not talking no-human-required automation but rather, improving your people and their skills with the right technology. Technology that cuts down on waste, drives productivity, and saves cost.

These advanced functions allow for a massive increase in self-service capabilities for your customers. In other words, you enable your clients and empower them with tech, that in-turn frees up your own operational time.  So you can start thinking more strategically and focusing those free time and efforts elsewhere.  Not another “hey-where-is-my-cargo” text.  Your operations team can spend less time worrying about manual quoting and more time managing bookings and increasing profitability.  

3. Create Your Shortlist and be Realistic About your Needs

Using the list of key capabilities needed within the forwarding software, create a shortlist of possible software vendors. This list can include up to 10 key vendors, but we generally recommend vetting just three to five. The level of review and analysis that you do, should match up with the size and complexity of your organization and those associated needs. 

Built a list of the needs you need – not to be confused with those that you want. Document & gather key info such as potential costs and implementation time.  After just a few conversations, you should be able obtain a better understanding of what the current market vendors can do today, and what is within the realm of possibilities.  Startups also make a great choice for smaller organizations who are unafraid of tech.

We suggest that you avoid being too free with the shortlist too. Stick to your core needs.  After all, failure to recognize the top-performing from low-performing vendors during this phase will complicate, delay, and confuse your team working on the project.  

In his 2016 annual shareholder letter, Bezos explicitly took time to share his approach to decision-making at giant Amazon:

“Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases, you’re probably being slow.” (Inc. 2020)

4. Request Demonstrations of Available Freight Forwarding Software

Request demonstrations from the shortlist of forwarding software vendors and be weary of those that take too long to get back to you.  It’s 2020 – you should be able to at very least see the product you’re going to be paying for.

Most organizations offer some sort of demonstration without requiring payment to help your organization better understand potential gains. If not, ask them why, and mark that down on your assessment list. 

In addition, some companies may offer Beta access, so your company can see the real improvements and opportunities to drive efficiency within the software and scale operations.

5. Submit RFP to the Top Software Vendors

After conducting trials to test drive forwarding software, it is time to submit your request for proposal (RFP) to the top forwarding software vendors. This is where the real legwork of software selection and implementation begins. 

It is important to consider the implementation timeline, total landed cost for the system, cost of maintaining the system, modifications necessary to implement the system, adoption time and change management process, and time to return on investment. 

Furthermore, organizations should ask questions and work with software vendors to understand exactly what to expect during implementation. This is the only way to avoid software TCO growing out of control. And whatever you consider, do not pay for any lifetime licenses – those very rarely maintain utility and will be disrupted relatively soon by new entrants. The future of all software is SaaS.

6. Track Performance of the Software

Regardless of the type of software or vendor used, it is important to track performance. Performance measurement is a key defining characteristic of successful supply chain management systems and platforms. 

In today’s world, the use of analytics and key performance indicators (KPIs) are an absolute necessity. Lacking access to data and insights into the performance of the software opens the door to risk and leaves your company in the dark. 

Conversely, businesses need to understand their costs and then operate better as a result to preserve profitability. More access to data and actionable insights allows organizations to maximize profitability of freight forwarding software and eliminate additional inefficiencies.

The need to eliminate such efficiencies is even more important due to the COVID 19 pandemic. 

According to John Koetsier via Forbes, “COVID-19 has massively accelerated the growth of e-commerce, according to an Adobe report released today. Total online spending in May hit $82.5 billion, up 77% year-over-year.” 

This unprecedented growth in e-commerce transcends all industries. For industries that have seen a slight decrease in demand throughout the pandemic, such as apparel, growth is still strong. Apparel purchases are up 12%, and this is despite more people working from home. Pricing is changing in tandem. Grocery prices have risen 4% in May 2020 compared to May 2019. 

Regardless, it all points to a universal need for more transparency, insights and analytics, cost savings in the supply chain, and more efficient processes. The right forwarding software can make or break your business for those reasons.

Grow Your Logistics Startup With the Right Forwarding Software

The state of the global supply chain is changing in profound ways. Economies remain uncertain. The U.S. election is on the horizon. And the ongoing demands of e-commerce are growing faster than ever. 

Now is the time to rethink your use of forwarding software. Find out more about the value of the right freight forwarding software by signing up for beta access today.

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

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