The Power of Partnership: How forwarders can cut costs by 40%
Ineffective and scattered communication between forwarders and carriers leads to additional costs for both parties. In this article we will explore strategies and different new digital technologies that can be leveraged to improve the process of haulier relations and to significantly reduce costs.
Effective collaboration and carrier communication in road transport
Forwarders can save up to 40% of their operational costs by automating manual processes and digitizing significant parts of the sales process. This is the conclusion reached by the Boston Consulting Group (BCG) in its analysis of the digitalisation in logistics.
Slow communication between forwarders, hauliers and shippers causes huge delays and that leads to less efficient processes and therefore higher costs. According to BCG, only 5 out of 20 forwarders send automated confirmation emails and even fewer provide instant quotations. Shippers can spend up to 100 hours receiving a quote from forwarders or carriers.
The transport industry is currently trying to find a way to improve cooperation and communication between all its players. Some of the startups and digital forwarding companies with high level digitalisation and automation have developed to big players on the market. For freight forwarders investment has gone into building good carrier-relationships in the first place in order to stay competitive on the transport market.
Carrier Communication is essential for business success
A large part of the forwarder’s success is ensured by fast and flexible actions. Without good and efficient communication to their hauliers, forwarders are facing more and more operational challenges each day. Essential features and functions such as assigning transports fast, negotiation, live tracking and capacity sourcing are not working with slow communication.
At the moment several processes in the transport industry are still massively influenced by ineffective and scattered communication. Cooperation and communication between forwarders and their hauliers is often arranged individually with each haulier. It is a huge workload for dispatchers to coordinate the whole network by phone calls or emails. Each day there are dispatchers struggling to reach carriers effectively and forwarders loosing money because of the lack of efficient communication. With the digital competitors rising to the market and especially in upcoming times of recession, good relations to hauliers has become a key factor for forwarders.
Solution:
- Communication needs to be easy, direct and fast
- Streamline communication and document sharing in one flow, ideally in real-time
- Forwarders should try to automate as many processes as possible and make use of digital tools to secure personnel capacity for other operational tasks
Investment in relationships – long-established networks with hauliers
Freight forwarding is a business-to-business service requiring investments in relationships to business partners. In the course of their successful years on the transport market many forwarders have built their own and powerful network of trusted partners. With a pool of trusted hauliers, forwarders can rely on a good environment for transport assignments. On top of that it is cheaper to work with already existing hauliers than developing new ones.
Nevertheless, even long-standing business relationships have their limits. Especially when it comes to financial aspects. Carriers can turn away from forwarders if they are no longer paid on time. But outdated processes and a lack of appreciation can also be reasons for carriers to end their cooperation with freight forwarders. For forwarders, this in turn means that they have to start the search for reliable partners anew.
Solution:
- Working with preferred and well-known companies will always be essential for forwarders
- It is important to invest in relationships with carriers, to ensure good communication (e.g via mobile app) and good working conditions and to make sure that those relationships can last as long as possible
- For forwarders certificates about responsible behavior are a good way to position themselves as a trustworthy partner
Use full potential of carrier network for transport sourcing
As soon as contracted partners within their own network are unable to provide capacity, forwarders have to start frantic search on the market by using phone, email and instant message. This time and personnel consuming procedure often ends in assigning transports to the first available carrier – either on the spot market or in a public freight exchange. The problem is, that those carriers found on the market often do not match compliance or security requirements. Forwarders take a huge risk in assigning transports to unknown transport providers from the market.
Along the whole transport sourcing process forwarders also need to pay attention to the risk of disgruntling hauliers. Transport companies receive lots of offers each day – sometimes they are literally spammed with offers from forwarders they do not even know or are not interested in cooperating with. As a result, many offers remain unanswered and hauliers focus on offers from forwarders they know, trust and work with.
Solution:
- Build targeted carrier lists with detailed pre-selection of partners so there is no need to use phone calls or emails to establish key data
- Only send relevant and targeted freight offers to a large number of selected partners at the same time without spamming them
- Label the communication and offer template so that carriers can easily recognise freight offers as coming from their “reliable and preferred forwarders” to increase their response rate
- Build own “private market place” (Private Freight Exchange) for collaboration with preferred carriers instead of using public freight exchanges
Check freight tech apps to get instant access to such features
Transport platforms such as Trans.eu offer a digital marketplace for forwarders where they can easily manage their entire carrier network and build closer relationships to preferred transport partners. With digital and automated processes Trans.eu helps your forwarding business to reduce workload for transport assignments and to improve communication with your hauliers:
- Increase transport capacity in one click – send RFQs to multiple hauliers at the same time without spamming carriers
- Connect your existing carrier pool to the platform to quickly send freight offers to trusted partners while also having the option to quickly find new, reliable partners should your own network not respond
- Manage your entire carrier network across multiple branches of your company to identify opportunities for loads or capacity within the group
- Easy communication with preferred hauliers via platform, mobile app (Loads2GO) and the integrated messenger with automatic translation feature
- Use automated rules for transport assignments based on your preset requirements
- Measure response from carriers and how many freights were assigned in a given period with comprehensive reporting
- Use as turnkey solution or integrate such features into TMS
- Handle more freights with less resources and gain more profit
Bring your own haulier network to Trans.eu!
Do you want to continue working with your preferred hauliers – but more efficiently? Would you like to learn how our Private Freight Exchange can help you to manage your carrier relationships more effectively? Book a 15 Minutes meeting with us and we can show you how you can start with our turnkey solution. No complicated carrier onboarding and software implementation necessary!