Whether freight forwarders, supply chain managers, shipping managers at logistics companies or in industry and trade – opinions on online tools for managing spot and daily prices are very diverse. This is because all of these players use certain work processes and IT systems and pursue different interests. The fact is that web or cloud applications are increasingly establishing themselves as the standard for transport management in companies. Freight exchanges also play a role in networking the players. However, there are very big differences in the various processes.
Transport offers and booking system of the freight forwarders very time consuming
The process of spot and daily price enquiries is well known. In this process, companies place transport enquiries with their own freight forwarders by email or telephone. The freight forwarders then create transport offers using their own IT systems and send these to the shippers by email. The shippers then compare the offers – often with the help of Excel – and send freight orders back to a freight forwarder. For freight forwarders, this form of transport processing is very convenient, as they can use their own IT systems and the processes that are best for them to create offers. For the shipper, however, the process described is very time-consuming, as they have to obtain the transport offers manually, compare them and place transport orders based on them. Shippers are therefore also interested in using their own systems that help them to manage their transport services efficiently.
Online freight management for the transport of goods and products
Industrial companies and trading companies that deal with the transport of goods and products are increasingly asking themselves whether there is a better form of freight management for them. They want a central location where they can manage all their transport requests, transport offers received and transport orders placed. If they, like the freight forwarders, use their own IT system for freight management, they can send freight requests digitally to their freight forwarders, who then submit a standardized transport offer instead of sending a PDF offer by email. Since on-premise solutions are often very expensive, companies are increasingly turning to online freight management. This is an ideal way to bundle communication with transporters and freight forwarders.
Transport software is confused with freight exchange
Freight forwarders and shippers often use freight exchanges. Transporters find transport orders there and shippers find cheap transport companies. The term exchange comes from the fact that transport is also awarded on a promotional basis. As the term already suggests, the focus is on transport costs rather than on operational freight processing. Many companies want to carry out transport as “cheaply” as possible. The quality of simple standard transport services often suffers as a result.
Transport software, on the other hand, digitizes manual processes with the focus on saving time, increasing transport cost transparency and enabling better decisions. Communication between shippers and their own freight forwarders is also structured. In addition, the transport software enables all data on freight inquiries, freight offers and freight orders to be managed in one system.
Tools for obtaining freight rates – “Get rates” – not suitable for individual transport orders
So far, we have described the management of spot and daily prices, i.e. the management of individual transports. Managing freight rates, on the other hand, involves prices that apply for a specific transport volume and within a specific period of time. In industry circles, these prices are often called rates, and obtaining such freight rates is called “get rates”. However, other people also use the term “get rates” to refer to obtaining prices for individual transports, which can lead to misunderstandings. Unfortunately, some tools for managing freight rates do not include the management of individual transports. Tools for managing daily prices often do not include the management of freight rates.
Daily prices more flexible compared to freight rates and freight exchanges
If companies request their transports individually from logistics partners, they usually get the optimal transport price for that period. However, transport prices can fluctuate depending on the freight capacity on container ships and aircraft. If a company uses a fixed base of service providers, a high quality of transport is guaranteed and there are no operational problems. If companies assign their entire transport volume to a freight forwarder for a certain period at fixed freight rates, the total transport costs for that period are also fixed. Which option means lower transport costs for a company can only be finally answered after a certain period of time. Freight exchanges, on the other hand, focus on cheap transport and less on transport quality. Especially when indirect costs due to possible problems in transport processing are included, their cost advantage is more than questionable. In any case, their use makes transport costs and transport quality much less easy to calculate than when working with fixed freight forwarders.
Transport management software in the cloud simple and efficient
Modern transport management software helps companies to digitalise their own freight management easily and efficiently. Transport requests, transport offers and freight orders are presented in a clear manner. Transport prices become more transparent and companies can concentrate on freight processing and working with their logistics service providers without having to manually prepare data from emails, PDFs or Excel documents.