Jul.28--LOWER cost of sales and greater business wins are becoming motivating factors amid a slowly emerging shift towards automation as experts claim forwarders are losing out owing to out-dated back-end IT systems.
A "secret shipper" survey by logistics technology firm Freightos identified a "silo" mentality, reports Lloyd's Loading List.
It concluded that their slow and inconsistent responses were due "primarily to the archaic back-end systems so prevalent in the industry, and the lack of data sharing between fiefdoms," particularly with regards to issuing quotes.
The average quote time was 62 hours, with some quotes taking up to a week, Freightos said, with the quoting process also "rife with other problems, ranging from vague quotations to blatant inaccuracies."
"In some forwarders, each office, or even individual sales staff, used their own price quote templates," said Freightos CEO Zvi Schreiber. Many had inactive contact numbers on their website. Worst of all, a staggering 43 per cent of quote requests were simply ignored."
In a market characterised by over-capacity, stagnant growth and cutthroat competition, rate volatility is prompting shippers to re-evaluate the efficacy of long-term contracts and opting to work with multiple 3PLs with short-term rates.
"In such a competitive industry, in which spot quotes play an increasingly important role, you would expect freight vendors to quote quickly and efficiently, in order to reduce their cost of sale and increase their win rate," Mr Schreiber said.
The report said he cited the problems as being linked to company politics, as much as technology.
"Freight forwarders are traditionally structured as archipelago in which each country, and in fact each station, maintains its own relationship with the local carriers, ocean lines, airlines, and trucking companies," he said.
"Now with cloud computing, it is becoming feasible to embark on sharing rates across offices worldwide, and between freight forwarders and their agents, so that all parties can quote door-to-door, in an automatic way."
Mr Schreiber said a few freight forwarders were already successfully experimenting with this model and experiencing lower cost of sale and higher win rates.
The study involved requesting data from dozens of air, ocean and ground freight quotes from five of the top 15 freight forwarders over a two-month period earlier this year, to compile data on the sales process and customer experience of procuring international freight forwarding services.