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Automation & Digitalization

Automation and digitalization in freight forwarding

SaaS Software as a service

Logistics Software as a Service (SaaS)

Automation & Digitalization, Logistics Software / By

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.

KISS principle

KISS Principle in Freight Forwarding

Simplicity & Efficiency, Automation & Digitalization / By

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.

Pareto Principle

Pareto Principle in Freight Forwarding

Automation & Digitalization, Sales Automation, Simplicity & Efficiency / By

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.