Digital Freight

freight rates digitization quotiss

How to Digitize Freight Rates?

The digitalization of freight and online freight rates are among the most popular topics in the industry media. Many startups are set for industry disruption, and many investors support the trend with millions of dollars in venture capital.

Here are three facts that are commonly known:

  • The shipping industry is very important, yet traditional, manual and complex;
  • Hotels, tickets, taxis are online, but freight is not (despite numerous attempts);
  • The technology for online booking or price comparison has been available for many years.

Freight forwarding looks like a perfect industry for disruption! A cohort of digital freight forwarders and freight marketplaces emerged on the market. Their value proposition can be summarized as Booking.com for shipping. And yet, today in 2017, it is still hardly possible to find and compare freight rates online. Although some digital freight platforms enable online bookings, there is still a lot of manual work behind the digital interface.

 

The Complexity of Freight Rates

 

It’s never been easy to deal with freight, due to the freight rate complexity and volatility. Looking at the whole end to end process, it seems logical that transportation price consists of multiple components because the cargo literally travels half of the globe one way. Adding all transportation costs into the picture (door delivery, customs, port expenses), makes ALL-IN freight rate calculation a very complicated process.

Let’s look at a typical ocean shipment example – a container with shoes is shipped from a factory near Beijing, China to a warehouse in Warsaw, Poland.

A freight forwarder has to organize the following:

  1. Container depot in Beijing, China – releases empty container to the exporter;
  2. A trucking company in China – picks up the empty container and delivers to the factory
  3. Shoe manufacturer in Beijing, China – loads goods in a container;
  4. A trucking company in China – delivers the container to the port;
  5. Customs office in Xingang, China – inspects and seals the container;
  6. Port of Xingang, China – loads container on the ship;
  7. Ocean shipping line – delivers container from China to Poland;
  8. Port of Gdańsk, Poland – discharges container from the ship;
  9. Customs office in Gdańsk, Poland – inspects and clears the container;
  10. Railway operator in Poland – delivers container from the port to Inland Depot;
  11. Inland Depot in Poland – releases container to the importer;
  12. A trucking company in Poland – delivers the container to the importer;
  13. Importer in Warsaw, Poland – receives and unloads container;
  14. A trucking company in Poland – delivers the empty container to the Inland Depot.

After adding here also banks and insurance of the goods, we end up with a minimum of 16 interactions between 14 different business parties, including the state-regulated ones. All these parties are mostly independent entities, not connected to each other. For the industry digitalization to happen, all these parties must be digitally linked into one smooth supply chain, globally.

 

Booking.com for Shipping

 

Coming back to the ‘Booking.com for shipping’ analogy: hotel booking platforms connect the property owners with travelers. Travelers book online and don’t negotiate. This analogy from the B2C model can’t work for the B2B business world.

The ‘travel agency‘ analogy would be more suitable here but still offers its limitations. Travel agencies negotiate deals with suppliers, but the client of the travel agency is again a traveler (B2C). For freight forwarders, both their suppliers and their customers are B2B companies. And their customers’ customers are B2B companies. Hotel or ticket booking doesn’t remotely compare to the freight transportation in terms of complexity.

For decades, traditional freight forwarders took care of complex logistics and supply chain management. They have connections to the suppliers, agents, customs, and they take care of the entire shipment process, including that cargo insurance. The human factor plays a big role in this mostly relationship-driven business.

Traditional players are faced with a tough trend – strong demand from the market for simplification and digitization. But even the most advanced digital freight forwarders have to employ a large team in their back office, who has to deal with the complexity of the actual logistics.

 

Digital Solution for the Industry

 

At Quotiss, we recognize that the demand for digitalization is, in fact, demand for simplification and efficiency. The technology itself can’t fix the broken process. Quotiss software has a smart algorithm, which simplifies freight rate management and automates the quoting of freight rates. Quotiss software helps traditional freight forwarders to become digital.

Click here to register your company. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight from Quotiss on the same day we sign the deal.

freight ratesheets quotiss

Freight Ratesheets. Simplified.

It’s not a secret, that when it comes to shipping and logistics, there is a lot of potential for optimization. Freight forwarders have to deal with the enormous complexity of the freight ratesheets they receive from their suppliers. Most of the freight quote requests are still handled via email in MS Excel, Word, or even a Whatsapp text. There are no unified standards in the industry.

There are approximately 50 000 freight forwarders in the world. They buy transportation services from various suppliers and sell it to shippers, adding more value to the supply chain by taking care of the full delivery. It’s also not a secret, that it’s hard to find freight rates online, and the attempts to digitize freight rates have failed.

 

Freight Ratesheets in Container Shipping

 

Let’s take container shipping as an example. The vicious circle of every freight forwarder: request freight quote from a shipping line, deal with the horrifying complexity of rate sheets of multiple shipping lines, manually retype rates and surcharges into own format, repeat for every quote.

According to the Shanghai Container Freight Index, spot rates change at least once a week, adding up to 50 rate revisions per year. Let’s assume that a typical freight forwarder

  • works with 5 shipping lines and on 4 trades;
  • receives 4 rate sheets weekly from each line for each trade.

Now we do the math: 50 000 freight forwarders x 50 revisions x 5 shipping lines x 4 ratesheets = 50M. That’s 50 million Excel or PDF files with complex rate structures that are produced and emailed back and forth every year. This looks like the definition of inefficiency, as most of it is done manually.

These rate sheets come in various formats, currencies, frequencies, colors, and shades. Even within one shipping company, formats vary from branch to branch. These Excel-based structures are extremely complicated to understand even for logistics experts, which makes further freight rate analysis time-consuming and error-prone.


(An example of a typical rate sheet from one of the shipping lines)

Freight forwarders spend their days analyzing the freight ratesheets and quoting freight rates for their clients. Even the largest global freight forwarding companies struggle to set up an electronic exchange of rates or at least negotiate a consistent format of ratesheets with the shipping lines.

According to Quotiss statistics, it takes freight forwarders up to 24 hours to prepare a freight quote, 10% of sent quotes contain manual errors, costing the industry 10 billion USD in lost revenue.

 

Rate Management Software for Logistics

 

There are talks about disruption, innovation, and digitization in the supply chain industry. Freight forwarders get access to more and more digital tools each year. There is a big interest in digitizing the customer interface: offer online freight quotes, online bookings, online tracking, etc. All these customer-facing digital initiatives are very necessary, but hardly possible without digitizing the back office of the freight forwarder.

It would be great if digital freight tools could help to quote freight rates instantly or to shop for the best freight quote online. The truth is, it will only be possible when the freight pricing structure is simplified and unified across the industry.

It is necessary to start from the basics – automate and digitize your freight rate management internally, and after that integrate your automated freight quotes online.

Quotiss software could be the right solution to digitize freight ratesheets using a simplified upload mechanism. Quotiss is a practical tool, which automates all kinds of freight ratesheets in a smart and simple way. All freight rates from all suppliers in one place, available instantly to everyone in the organization.

With Quotiss, you can increase your sales productivity without increasing headcount. When your business is driven by efficiency, it directly impacts the company’s bottom line.

 

Would You Like a Quick Start with Quotiss?

 

Click here to register your company. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight from Quotiss on the same day we sign the deal.

Freight forwarder tools Quotiss

Freight Forwarders Deserve Better Tools

The most popular computer software in all freight forwarding companies around the world is undoubtedly Microsoft Excel. Released in 1985, Excel became a superstar tool, helping businesses become more efficient. Its advanced formulas turned manual processes that took weeks to complete into something that takes only a few hours.

Today, the situation has changed. In the world where Pokemons run free on the streets and hundreds of companies are created every minute, MS Excel just can’t keep up with the flow. In fact, Forbes named it the most dangerous software in 2013.

So why is it the most popular software?

 

You Can Do Anything with Excel Spreadsheets, Can’t You?

 

The freight industry has been married to Excel for more than 30 years. And MS Excel is still great at what it does – it’s simple, flexible, powerful, and cheap. But then, it suffers from some serious limitations:

  1. No collaboration: Excel lacks multi-user collaboration support. It’s difficult to share a spreadsheet among many team members. Excel might be fine for the freight rate management when you have ten customers. It’s when you start getting massive amounts of freight ratesheets that everything falls apart.
  1. Manual errors: Spreadsheets are error-prone and insecure. One incorrectly entered piece of data could spawn a domino effect and cause all sorts of serious problems. Nearly 90% of spreadsheets contain errors. No wonder that every 10th invoice in shipping is disputed, because of the wrong freight rates calculations.
  1. Unprofessional look: You are the professional in your business, and your clients expect that you present yourself professionally. A freight quote is a presentation of your company, your brand and your services. Excel spreadsheets lack a corporate look and feel and look unprofessional when shared with clients (even with a logo on top).
  1. Loss of data: There is a big risk in relying on an Excel file. Since Excel is a ‘standard tool’, business managers don’t consider the need for security in the same way as they would with other data. Also, consider the potential loss of knowledge. The single person who understands how the freight rate spreadsheet was put together and holds full control over it is a potential risk too.
  1. Spreadsheets multiply: Excel files tend to multiply. Logistics managers usually have their folders full of different versions of the same data. Users often copy data from one spreadsheet into another, rename, add some macros. The moment you consider deploying an MS Access database means that you’ve reached your critical mass of data that is impossible to navigate and analyze.
  1. No real-time analytics: Excel is best at analyzing historical data and is not great at doing real-time analysis. Usually, the decision-makers put too much trust in Excel data, even when there is no evidence that it is correct. In other words, people believe what spreadsheets say, even when spreadsheets are wrong.

 

Freight Forwarders Deserve Better Tools

 

Clearly, MS Excel has become obsolete as a freight rate management and sales automation tool and should be replaced with a proper freight rate management software designed for freight forwarding. Sooner or later, every forwarder will be using proper software – the digitization is inevitable.

Many still use Excel because it doesn’t hurt bad enough yet, or they had a bad experience with a previous solution.

Now it’s the right time to give it another try.

By switching from Excel to Quotiss software, you can automate the sales activities and get access to the sales performance analysis, in real-time. There will no longer be a need to manage a number of complex freight ratesheets in Excel. Most importantly, your commercial data will stay secure!

Freight rate management quotiss

Would You Like a Quick Start with Quotiss?

 

Click here to register your company. We’ll activate your company’s profile and help with the initial settings and user onboarding. You can start uploading your freight ratesheets and quoting freight from Quotiss on the same day we sign the deal.