“…a breakthrough in transportation management systems portends to bring freight intelligence to the business masses for the first time”, says Dan Clark of Supply and Demand Chain Executive.
“So what?”, you might ask. The answer lies in the potential for speed, simplification, transparency, ease of management and cost savings for companies who regularly ship goods. The good news for shippers is that the technologies that are rapidly improving freight forwarding systems and logistics management effectiveness continually evolve, driven by the backdrop of an emerging on-demand economy and the increasing inter-connectedness of supply chains.
The perceived complexity and costs of international transport and logistics management has meant that companies seeking to expand have traditionally sought to outsource their shipping, which has not always proved as efficient as expected.
Business leaders have as a result been obliged to absorb a greater level of risk, by depending upon a freight forwarding system that has lacked the technological systems to make it as effective as it could be and has often led to significant financial losses to companies at a sensitive point of business expansion. Whether their suppliers have recommended inappropriate transportation modes, had shortfalls in their administrative systems, leading to border control cost hikes and delays, or other issues, the lack of control and transparency of a specialist freight industry has been a cause of tension.
The larger corporations have had resources to build in vertical solutions to develop freight management in-house, but the SME’s have been left to drown in inefficient and faulty administrative systems, clunky at best, losing millions at worst, where lack of compliance has led to regulatory penalties.
Suffice to say that pressure from outsources, together with the emergence of aggregation software in transport, such as Uber, has driven the T&L industry to up its game and invest in hardware, such as GPS and freight forwarding software that gives more control to customers, by making technologically enhanced freight brokerages and supply chain managers more accountable. The availability of data and metrics reporting through transport management systems (TMS) has allowed for greater insight into where ‘the rubber hits the road’ and increased demand from clients to cut costs and identify efficiencies.
Whether shippers choose to invest in TMS software to bring some operations in house or not no longer matters. Companies can simply plan in vertical integration for the future with the technology available, or outsource logistics management with greater confidence and control, benefitting from free to download apps that allow them to track and monitor their goods in transit. Furthermore, upon shipment arrival, customers can also rate their customer experience, which is obliging freight management companies to improve performance across all transport modes and ancillary services, such as invoicing, documentation processing and data sharing.
To fully grasp the impact technology is having in freight shipping, however, it’s helpful to compare the industry’s evolution to similar cases, such as ride-hailing services, where now passengers have greater choice and control over whom they choose to transport them across the city and associated ride costs. Technical transformation has also allowed the owner-driver to earn a living from what might have been an otherwise idle asset – their car.
Shippers Seeing Further and Reaching Deeper
Similarly, those companies already involved in freight management can now invest modestly in modular software systems that help them integrate existing transportation data more effectively into other business operations, such as procurement and customer service, but also expand their vision into aspects of freight systems they had little or patch insight into previously.
When outsourcing transportation to freight brokerages and freight forwarders, there is no longer any need to waste time trawling through brochures or websites of service providers, or pay exorbitant agency fees, because free to use apps allow shippers to compare supply chains and freight rates.
How Freight Systems are Getting Smarter
The more shippers, brokerages and freight management companies use such specialised software, the smarter this machine intelligence is becoming, aiding improved decision making, through anticipatory capacity, based on a wealth of historical data. Demand prediction and resource planning is where freight forwarders will gain competitive edge in the future. Indeed, it is reasonable to assume that an intelligent freight forwarding system will no longer be a ‘nice to have for the industry, but an essential for business longevity.