Logistics technology provider Freightos published an annual report on the state of the logistics market. The survey found that industry is still not benefiting from technology – over sixty percent of forwarders and carriers are not able to provide instant quotes. Traditional companies are still using spreadsheets and ERP systems to generate quotes manually.
Why traditional forwarders are still hesitant to invest in digital solutions? What are the benefits of using freight forwarding system?
Customer experience is becoming more and more important
Due to growing competition, logistics companies should be able to prepare and send quotes instantly. But top logistics players have been stuck in the analog age and the average time between sending an inquiry and receiving a quote is 5-6 days. This is an opportunity for dynamic companies that want to implement freight forwarding system.
Fast service is one of the most important factors affecting customer experience. Modern technological solutions allow to take relationships with existing customers to a higher level. They also allow to successfully acquire new ones.
Increased profitability and reduced risk
The use of freight rate management software also has an impact on the profitability of a logistics company. Thanks to the software, companies have the ability to manage freight rates and local charges on an ongoing basis. They can control margins in real time and increase invoicing accuracy. This is particularly important in the case of dynamic rate changes.
Using a freight rate management software is also a great way to reduce operational risk. Most errors in the freight quotes area are due to manual errors of employees. The right software allows to significantly reduce the probability of mistakes. It also provides the opportunity to better control the work of the sales team, which further reduces the level of risk in the company.
Market situation is changing slowly
Why are forwarders not interested in implementing new technologies? Mainly because they don’t know if the investments will be profitable. Market digitalization is very slow. Only one-third of the largest forwarders provide customers with the opportunity to receive an instant quote. Others still generate offers manually using spreadsheets. This is inefficient and time consuming.
But the situation is slowly changing and the industry is finally starting to embrace digitization. Mainly due to the emergence of new players who focus on implementing modern enabling technologies. Some of these acts as digital freight forwarders, aiming to replace splace traditional logistic companies by using software to manage full freight shipping process for their clients. Others focus on fast quotation systems.
Companies that resign from new technological solutions will finally lose their market share. New players will have competitive advantages that will enable them to serve customers much faster and more efficiently. They will also have greater operational efficiency. Which will allow them to achieve better visibility.
Nov 05, 2019