Automation & Digitalization

Automation and digitalization in freight forwarding

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.

The Dark Side of Process Improvement


“The light bulb wasn’t invented by continuously improving the candle…it was about understanding what the job to be done was and then stepping back to look for solutions to solve this”

You could spend lots of time and energy making a candle burn longer and brighter, but you would never get to a light bulb – it would always be a candle. At the same time if you don’t truly understand what the ‘job to be done’ is then you could waste time and resources improving processes not fit for purpose.

A really great point to reflect on. It reminds us how important it is to ensure that the technology is implemented to support the business, and not the other way around. In the end, it all boils down to this – does your current business process actually fit the needs of your customers?

 

Process Innovation vs Continuous Improvement

 

“At what point do you stop with continually improving and look for a new process or new innovation?”

Continuous Improvement is about observing the way things are done and improving them. Typically, there will be gains in efficiency or reductions in cost. Continuous improvement happens over time, bit by bit, and is never finished – with every change resulting in a small gain. The main focus is on improving of what is already in place.

Process Innovation puts the emphasis on solving each problem in the most effective way. Innovative changes tend to be big and disruptive, often reshaping or redefining the way things are done.

No improvement of a candle would result in a solution as effective as the light bulb. That requires an innovative shift in focus. But at the core, both process innovation and continuous improvement are intended to do the same thing – to help us achieve our goals more effectively. And although none of us would want to light our offices with candles, we wouldn’t want to use the early versions of the light bulbs either. An effective strategy for growth considers both: innovating and improving what’s already in place.

 

What Can Go Wrong?

 

The majority of the companies betting on the digital transformation ask themselves this question: “How can I organize my existing services/products better with the help of this new digital technology?” This is the wrong thing to ask when it comes to the digitalization of the business. The process usually begins with documenting all the existing ‘as is’ business processes and giving this to a software vendor to implement in their new solution or platform, and then expecting a different result. It puts the company at a high risk of re-inventing old problems in new technology.

Why aren’t companies taking the opportunity to digitize and improve at the same time? The most probable answer is that oftentimes digital vendors don’t have the slightest idea about their customers’ business needs, as well as have no interest in growing their customers’ bottom lines or market shares. Instead they have a large team of software engineers and project managers, who are very interested in growing their personal portfolio and digital tool kit.

 

How to Make it Right?

 

The best recommendation is to always ask ‘why’ and analyze every business process to see if it can be done better, before looking at any software product or solution.

The right questions to ask yourself before reaching out to any software vendor is this: “What are the real needs of my clients and their business? How can I understand their real (and constantly changing) needs better and how can I provide them with better fitting solutions with the help of digital technology?”

To build effective new business models and take advantage of digital technology, the companies need to agree on the strategic way forward, adopt new performance metrics, and rebuild their networks as well as their older processes (in fact, remove them).

The new economy has new building blocks: SaaS, APIs, big data, and improved customer experience – all based on well-designed business processes. Changing the way you think about your business and your business processes is the true key to success.

 

Quotiss sales automation software generates 100% accurate quotes in seconds. The software is user-friendly and tailored to the freight forwarding business. It brings order and structure.

 

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.

Logistics Software as a Service

The massive growth of startup communities all over the world is one of the global trends nowadays. Internet of Things (IoT), Big Data, robotics, artificial intelligence (AI), 3D printing, cloud technology – startups disrupting traditional businesses in ways no one could have ever predicted. It is happening now, and either you are aware of it or you are part of it (otherwise you would not be reading this).

Fully 80 percent of the products and services being consumed today are different from those that were being consumed five years ago. And five years from today, fully 80 percent of the products being used will be new and different from those being used today”, says Brian Tracy.

 

Logistics Software – a Product or a Service?

 

A product is a physical item that people purchase to own it. Once you own a product, you have all the rights to use it as you wish, until it finishes, breaks, gets lost, etc. A service, as The Economist defines it, is something that “you can’t drop on your foot” – which is technically not always true, think of all the digital products, like e-books, for example. Service is an economic activity between a provider of the service and a buyer, where a buyer does not get to exclusively own it.

Software is a non-typical example. It is a digital commodity, yet for years it’s been treated as a physical product. Corporate software license deals can cost millions of dollars, paid in exchange for a single CD. Very expensive CD. For this reason, new business models have been born, and they spread like wildfire.

 

What Is SaaS?

 

SaaS stands for ‘Software as a Service’, Salesforce.com is probably the most famous SaaS. The model is so successful, it extended Salesforce’s reach far beyond its status as a CRM application provider and challenged many of the traditional enterprise software vendors.

Historically, companies were required to buy, build, and maintain their IT infrastructures despite exponential costs. SaaS gives companies an alternative. Now, they can plug in and subscribe to services built on shared infrastructure via the Internet. The SaaS model has flourished in recent years because of the many benefits it offers to businesses of all sizes and types.

 

Benefits of SaaS

 

Software as a Service has a lot to offer. If it’s used properly, it can help your business save money, time and human resources.

  • SaaS is easy to use

SaaS applications are available from any computer or any device – anytime, anywhere. Because most people are familiar with using the Internet, SaaS apps tend to have high adoption rates, with a shorter training period.

  • Lower costs

SaaS applications are subscription-based, which means lower initial costs. Having the SaaS provider manage the IT infrastructure means lower IT costs for hardware, software, and the people needed to manage it all.

  • Painless implementation and upgrades

Because the SaaS provider manages all updates and upgrades, there are no patches for customers to download or install. The SaaS provider also manages availability – all you need as a customer is a web browser and internet access.

  • Seamless integration, customization, and scaling

SaaS companies with true multitenant architectures can scale indefinitely to meet customer demand, including customization if required. Plus, many provide APIs that let you integrate with existing ERP systems or other business productivity systems.

 

Is SaaS Right for Your Business?

 

For newly established companies it’s almost a ‘no-brainer’ to quickly deploy a collection of SaaS business applications and pay for them with a monthly subscription, rather than invest in IT infrastructure and technical support. Probably the biggest problem for small businesses is the enormous amount of choice that’s already available in the SaaS market.

Larger businesses have a different set of problems to deal with when it comes to SaaS, mostly around integration with existing enterprise software (which can be already locked with costly contracts). Still, enterprises looking to expand into new regions, or adopt new ‘social’ business processes, may well find that SaaS is the most cost-effective way to go.

 

SaaS = Innovation

 

Innovation is everywhere; it can be hard to keep up, but that is part of the fun. New products and services are released every month, and they challenge the way business operates today.

SaaS applications are setting the stage for a new era of IT, and the biggest advantage of all is how quickly they can be re-shaped and re-purposed by a constantly changing business environment. The possibilities are endless for what lies ahead.

freight ratesheets

Quotiss Logistics Software Explained

Freight forwarding is a very complex business. There are hundreds of thousands of possible port pairs, multiple container types, millions of local exceptions. In addition, freight rates change frequently. There are also numerous surcharges applied on top of freight rates, and special premium/discount levels are negotiated for most of the customers. All of that results in millions of freight quotes full of special notes and exceptions, which are very difficult to prepare, manage, and keep track of without the right software in place.

At Quotiss, we tackle the main problem of the industry from a different angle: instead of digitizing the enormous complexity of freight rates, we dramatically simplify the freight rate management process, reducing the number of variables in the equation.

Freight rate complexity can be reduced by 99%, following the data patterns discovered by Pareto 100 years ago.

Quotiss sales automation software generates 100% accurate quotes in seconds. The software is user-friendly and tailored to the freight forwarding business. It brings order and structure.

 

How Does Quotiss Work?

 

Quotiss is a sales automation software for the freight forwarders of any size and specialty. In the more technical terms, Quotiss is a CPQ software, where CPQ stands for Configure – Price – Quote.

CPQ software helps sales teams to generate accurate sales quotes, gives visibility of the latest product and pricing information, provides a structure for the whole commercial process from A to Z. With the right CPQ software, sales teams can close more deals faster and make sure that their freight quotes are error-free.

 

Configure – Price – Quote

 

At the core of Quotiss, there is a powerful freight simplification engine, inspired by Pareto Rule and KISS Principle. Thanks to that, Quotiss removes 99% of complexity from the commercial process and structures the freight rate management in a smart and simple way.

The majority of logistics companies still use Excel spreadsheets to manage their freight rates. This leads to a lot of confusion, manual errors, and dramatic loss of revenues. Seeking solutions, companies end up hiring more sales support people or outsource such tasks to the service centers.

With Quotiss, carrier contract management is 99% simplified, thanks to the unique algorithm and quick freight tariff upload mechanism. This simplification allows to keep full control over freight rate management internally.

Once the freight pricing is streamlined, the freight quotes are automated. A salesperson can quote freight rates with 100% accuracy in less than a minute! With Quotiss, they can send a freight quote to one client or to a hundred clients in one click. It takes one click or 5 seconds, and everyone will receive a freight quote perfectly tailored to their needs – origin, destination, local charges, special notes and terms, margin levels are saved for each customer.

Quotiss also brings real-time sales performance analytics, enabling data-driven decision making to maximize the profit margins.

 

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 ratesheets

KISS Principle in Freight Forwarding

KISS is the acronym that stands for simplicity. There are a couple of interpretations of what KISS acronym really means, for instance:

  • “Keep it short and simple”
  • “Keep it simple, stupid”
  • “Keep it simple and straightforward”

The Principle was formulated by Kelly Johnson in the middle of the 20th century. It is very relevant nowadays, especially in software design and freight forwarding.

As a user experience shows, it is easy to turn a potentially good software product into a “monstrous creature” by over-engineering and over-customizing the standard functionalities, UX, and UI.

 

KISS Principle in Freight Forwarding

 

The freight forwarding business is neither straightforward, nor simple.  Let’s make a quick calculation for the container shipping:

  • there are 500 container ports in the world;
  • there are 12 container types.

If major shipping lines and freight forwarders need to provide freight quotes for all possible ocean port-port-container combinations, how many quotes would they have to generate?

499 x 499 x 12 ~ 3.000.000

These 3 million quotes only cover the basic ocean freight. We shouldn’t forget about different commodities, special deals and various types of surcharges. Now add all the inland trucking locations! To sum up, there are billions of combinations! Now add another factor in – the freight rates change frequently. This means, that a new quote has to be generated, and the cycle will repeat again.

 

Complexity vs Simplicity

 

How does the industry manage this complexity? Freight forwarding companies choose either to implement highly complex integrated software business suit solutions or stick to outdated legacy software or maximize the value of the good old MS Excel. Actually, all the listed options are accompanied by millions of excel files sent back and forth.

The question is this: is it worth digitizing a highly inefficient process? 

At Quotiss, we tackle the main problem of the industry from a different angle: instead of digitizing the enormous complexity of freight rates, we dramatically simplify the freight rate management process, reducing the number of variables in the equation.

Freight rate complexity can be reduced by 99%, following the data patterns discovered by Pareto 100 years ago.

Quotiss sales automation software generates 100% accurate quotes in seconds. The software is user-friendly and tailored to the freight forwarding business. It brings order and structure.

 

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 ratesheets

Pareto Principle in Freight Forwarding

Over 100 years ago, Italian economist and sociologist Vilfredo Pareto noticed a few recurring distribution patterns, which led him to discover that 80% of results come from 20% of causes. This phenomenon was called the Pareto Principle or the ‘80/20 Rule‘. The 80/20 distribution patterns are so universal, that they apply practically everywhere, for example:

  • 80% of sales revenue comes from 20% of clients;
  • 80% of traffic comes in 20% of the time;
  • 80% of healthcare costs are generated by 20% of patients.

There could be slight variations in the percentage ratio, but there are always main factors which affect the result more than the others. Pareto discovery is extremely important, and the analysis of Pareto’s cause and effect can dramatically increase business productivity. You can read more about applying the Pareto principle in business here.

 

Pareto Rule in Freight Forwarding

 

How to apply the Pareto Principle to international logistics? Following the statistical analysis of the global trade volumes, it is easy to see that the same distribution pattern, discovered 100 years ago in Italy, works for the shipping market.

Let’s take a look at ocean freight in containers. The data is consistent. Basically, Vilfredo Pareto predicted the container volume distribution pattern 60 years before the container was even invented!

  • 80% of container volume is shipped from 20% of ports;
  • 80% of container volume is shipped by 20% of companies.

The data pattern applies to Russia, China, Brazil, and other countries. It remains similar in case import and export. You will find the same distribution patterns in FCL and LCL, in rail, road, sea and air freight.

In some cases, the Pareto distribution chart can be even more dramatic. Let’s take a closer look at the busiest world trade route –  Far East Asia imports to Europe. There are approximately 150 active ports in the Far East and Southeast Asia. However, only 16 of them (roughly 10%) generate 80% of volume:

ports

 

How to Leverage the 80/20 Rule?

 

Freight forwarding is a very complex business. There are hundreds of thousands of possible port pairs, multiple container types, millions of local exceptions. In addition, freight rates change frequently. There are also numerous surcharges applied on top of freight rates, and special premium/discount levels are negotiated for most of the customers. All of that results in millions of freight quotes full of special notes and exceptions, which are very difficult to prepare, manage, and keep track of without the right software in place.

At Quotiss, we tackle the main problem of the industry from a different angle: instead of digitizing the enormous complexity of freight rates, we dramatically simplify the freight rate management process, reducing the number of variables in the equation.

Freight rate complexity can be reduced by 99%, following the data patterns discovered by Pareto 100 years ago.

Quotiss sales automation software generates 100% accurate quotes in seconds. The software is user-friendly and tailored to the freight forwarding business. It brings order and structure.

 

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.