The freight forwarding business is rife with challenges, from narrow profit margins to staying abreast of the latest regulatory and statutory requirements. So the right freight forwarding software can make all the difference – if you know what to look for.
In theory, the same issues affect all businesses involved in the movement and management of goods. But there are some significant differences between moving goods around for a single company and moving goods for many different entities, especially if you offer value added services.
So regardless of what you call yourself – freight forwarder, logistics service provider, third-party logistics provider – there are additional complexities and interdependencies that you need to deal with. Here are the top nine questions you should be asking vendors if you’re in the market for a freight forwarding solution.
- How much experience do you specifically have of working with LSPs? Check that your vendor really understands the differences between the business models, and what they mean in practice.
- How will your solution adapt as our business grows? Make sure your chosen vendor has worked through these scenarios with other customers so that you can benefit from their experience, and that its software allows you to create multiple hierarchies and divisions and link up with logistics networks without always needing to call them back in to hard code changes, generating delays and further costs. If you operate in foreign countries [or plan to in the near future], you need to ensure it is feasible for you to operate on one central system for visibility and not one system per country.
- Can your solution be configured to suit our business? Make sure your chosen system will provide the flexibility you need and that you can make necessary tweaks without requiring complicated changes to the product itself.
- How quickly will your system allow us to set up new customers, and how easy is it to on-board them? Find out if your operational staff can be easily trained to do this, for example, by configuring/re-configuring workflows or if the process is more complicated – and thus more time-consuming and expensive.
- What degree of customer visibility will the solution enable? Does the solution facilitate a dedicated web portal for each customer (or multiple portals if required), allowing customers to access shipment data and saving both you and the customer time and money by avoiding the need to process information manually and removing risk of error?
- How will the system handle billing? You want something that can handle the complete order-to-cash process. Most importantly, ask the vendor to give you a detailed breakdown of how the system handles cost and revenue allocation. Does it allow you to identify unprofitable customers and/or lanes?
- How does the solution handle customs compliance? Ask the vendor to detail whether the solution will interface directly with customs or do so via a customs service provider to ensure compliance with ALL of the countries you need. And how easy will it be to comply with the requirements of other countries in the future?
- Which delivery models do you offer? If you want to minimize the resources required to manage and maintain the solution (or focus on your core business while your vendor takes care of your IT) and it’s important that start-up costs are kept in check, then you should be looking at a cloud-based solution. Conversely, if you have a well-developed IT infrastructure and large multi-country operations, an on-premises model may be the preferred delivery option for your business. Either way, make sure the vendor has a solid track record of offering and successfully implementing that model.
- How quickly can I expect to realize benefits from the solution? Ask the vendor to provide you with timelines based on its deployments with other freight forwarders. And do your due diligence by checking these out by calling references and speaking to your peers (in another country or region if commercial secrecy is paramount).
There will certainly be other questions to ask depending on your company’s specific circumstances – and as you learn more about a specific system. But these questions form the baseline of what you need to know if you hope to choose the ideal freight forwarding solution for your business.