Why web-based software for obtaining and comparing transport offers has great benefits for companies with in-house forwarders
by Rebekka Scholz
Web-based software, also known as cloud software, has been enjoying growing popularity in logistics for several years. Companies use these to obtain and compare transport offers from forwarding companies. In this way, they digitize their processes and become significantly more efficient. In addition to saving time and increasing transport cost transparency, you can use it to calculate shipping costs and keep them at a level customary in the market. However, many small and medium-sized mail order companies that work with long-term logistics partners, so-called house forwarders, have not yet used these applications. The concern about putting a strain on the relationship with your trusted partners is, however, unfounded, since such web solutions simplify and support the cooperation with your own forwarding agents in many cases.
Definition of freight forwarder
What is a freight forwarder? A freight forwarder is a company that commercially organizes transports for other companies that want to transport goods from place to place. Forwarding agent and forwarder are used synonymously. A house freight forwarder or a house freight forwarder is used when a company works exclusively and permanently with a single freight forwarder.
Purchase of transport services from freight forwarders
Consignors can be manufacturers, industrial, commercial, import or export companies of a good or a consignment. The shipper orders and pays the freight forwarder for the handling of the transport. In many manufacturing or trading companies, the procurement of transport services is carried out by inbound or outbound logistics departments. Larger companies often maintain their own logistics departments - consisting of one to five experts - who bundle these activities. Smaller companies often do not have the necessary logistics knowledge and have integrated transport purchasing into their purchasing or export department.
Logistics in the value chain. Porter, ME, 1985, p. 37
Transport volume and number of forwarding agents play a role
Larger companies often have a higher transport volume compared to smaller companies. This means that there is accordingly a larger pool of forwarding agents and logistics service providers. In order to ensure that the transport volume can be handled, these companies must have a certain number of logistics partners. If there are problems with the handling, this must be compensated by other forwarding agents. Searching for new logistics service providers only at critical moments is often too late and operational problems can arise. It is also common to distribute relations between individual forwarding companies.
With small and medium-sized shippers with low transport volumes, on the other hand, it is not absolutely necessary to have a large pool of logistics service providers. They often work with one to three house forwarders with whom they have agreed on annual contracts. These senders usually do not have "race tracks", that is, relations with regular traffic, but very different routings. In addition, a lot is sold on the basis of "Ex Works" and "free house" is purchased. The transport decision is not made by the respective company, but by the trading partner.
Control over the area of forwarding and logistics is very important for senders
Basically, companies want to retain decision-making authority over the area of forwarding and logistics in order to ensure a functioning supply chain. They rely on direct and above all personal contact with their forwarding company, which is why a strong and trusting relationship with them is essential.
The outsourcing of the forwarding and logistics division weakens the relationship between the company and the forwarding agency. For example, the integration of tendering platforms, freight consultants or booking platforms in the transport purchasing is an intervention in the relationship between companies and logistics service providers. As a result, companies lose control of their supply chain, complexity increases and additional dependencies are created.
Medium-sized companies rely on the area of forwarding and transport
Small and medium-sized companies in particular are hesitant when it comes to changing house carriers, tendering their freight, or making changes in the area of forwarding and transport. They worry about complicating communication with their logistics partners. However, these senders also have to obtain and compare offers from their in-house forwarders in order to be able to opt for the best possible cooperation with them. In any case, you need transport offers for the transport costs incurred. It does not matter whether it is about long-term price agreements or rates, or spot or ad hoc transport offers for individual shipments.
Web-based software ideal for small and medium-sized senders with home carriers
In principle, many companies want to improve efficiency in the area of forwarding and logistics, but at the same time maintain a high degree of independence from external partners and forwarding companies. You do not want to tender freight and continue to work with your home carrier.
Therefore, the use of web-based software for obtaining and comparing transport offers is particularly suitable for these senders. The reason for this is that in this case the forwarding and transport area is not outsourced. The senders retain full control over their supply chain, since the applications do not interfere with the communication and support the existing cooperation with their own forwarding agents or forwarding agents. In addition, companies are increasing their efficiency by digitizing manual processes. By using these cloud solutions, even small and medium-sized senders can achieve high benefits in the form of time savings and reduction of freight costs without any disadvantages.