Adopting a Customer Driven Supply Chain Strategy in 2023

November 1, 2022

Traditional Freight forwarding process

The freight forwarding industry has a reputation for being conservative and is not known to be a pioneer when it comes to adopting new technologies or evolving its way of working.

Globally, freight forwarders generally follow the same process, with some differences on account of local practices and regulations.

Generally speaking, shipping companies and freight forwarders have a standardized way of working and relatively rigid processes, which their customers are expected to comply with in entirety. While this is largely attributable to the necessity of adhering to stringent international and national laws and governing maritime conventions, it is also indicative of a lack of customer centricity.

The pace of work is quite slow, leading to delays in responding to customers’ inquiries and resolving issues with shipments, which in turn prolongs end-to-end lead times.

This is in stark contrast with the demands of modern businesses, where companies like Amazon are endeavoring to make same-day delivery the norm, which translates into increased pressure on exporters and retailers to accelerate their supply chains.

Consequently, in the traditional freight forwarding process, the emphasis is on simply following decades-old ways of working rather than meeting customers’ expectations or designing innovative solutions to optimize customers’ business models. 

Issues faced by Customers and Exporters

The numerous lacunae prevalent in the freight forwarding industry’s way of working translate into a distinct disadvantage for exporters and shippers, eroding their competitiveness in the international market.

Some common challenges faced by exporters pertain to the following:

1) Slow quoting process/responses to pricing inquiries

An exporter usually requests a quote when he has an order in hand, and the cargo has to be dispatched immediately. This implies that he needs the rate quotation promptly to begin the delivery process.

Under the current manual process, however, forwarders can take up to 24 hours to provide the initial quote. Afterward, both parties will negotiate the price and terms of the quote, which can easily take up a few more days. By the time the rate is accepted and filed in the forwarders’ pricing systems, two to three days might have elapsed from the day of the inquiry, and only thereafter will the booking be confirmed and placed.

Additionally, the manual quoting process is quite tedious and beset by complexities, with the freight forwarder having to refer to numerous excel sheets, pdf files, word documents, emails from the transport vendor, and various websites. Also, various surcharges levied by shipping lines need to be added to the final quote. Human errors are, therefore, quite common, with the freight forwarders’ salesperson missing out on certain surcharges or quoting outdated rates.

Exporters bear the brunt of the slow processes and human errors, as their shipments are delayed, and they are liable to pay the revised rates or surcharges that are subsequently billed to them, which inevitably lead to invoicing disputes and probably loss of revenue.

 

2) End-to-End visibility of shipment status and alerts on various milestones

Modern supply chains stretch across countries and continents and are characterized by an immense degree of sophistication. Also, the inventory management principle of ‘Just in Time’ that is most commonly used across industries and countries lays emphasis on maintaining minimum inventory levels, wherefore it is crucial for both exporters and importers to be aware of the precise status and location of each shipment, with information on the date of delivery. It is also important that they be aware of potential delays or deviations from the planned movement, so they can plan accordingly and take appropriate remedial action.

Therefore, both exporters and importers emphasize end-to-end visibility of their shipment, with daily updates on the location and estimated delivery time. Also, in order to plan the pick-up, cargo handling, and inland transport of shipments, importers prefer receiving timely updates and pre-alerts on various milestones such as vessel arrival dates, discharge dates, empty container return dates, and other significant events.

Under the current process, exporters and importers generally do not have visibility of their shipment status, and updates are shared on an ad hoc and irregular basis.

3) Difficulties in collaborating with international customers and vendors

Globalization has meant that supply chains comprise multiple stakeholders from various countries, involving virtual and multicultural teams. Working across time zones and geographical locations gives rise to a unique set of challenges.

For example, if the freight forwarder is in India and has to liaise with the customers’ office in the US, the time zone difference will lead to an increase in response and coordination times. The Indian office will have to work until late at night to promptly respond to the US-based customer, which might not always be feasible.

4) Absence of a customer-focused approach

At a holistic level, the existing process lacks the customer-centricity and partnership mindset that is the hallmark of an industry that focuses on constant evolution to better meet customer requirements.

This is primarily manifested in the variable customer service levels and deteriorating customer satisfaction levels, which do not augur well for any freight forwarder operating in an ultra-competitive market.

 

Using Technology to overcome these challenges

While the shipping and freight forwarding industry always had masses of data at their disposal, it was stored in different sources and formats, making it difficult to consolidate, decipher and gain meaningful insights.

Today, we have Supply Chain Management platforms that access data from disparate sources, use sophisticated algorithms to analyze the data, and present insights and prescriptive solutions in a uniform format.

These technological solutions aim to reform the freight forwarding industry and bring about a paradigm shift in its mindset, moving away from following outdated procedures, and rigorously focusing on customer requirements and satisfaction.

Supply Chain platforms have identified the various pain points that exporters and customers experience and thereafter enabled freight forwarders to become more customer-driven.

Leveraging technology, freight forwarders are today able to provide quotes in a matter of minutes while ensuring that the final rate is accurate and valid. It is also possible to proactively share regular updates on shipment status and pre-alerts regarding various milestones in the delivery process.

The ultimate effect of this contemporary approach is an evolved way of working, where the Supply Chain is exclusively customer-centric and designed to complement the exporter’s business rather than merely providing basic transportation services.

 

How can Freightify help

Freightify is one of the market leaders in the field of Supply Chain Management platforms by virtue of its reliable and robust solutions, which offer a multitude of functionalities supplemented by an easy-to-use interface.

Freightify makes it possible for freight forwarders to be more customer-centric in the following ways:

  • Instant quotes: Where the traditional quoting process can take over two days, with Freightify, a salesperson can generate a quote with a few clicks on his smartphone and respond to customer inquiries immediately.

  • Accurate Rates: Freightify makes the manual pricing process redundant, as all applicable rates and surcharges are pre-fed into the system. This means that the rate retrieval process is automated and the rates quoted are accurate and valid.

  • Empowering customers by ensuring information available at their fingertips: Using a customer-driven platform allows the customer to log on to the system at their end and retrieve necessary information regarding rates, booking status, and various milestones. Due to this, the customer doesn’t have to wait for the forwarder to receive vital information, reducing customers’ dependency.

  • Shipment status visibility: Freightify’s ‘Track and Trace’ functionality enables the forwarder to provide automated pre-alerts and data on milestones to the customer. This proactive data sharing raises the bar in terms of customer excellence by pre-empting possible questions and providing requested data in advance. Armed with this data, the customer is able to optimize their supply chain planning.

 

To find out how your business can adopt a world-class supply chain platform to create customer-driven supply chain strategies, schedule a demo by clicking here.

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