Why Is Your Company’s Automation Technology Failing?

• Integration with your forwarding system is easy.
• Everybody talks about agile, but in real life, this means finding solutions that are testable in bite-size chunks.
• And even though operators are super busy, they will not willingly give up control of even the most mundane activities if they’re not convinced the alternative works better.
• Now is the time 2021 was a great year for freight forwarders.

Freight forwarding companies used to handle shipments from beginning to end as reported by The Loadstar.

Productivity 

Operators orchestrated the shipment, performed data entry, communicated with carriers, kept the customer informed, and filed all the documents– all without much help from automation.

Creating jobs, populating data, and filing documents look very much like they did 10 years ago.

Operators’ productivity could double without all the busywork.

So why has our industry made so little progress in the document and back-office automation?

Technology doesn’t fit the way people really work

Here are two problems that technology can solve for operators:

• Emailed documents: Operators put spent a lot of time scanning attachments, entering data, and filing documents. It takes 10 minutes to split up a pre-alert, doctype, and file. Operators receive five or more arrival notices per shipment, and they must review each one to see if anything has changed: ETA? What is your IT number? What’s the number for pick-up? Location? ‘Death by a thousand cuts,’ as the saying goes.

• Payables: Many freight forwarders now have payables teams that have taken over the task of processing vendor bills from operators. However, almost half of the time, invoices do not match the incurred costs, and the operator is once again responsible for resolving the mismatch – reviewing documents, checking shipment data, and writing emails.

Recent solutions

Recent solutions have focused on technical fixes, without solving the real underlying problem for operators.

For example, document systems pick off some of the incoming documents but not others.

Payables packages focus on uploading invoice data to forwarding systems but don’t address the real pain–handling exceptions.

And worse yet, we’re asking the operator to learn and work in yet another system, adding complexity and annoyance.

Going forward, technology needs to deliver value that’s based on how operators really work: solving the whole problem, not part of it… working gracefully with exceptions as well as the “happy path”… and seamlessly embedded in the operators’ existing workflows and systems.

The return ain’t there

Even when the underlying tech is capable, a software offering needs to establish a clear financial return to see the light of day.

Front-loaded expense is the first and most obvious deal killer.

The more you need to spend initially, the harder it is to financially justify.

Nobody but nobody needs another IT project.

Integration with your forwarding system is easy.

Finally, too many projects are evaluated on technical metrics alone, and then get junked by executive leadership due to lack of return.

• Operator productivity. What is the maximum number of shipments that your operators can handle? Wouldn’t it be fantastic to increase the number of open jobs per operator from 75 to 150? The best strategy to improve gross margin to net margin conversion is to increase operator productivity. Gross margins fluctuate in response to supply and demand. The process of converting gross to the net is infinite.

• Days to cash. Accruing correctly, knowing your charges and rates, and having all of your documentation in order all help to ensure that your billing is quick and accurate. It’s all about being paid at the end of the day, especially in a low-margin industry!

 Fear of failure 

Many freight forwarders have become sceptical that new technology solutions can really deliver speedy and dramatic change.

Everybody talks about agile, but in real life, this means finding solutions that are testable in bite-size chunks.

Every new pilot needs to be rapidly scalable.

This means high volumes, multiple languages, different time zones and across the world.

It’s not easy but, fortunately, it is increasingly doable.

Operators can make or break almost any initiative.

Now is the time

For freight forwarders, 2021 was a fantastic year. To be honest, 2022 is looking quite promising as well. But astute freight forwarders know, that rising waves don’t last forever, and it’s only when the tide recedes that you find out who’s been swimming naked.

We must continue to evolve the operator’s function by automating the routine and increasing productivity. Instead of data entry and document management, let’s employ technology to focus on business judgement and problem-solving. It is our responsibility to provide operators with tools that are tailored to their specific needs, provide high returns, and enable a clear path to success.

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Source: The Loadstar

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