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Simplicity & Efficiency

General updates on the subject of Simplicity and Efficiency in freight forwarding

the dollar value of freight software

The Dollar Value of Logistics Software

Freight Ratesheets & Tariffs, Instant Freight Quotes, Logistics Software, Sales Automation, Simplicity & Efficiency / By

What is the exact dollar value of the logistics software? Every freight forwarder knows that the logistics business is mostly driven by price. In such a competitive market, any opportunity to improve profit margins should not be missed.

Technology can significantly improve efficiencies internally, resulting in greater profitability. These improvements mostly come from the reduction of manual processes –  time-consuming and error-prone. For example, automating the process of searching and aggregating freight rates can save at least 30% of the sales reps’ time.

But what is the exact dollar value of technology for a freight forwarder? And more importantly, how to calculate the extra profit margins it can help generate? You will find a very simple online calculator at the end of this article.

But first, let’s look at the areas where digitization can help the most.

 

Logistics Software Brings Transparency

 

Traditionally, the sales teams in freight forwarding companies would have to rely on multiple Excel tables with rates, surcharges, and special conditions, preparing freight quotes manually. This is far from optimal, as the margin of error is too high.

Now, when the freight rates change so often, the value of having all commercial data on one platform in a structured way is essential to maintain sanity and transparency.

 

Logistics Software Makes It Easier

 

Get rid of the large Excel freight ratesheets, and put your commercial data on one platform in a simple and transparent way. This will simplify your sales and procurement workflow.

Simplification and automation provide infinite possibilities and allow you to upload freight tariffs and make freight quotes in a few clicks.

 

Logistics Software Brings Security

 

Security and confidentiality are very important when attempting to forge business relationships. With advances in technology come advances in data privacy.

In Quotiss, we made it our top priority to provide the highest level of data security to our clients. We use AWS cloud servers – the technology which is trusted by the largest businesses across the globe: Siemens, Vodafone, Philips, General Electric, and others. With daily database backups, digital safety is 100% guaranteed.

 

Logistics Software Brings Savings

 

A computer can carry out tasks in seconds and with 100% accuracy. One of the greatest benefits of implementing technology into the commercial business process is time-saving and cost reduction.

In Quotiss, your latest freight rates and your most precise client database are integrated into one platform. Contract management simplification allows you to automate and track the freight quotes.

Not only can this reduce the risk of error and raise the quality standard, but also save you great amounts of active sales time. Such time saving opens new doors for using sales talents in ways that will generate more profit at the end of the day.

How much more? Use our simple online ROI calculator and get your estimate in USD.

quotiss software automations

Quotiss Helps Freight Forwarders Go Digital

Freight Rate Management, Logistics Software, Sales Automation, Simplicity & Efficiency / By

Freight forwarding is one of the largest and most important industries in the world, but also very traditional and least digitized. Quotiss helps traditional freight forwarding companies become digital. We believe, that any freight forwarder can become digital with the right set of digital tools.

Container shipping is one of the least digitized segments of all transport services. Managing freight tariffs is a well known technical challenge, which keeps some freight forwarders stuck in the era of MS Excel.

 

Digital Freight Forwarders

 

There are many startups who try to revolutionize the ‘ancient’ industry. Business models like ‘freight marketplace’ and ‘digital freight forwarder’ are funded with millions of dollars. The frequently asked question is whether the freight forwarders will be replaced with these online services in the near future or not.

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 2018, 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.

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.

For decades, freight forwarders take 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.

 

How to Digitize Freight Rates?

 

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’s not possible to offer online freight quotes if your selling rates are maintained in Excel. You run a big risk of low data accuracy, which can cause financial loss and/or reputational risks.

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. Nevertheless, the technology which helps streamline complex logistics processes is already there: electronic communication, big data analysis, transport management systems, etc.

Early adopters are already enjoying the benefits: becoming faster, more flexible, and cost-efficient. There is a visible pressure from the digitized forwarders towards their traditional competitors. It’s becoming obvious, that a “regular” forwarder will soon need to find ways to be on par with the digital world.

Sales Automation Software for Logistics

 

Marcin Zarzecki, CEO of Quotiss says:
“Complex contracts, massive ratesheets, thousands of emails, Excels and PDFs bring frustration, consume resources, and destroy efficiency. At Quotiss, we found a solution that brings structure and simplicity.”

Quotiss has united a team of industry professionals and became a successful startup supported by Techstars Ventures and Google for Entrepreneurs.

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.

Once the carriers’ contracts are simplified and uploaded into the system, the quoting process becomes fully automated. Having all commercial data on one platform, freight forwarders can enjoy full transparency: archive of freight rates and quotes, profitability, the efficiency of sales teams in real-time. No more searching through multiple folders, excel files and emails.

“Modern technology used to be available only for big players with massive resources. But this is changing. Medium and small-sized forwarders start adopting instruments like Quotiss and, thus, learn to compete with efficiency and not just the rate.” – says Eugene Reznikov, Quotiss representative in Hong Kong.

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.

Quotiss freight software

Quotiss Freight Software Explained

Freight Rate Management, Instant Freight Quotes, Logistics Software, Sales Automation, Simplicity & Efficiency / By

In the last couple of months, we see a growing interest in our product and based on the questions we receive, we’ve prepared this article about Quotiss freight software. As you read through, you will find out what Quotiss is and what it is not, and how exactly Quotiss helps freight forwarders to be competitive and boost sales results.

Due to highly complicated nature of shipping, there is no standard software that can handle the typical business requirements of a freight forwarder.

The logistics industry is based on MS Excel or custom-made software. Most of the medium to big size forwarders work with the software designed specifically for their organization’s needs. There are too many flaws in this approach, starting from the cost to create and maintain it, to a very slow response to change requests.

 

What is Quotiss?

 

Quotiss is a freight rate management and sales automation software designed for the freight forwarding companies of any size and type. 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.

Quotiss provides a basic framework, which simplifies the commercial process of any freight forwarder. Quotiss brings structure to the commercial teams. It can be configured to match the most complex business requirements.

Quotiss covers the following business processes:

  • Freight rate management
  • Automated freight quotes
  • CRM
  • Sales performance analytics

Once the freight pricing is streamlined, the freight quotes are automated. A salesperson can quote freight rates with 100% accuracy in a couple of clicks! With Quotiss, they can send a freight quote to one client or to a hundred clients at once. Your customers 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.

 

What Quotiss Has to Offer:

 

  • Unique algorithm to manage freight rate tariffs and spot rates – no more Excel files;
  • Freight quotes are automated – so sales can spend time on selling;
  • Client database – archive of quotes;
  • Follow up on the deals;
  • Unified quote formatting – solid brand image;
  • One platform for all commercial activities – increased business intelligence;
  • Easy sales onboarding – no more lengthy handovers;
  • Intuitive UX and modern UI– sales people love it!

 

Freight Software for Logistics

 

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’s not possible to offer online freight quotes if your selling rates are maintained in Excel. You run a big risk of low data accuracy, which can cause financial loss and/or reputational risks.

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 rates digitization quotiss

How to Digitize Freight Rates?

Automation & Digitalization, Digital Freight, Freight Rate Management, Simplicity & Efficiency / By

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

Pizza vs Freight Rates

Freight Rate Management, Freight Ratesheets & Tariffs, Simplicity & Efficiency / By

Everybody loves pizza!

Over 5 billion pizzas are eaten every year in the world. It is a 30 billion dollar business, and more and more new pizzerias are opening. Probably, one of the reasons is that the ‘pizza model’ is universal and extremely simple to replicate! No matter which country you go to, pizza looks round, ingredients are similar and the menu has the same structure everywhere. There are traditional all-time favorites like ‘Margherita’ or ‘Peperoni’, etc (the base), with a separate list of customizations in the form of extra toppings.

Nobody Loves Freight Rates… 

Over 100 million containers are shipped every year in the world, forming the backbone of the current economy. However, the ‘shipping menu’ aka freight tariffs  – unlike pizza menu – is extremely complicated, with unique complexity to the freight pricing structure.

Imagine going to a pizzeria, where you have to wait for an hour to get a menu, because all possible customizations are put together manually upon request, for each table separately. And you can never be sure that you got the full menu at the right price. Well, this is the reality of the freight tariffs in container shipping.

 

Hub and Spoke vs Point to Point Model

 

You might say that pizzeria has nothing to do with freight shipping, but actually they share the same business model. The model is called ‘Hub and Spoke’, named after a wire wheel. The classic form of this business model is seen in the aviation industry: each airline has a hub airport, used as the base for operations. The airline provides a number of regular connections, some ‘unusual’ connections at higher prices, and presents a list of extra paid services for passengers.

Freight ratesheets

The wire-wheel consists of many different parts and internal links, but in the end everything is interconnected and spinning. The great advantage of this model is that the pricing can be highly accurate. The product is consistent because there are no individual variations.

 

Hub and Spoke in Shipping

 

The shipping industry is the pioneer of the hub and spoke: large ship takes the container to a hub port, the small ship takes it to a small port, and truck delivers it to the client. Must be simple and efficient, right? Operationally – yes, but not commercially.

Commercially, each mode of transport for this container is a complex calculation in itself – it consists of various surcharges, special terms, seasonal add-ons, and individually negotiated charges. And the worst part – freight rates change weekly. At this point-to-point commercial structure, container shipping loses efficiency and creates long lines of unhappy clients, waiting for days for their freight rates.

At the attempt to solve the problem, many technology companies try to digitize freight pricing and quoting process ‘as is’, which does not bring the expected result – before digitization, the broken process has to be fixed.

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.

THE DARK SIDE OF PROCESS IMPROVEMENT

The Dark Side of Process Improvement

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


“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.

Startup Battle 2016 - II place for Quotiss

Quotiss, the President of Poland and Iron Maiden

Awards & Recognition, Simplicity & Efficiency / By

kongres590

Quotiss team has a huge reason to celebrate success – 2nd prize in a prestigious national Congress of Economic Development in Rzeszow, Poland (17-18 November, 2016) contest called Startup Battle.

The Congress was patronized by President of Poland Andrzej Duda. Together with Polish Prime Minister Beata Szydło and Minister of Finance and Economic Development Mateusz Morawiecki, they spoke openly about the possible ways to improve cooperation between the state and business owners.

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Startup Battle took place on Thursday, 17th November. Out of 60+ projects, which applied to participate in the battle, only 24 most innovative startups got the opportunity to present their ideas during the forum. The jury consisted of investors, entrepreneurs, and representatives from government, startup, and business communities, a total of 15 judges. Assessment of each project was based on several criteria, such as business innovation, market knowledge, business model, project team, and soft skills.

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Marcin Zarzecki, CEO of Quotiss, presenting at the main congress stage

Only 7 teams made it to the final round after initial eliminations. The tension was building up as everyone had to wait until the next day morning to hear the results. We were extremely excited to get a second place among the best Polish startups! This victory means a lot to us and we are very grateful to everyone who supported us!

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We were thrilled and excited to receive the award, and the day continued with photographs and interviews for the media. Also we were honored to meet with the President of Poland Andrzej Duda, and it was very satisfying to see his engaging interest in what we do – later that day President’s office asked us to provide more information about our project.

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President of Poland Andrzej Duda meeting with the Quotiss team

 

Media about us:

rzeczpospolita pulshr  onet wp wyborcza   forsal  carpatia-business  business-insider697001022521438861114gazetaprawna 

Radio interviews:

img_4402radio-wnet

polskie-radio
(from 4:30)

‘Congress 590’ took its name from the prefix (first 3 digits) of the bar code, which indicates that the product has been made in Poland or is distributed via the Polish company. The idea of the Congress is to facilitate an open discussion between the state and business representatives and find effective ways to improve the economic development of the country.

dickinsonBruce Dickinson, the frontman of Iron Maiden and successful entrepreneur, was a special guest on the Congress 590. He spoke about the advantages of building ‘fan base’ instead of ‘customer base’, and really impressed the public with the diversity of his business portfolio – from legendary rock band singer, to airline owner, to pilot, to beer / watch / video games producer.

Power of simplicity

The Power of Simplicity

Simplicity & Efficiency, Freight Rate Management / By

When John F. Kennedy became the President of the USA in January 1961, Americans had the perception that the United States was losing the Space Race with the Soviet Union, which had successfully launched the first artificial satellite, Sputnik, almost four years earlier. The perception deepened when in April 1961, Russian cosmonaut Yuri Gagarin became the first man in space.

Convinced of the political need to make an achievement that would decisively demonstrate America’s space superiority, Kennedy stood before Congress on May 25, 1961, and proposed that “this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.”

 

A Man on the Moon

 

As Heath brothers put it in their book “Made to Stick”: ‘Had John F. Kennedy been a CEO, he would have said, “Our mission is to become the international leader in the space industry through maximum team-centered innovation and strategically targeted aerospace initiatives”.

Large organizations are by nature complex, but over the years they added layer upon layer of complexity to how businesses are structured and managed. In many, more energy is devoted to navigating the labyrinth than achieving results.

Accountability is unclear, decision rights are vague, and frequently there is no clear idea of how to use large amounts of generated data. What seems like a simple question to a CEO can turn into a major exercise for hundreds of other people down the organization chart.

 

Longing for Simplicity

 

In recent years, corporations have put their business processes through rigorous scrutiny, with Six Sigma, Lean model, 5 Why’s, etc. While some processes are relatively well structured and controlled, many others haven’t benefited from improvement techniques.

Consider freight rate management in shipping – pricing and quoting of freight rates haven’t evolved since last century. Many global corporations are still utilizing MS Excel as the main tool to execute commercial activities. That results in too much variability and makes the job extremely inefficient.

 

Can Technology help?

 

Many companies have found that trying to simplify processes through large-scale enterprise systems, often leads to diminished rather than enhanced productivity. Why is that? Simply, a large enterprise system is a complexity in itself.

It takes several months (or rather years) to analyze, blueprint, adapt, implement, re-write business processes and then re-write again, facing the reality and actual user feedback. It usually costs a lot of money, making it difficult for top management to admit that something went wrong and expected efficiency has not been achieved, thus creating anxiety and disappointment at the bottom of the organization chart.

The Solution is Simplicity. Keep it simple, even when it actually is about rocket science!

“Before this decade is out, landing a man on the Moon and returning him safely to the Earth”.

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.

Quotiss - freight management software

Why Do Freight Rates Change So Often?

Freight Rate Management, Freight Ratesheets & Tariffs, Simplicity & Efficiency / By

In the previous post “Pricing Challenge in Container Shipping” we mentioned that it’s not easy to structure freight tariffs and send instant freight quotes. The reason being the high complexity of the transportation costs: up to 25 variable charges plus the overall rate volatility caused by the supply and demand imbalance.

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. However, importers and exporters do not like that complexity when it comes to paying freight invoices. The issue often sparks debates and the most popular solution on the table is to quote All-IN rates in order to limit the number of charges in question and simplify the pricing structure.

At Quotiss, we support any process simplification, and we also offer a solution to the complicated freight rates.

 

Why Do Freight Rates Change Often (Technically)

 

Rate volatility is an issue that adds complexity to the freight rate management process.

Let’s take a closer look at the ocean freight rate structure to check where this volatility originates. Out of all components, the majority of freight and local charges are fixed and change very rarely, for example THC (terminal handling charge). A few charges change approx. every quarter, like BAF (bunker surcharge). Some of the charges are seasonal, like PSS (peak season surcharge) or WSC (winter season surcharge).

There are many different surcharges when it comes to ocean freight, there is only one that changes very frequently. It is BAS (basic freight).

Technically, basic freight (BAS) is the main driving force for ocean freight rate volatility. Following the 80/20 rule of Pareto, if there is an efficient tool to manage frequent BAS changes, then 80% of the ocean freight tariffs will be updated automatically.

 

Why Do Freight Rates Change Often (Commercially)

 

Simple and straightforward – freight rates are determined by supply and demand. Market forces are the main driving factor behind the freight rate fluctuations. Factors such as fuel prices, distance traveled, terminal costs, etc. don’t impact freight rates as much as supply and demand do.

In recent years, shipping lines have been building bigger and bigger ships to benefit from the economy of scale. The global economy has also been growing but at a much slower pace. That distortion resulted in an increasing gap between supply and demand. This is the main and most important reason why freight rates are hitting the record low values in recent years. Cheaper fuel may also contribute to the overall picture, but it will never be the most significant factor. Ocean shipping companies won’t be able to keep rates from sliding if they don’t idle more ships.

According to the United Nations Conference on Trade and Development (UNCTAD):

“In general terms, the demand and the supply of maritime transport services interact with each other to determine freight rates. While there are countless factors affecting supply and demand, the exposure of freights rates to market forces is inevitable. Cargo volumes and demand for maritime transport services are usually the first to be hit by political, environmental and economic turmoil. Factors such as a slowdown in international trade, sanctions, natural disasters and weather events, regulatory measures and changes in fuel prices have an impact on the world economy and global demand for seaborne transport. These changes may occur quickly and have an immediate impact on demand for maritime transport services. As to the supply of maritime transport services, there is generally a tendency of overcapacity in the market, given that there are no inherent restrictions on the number of vessels that can be built and that it takes a long time from the moment a vessel order is placed to the time it is delivered, and is ready to be put in service.

Therefore, maritime transport is very cyclical and goes through periods of continuous busts and booms, with operators enjoying healthy earnings or struggling to meet their minimum operating costs.”

 

Complexity vs Simplicity

 

The end customer (importer or exporter) does not really care about all these factors. They just need to know what is the total price for transporting a container from A to B. They want the best freight quote, which is easy to understand, as soon as possible.

Shipping lines and freight forwarders face numerous troubles managing millions of ocean freight rates. They struggle to provide freight quotes quickly and accurately. The majority of forwarders still use MS Excel spreadsheets to manage rates.

E-mailing of the bulky MS Excel files back and forth is often the main communication channel between pricing and sales teams. Millions of MS Excel files are sent back and forth, which leads to the loss of revenues and increases the count of manual errors.

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.

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.