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September 2022 Freight Forwarder Update

Starting off with some positive news—for some, anyway—the transatlantic east-west trade route is seeing huge profits when compared to the transpacific. The reason? Spot earnings on the transpacific have been tanking for the last month.

An Alphaliner report shares the following details. Spot rate earnings from Shanghai to California have dropped below 60 cents per nautical mile, which is half of July earnings. At the time of the report, earnings on the Shanghai to New York and Shanghai to Rotterdam routes were 73 cents. A sharp contrast to the Rotterdam to New York transatlantic route, which had earnings of 217.9 cents per nautical mile.

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Next up, the FMC has issued a notice of proposed rulemaking against ocean carriers. Their intent is to change the way ocean carriers have prioritized business to date. Especially over the last several years as they’ve cozied up with the more lucrative import rates offered by east-east trade, leaving exporters and their more reasonable rates and services without room on their vessels.

The FMC wants carriers to justify and certify vessel space allocations to make things fair for all.

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Will Willie Adams, the president of the International Longshore and Warehouse Union, iron out a deal with dockworkers at the ports of Los Angeles and Long Beach?

Despite the fact that some say current work disruptions haven’t affected coastwide operations, there is a general acceptance that things will deteriorate as negotiations drag on and perhaps break down. In preparation, many of America’s larger importers have started to shift inbound goods from the West Coast.

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In an interview with Bloomberg News, WTO Director-General Ngozi Okonjo-Iweala shared some less than positive insights into the future of trade. In his words, the outlook for global trade is “not promising.” In part, this is due to the risky condition of the world’s economy, Russia’s ongoing war with Ukraine, shipping bottlenecks, China’s Zero COVID policy, and extreme weather events.

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And finally, those in procurement are struggling—just like everyone else in the industry. On top of challenges like the war, labor issues, the economy, and more, there are some new policies and regulations—either proposed or already in place—that are making things even more challenging.

Specifically, policies that will force everyone to collect and report data on Scope 3 emissions that are tied to the supply chain. Doing so will be very costly—and so will the fines or penalties for non-compliance.

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August 2022 Freight Forwarder Update

Peak season is upon us—just when the supply chain has new issues to deal with.

Forwarders and their shipper customers will continue to face fallout from new pressures that are expected to continue into the first quarter of 2023.

First, heat waves in China have the government there shutting down key manufacturing and imposing power cuts to reduce energy consumption. Add ongoing labor disputes in Germany that have already created a significant backlog—and more strikes are expected—and it’s a recipe for a troublesome peak season.

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More news from China.

The China-Europe route is experiencing a spike in rail system volume. The increase is largely due to port congestion, which is translating into an increase in trucking options.

A report from the China State Railway Group shows there were 1,517 Silk Road trains running in July, which is an 11% year-on-year increase. Volume is up by 12%.

Click to Read: the Full Article

Labor tension in the UK continues as mediation talks between unions and workers at the Felixstowe container port have broken down. On August 21, 1,900 port staff and employees walked off their jobs, in a strike that is expected to cripple the port. Union officials predict that “it [the strike] will generate massive shockwaves throughout the UK’s supply chain.”

As the largest port in the UK, Felixstowe handles nearly half of all imports into the UK.

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Good news out of the air cargo industry. Despite ongoing issues—some that predate the pandemic, and now the war—it was a great year for many. 23, to be exact. These carriers and service providers achieved the Quest for Quality Gold award in the Air Express category this year in the face of many challenges and maintained world-class service levels.

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Finally, the most recent Port Tracker report indicates that import volumes are down and expected to drop even further.

A survey of several US ports shows a significant drop in volume in June—although this is a comparison against May, which was a record month. And even with the decline, 2022 volumes remain above 2021 levels.

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July 2022 Freight Forwarder Update

Supply chains have dealt with unprecedented delays over the past few years, and while things are nowhere near back to normal, there was an increased level of anticipation that things were heading in the right direction.

It seems that hoped for future might not be in the cards thanks to new regulations around green shipping initiatives. Partly because shipping companies don’t have clear insights into what fuels to use in the future, so they’ll continue to operate using older vessels. If so, they need to make sure those vessels are more efficient, which could translate into lowering the speed they sail at—meaning slower shipping times.

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Shipping costs have soared since 2020, some reports saying as much as up to 300%, to the point where increased costs surpass the profit from goods. All of this started with the pandemic, but global tensions, such as Russia’s invasion of Ukraine, are making their mark on the industry. Nearly every European port has stopped handling containers to or from Russia.

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For some good—or at least better—news, the latest report from the ICC International Maritime Bureau (IMB) shows January to June 2022 has had the lowest incident rate of piracy since 1994.

The 58 incidents—compared to 68 in the same time period last year—included 55 boardings, two attempts, and a single hijack. However, it’s not the time to be complacent, given the high number of boardings, many of which were in the Gulf of Guinea as well as in the Singapore Strait.

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There’s been a lot of talk lately about super-sized container ships and a bigger is better mentality. But this year, at least in commodity trades, it’s smaller ships that are outperforming.

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Finally, in air cargo news, Shanghai is reporting that it’s business as usual for their airfreight market, despite another troubling rise in COVID numbers. However, delays could be an issue.

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June 2022 Freight Forwarder Update

Here are some of the top stories freight forwarders and shippers should be watching.

Early this month, the FMC released its final report on an investigation into container shipping throughout the pandemic. Commissioner Rebecca Dye has announced three new initiatives to help shippers. These are the International Ocean Shipping Supply Chain Program, reestablished Export Rapid Response Teams, and the designation of FMC Compliance Officers.

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Some ocean carriers are making a deeper dive into the air cargo business, specifically, CMA CGM and Maersk.

CMA CGM has received its air carrier certificate from the French Civil Aviation Authority and has 2 new Boeing 777 freighters to get them up and flying from their new base of operations at the Paris-Charles de Gaulle International Airport (CDG). They hope to double their air fleet of 6 by 2025.

As for Maersk, they have finalized the acquisition of a $644 million freight forwarding company, Senator International, based in Hamburg, Germany. The company specializes in business air freight shipments.

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You’ve probably heard that Amazon has finally launched its drone delivery service, but what does this mean for the shipping industry at large? Some feel that it could significantly change the industry and that the drone market will triple by the end of 2024. When you consider that drones are eco-friendly and can carry a maximum capacity of 4,500 pounds, they may be right.

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So who’s to blame for US inflation? According to President Joe Biden, it’s the global shipping alliances. These three alliances control about 80% of the world’s shipping container capacity and according to Biden, over the last few years they’ve raised their prices by as much as 1000%, which he says is a “rip-off.”

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Finally, chokepoints have been identified as another vulnerability in the supply chain. Chokepoints in shipping lanes are both man-made and natural, and since about 90% of trade goods traveled by ocean, a lot of it vital supplies, they represent a valid concern. Especially since shipping is a significant factor in the global economy.

Goods can travel through multiple connected chokepoints across global supply chains. If one is blocked, others can be affected—and they can be affected by a variety of situations. These include terrorism, cyber events, political and military campaigns, and more.

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May 2022 Freight Forwarder Update

Here is the latest news freight forwarders need to know.

As if things aren’t bad enough, the shipping industry is facing another threat, at least according to the 2022 Safety and Shipping Review by Allianz Global. The annual review analyzes incidents over 100 gross tons and assesses future risk challenges.

Despite the fact that total losses declined in 2021, the number of shipping casualties or incidents rose. In total, there were more than 3000 incidents, including machinery, collision, and fire damages.

The war in Ukraine, results from the shipping boom, which includes port congestion and extended working life of vessels, add further pressure.

Click to Read: Shipping Losses Decline, but Emerging Risks Challenge Industry

Indicators point to a slowdown in the shipping industry later this year. Still reeling from the turmoil of the last two years, supply chains are dealing with an unusually strong start to the year. But thanks to the ongoing war in Ukraine and China’s COVID-19 restrictions, the industry is facing further pressure.

And it doesn’t stop there. A weakening global economy plus the above-mentioned issues will slow industry growth and delay any significant recovery in supply chains.

Click to Read: Global Shipping Trims the Sails Heading into Economic Slowdown

A year-long commitment—a Memorandum of Understanding (MOU)—has been signed between the International Chamber of Shipping (ICS) and the Suez Canal Authority (SCA).

The two parties have agreed to increase the amount of information shared and their negotiations on how global trade moves through the Canal. It will also address issues such as toll pricing, environmental protections, and decarbonization.

Click to Read: International Chamber of Shipping and Suez Canal Authority Sign Landmark Agreement to Enhance Cooperation

Going, going . . .  green.

There’s lots of legislation in place to meet environmental goals in the industry, however, new milestones may soon be met. The European Union Parliament’s environmental committee is voting on the inclusion of shipping in the EU’s carbon market, with potential ratification by the end of June.

Click to Read: Another Important Week in Shaping International Green Shipping Legislation Gets Underway

Rising fuel prices could soon impact everyone. With a jump of 51% in the price of diesel since the beginning of the year, economists are warning of the possibility of a US recession in 2023.

It’s expected that at some point in the near future the higher cost of fuel will be rolled into the price of all consumer purchases, including groceries

Click Here: The Climbing Price of Diesel Is Raising the Risk of a Recession

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Freight Forwarders – Which of These 5 Problems Is Costing You Money?

As a freight forwarder, you know the logistics marketplace is competitive and very price-driven. This means any opportunity to improve your margins is a good thing. You also understand everything in shipping is urgent, making time yet another constant pressure on you and your company’s operations.

You might not face all 5 of these problems—but chances are you’ll be very familiar with at least a few. Just fixing one of the following can provide a massive boost in productivity to your operations. What you need is the best freight forwarding software to get you on the right track.

Problem #1: Taking Too Long to Quote

You get a request for pricing regarding a multi-modal freight movement, and they need it yesterday. Without a process to access and calculate all-in rates, it can take hours or days to get back to the customer.

Chances are, in that time, the customer has spoken to other freight forwarders and received at least a few competitor quotes. Many times, it’s the first to quote that wins the business.

Problem #2: Freight Rates Aren’t Current

Speaking of quoting customers, to do that correctly, you need accurate rate information.

Yet, in logistics, you’re usually dealing with tariffs that are already obsolete. That’s not because most logistics people are lazy, but because freight rates (especially ocean tariffs) change every few weeks or months. This makes calculating freight costs accurately impossible if you don’t have the latest rates available.

Problem #3: Cannot Balance Cost and Service

Sometimes, the lowest cost options do not lead to the best solution. Many forwarders quote higher for shipments than they should and with longer transit times than necessary.

This is mainly because they can’t easily determine what the best options are. A process to optimize cost and service when quoting customers is important to putting your best foot forward and winning more business.

Problem #4: No Centralized System for Managing Freight

If you have multiple locations that exist as separate operations from a rate and contract management standpoint, you’re losing efficiency.

This is because it probably means you’re also managing separate carrier tariffs and operating under different procedures—and in many cases, doing the same work twice for no gain. A centrally managed, single software to handle freight rate management will give you better control and consistency.

Problem #5: Losing Money on Invoice Errors

Shipping generates a lot of invoices—and messy ones at that. It’s a necessary portion of the business, but never an enjoyable one.

There are regular overcharges and other errors that are common on freight invoices. But unless you’re investing staff time into reviewing them, or have a system that automatically checks for errors, you might as well have a hole in your pocket.

GAMA Tools Solves These Problems

Instant quotes. The ability to compare all-in rates for any freight move with 99.7% accuracy. A centralized system so you can manage ALL your freight rates and contracts, plus a process that checks invoices for inaccuracies.

It’s easy to see how these tools instantly eliminate all the above problems and provide incredible cost savings for your business.

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How To Pick the Right System for Your Logistics Technology Stack

Today’s leading companies have come to recognize the value and growth logistics technology can bring to their shipping operations. Even the most progressive companies, however, may fail to understand how adopting a comprehensive, automated solution extends beyond simply integrating a standard TMS.

While a TMS can offer a wide range of benefits on its own, improving service, keeping your customers happy, and staying ahead of the competition often requires a unique combination of many different tools. This is where your logistics technology stack comes into play because data is key. If you want to maximize the use you get out of your TMS and completely alter your end users’ experience for the better, you’ll need to look outside of your existing system for additional opportunities that can provide richer data sources and other useful functions.

Filling in the Blanks

Thanks to modern pre-built API and EDI connections shippers are now able to easily integrate a variety of data points ranging from up-to-date tracking information, to reliable capacity, to accurate rates. At the end of the day, a TMS can be pretty powerful, but without the right data to back it up, you could be leaving room for significant gaps within your supply chain processes. Specialized logistics technologies help to solve for this lack of visibility by filling in the blanks that are critical to a shipper’s success.

The best shipping software will get you a lot more than lower rates, including simplified online booking, hassle-free invoice payment options, real-time tracking, data-driven decision making, and optimized workflow digitization. And with the resources that are currently out there on the market, achieving all of this is a lot less complicated than many people tend to assume.

The reputation new technology integrations have within this industry of being costly or time consuming is far from the truth. This wasn’t always the case, but sharing data between systems is much easier now with the support of consistently evolving technology that prioritizes ease of use and enables advanced communication. Logistics technology providers want to deliver a seamless user interface just as much as shippers and their customers want to experience one.

Here are some of top applications shippers need to keep an eye out for an immediate ROI:

  • Real-time freight tracking
  • Top-of-the-line CRM solutions
  • Dynamic contract rates
  • API or EDI connectivity

A TMS is a fundamental tool and a great start to building an ideal technology stack, but it’s also become the bare minimum. As logistics technology continues to advance, creating a balanced blend of software solutions can actually be fairly affordable for most companies. Smart shippers know that it takes more than just the basics to wow their customers, but they may not know how to identify the investments that’ll get their unique business the optimal results. Don’t worry though—that’s why we’re here. Click here to learn more about how GAMA’s software can help shippers cut costs, minimize mistakes, and increase efficiency.

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Here’s Why Every Freight Forwarder Needs a Comprehensive Customer Rate Inquiry Tool

GAMA’s leading Rate Inquiry Tool allows a forwarder’s shipper customers to submit rate requests directly to you, simplifying the entire process.

The tool is about more than just providing rates, however. It is a powerful, centralized platform that improves rate and cost management for both forwarders and their customers.

For shippers, GAMA’s advanced technology provides a way for customers to collect valuable logistics data and turn that information into actionable KPIs for their organization. The features will not only provide more visibility into their supply chain operations but drive more efficiency and savings for them as well.

For forwarders, it’s a way to better manage rates and margins, as well as communicate with agents, vendors, and other supply chain partners in one convenient location.

Here are some details on how it works:

The process and user interface are simple to understand. After your shipper customer selects the mode of transportation and identifies the general services their freight requires, the next section (titled Cargo Details) offers a place to specify cargo dimensions and special equipment needs. To complete a request, users can check any other box listed under Additional Services to ensure all shipment details and requirements are accounted for.

From your perspective as a forwarder, GAMA provides complete control in very important ways. Administrators have access to every rate request pending vendor and customer input. By gaining transparency into each individual request submitted by all of your clients who utilize this tool, you can leverage newfound insight into the customer quoting process.

On top of having the ability to immediately select and send cost requests to your agents and other individuals throughout your vendor network, our Suggested Vendors screen also automatically pulls information from your saved vendor database. Choosing the most suited agent for a job is made simple, so you can be assured your customers are receiving the best rates and service options available.

Here are some additional GAMA feature highlights for freight forwarders:

  • Build your customer’s rate based on the info provided in the Rate from Vendor section
  • Search carrier vessel schedules to offer up-to-date sailing data
  • Add any necessary markups based on either percentage or value and apply them to the selected lines
  • Create Quote Templates that include a place for you to identify varying types of charges and your company’s own fees
  • View the total amount broken down into buy/sell rates as well as the expected profit per agent submission

From allowing you to submit all vendor rate and service options for your customer to select the one that works best for their business, to offering a complete breakdown of charges and feedback, to providing total transparency to your customer base, to enabling you to instantly book shipments online with the Look-to-Book feature, GAMA’s customer Rate Inquiry Tool will strengthen your customer relationships and improve the profitability of your forwarding operations.

Visit GAMA to learn more.

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How To Identify Online Self-Service Freight Management Portals That Guarantee an Immediate ROI

Transparency and reliability are two of the most important qualities freight forwarding operations need to have in order for forwarders to meet the rising expectations of today’s marketplace and effectively manage a post-pandemic shipping environment. When the only thing that’s certain about the new supply chain norm is how uncertain we are about what lies ahead, it’s crucial to be able to differentiate your services and keep your customers satisfied.

This is why more and more forwarders are adopting online self-service freight management portals that offer customers and other users direct visibility and access to rates, shipment information, and important documentation. Given how many variations of these software platforms there are currently on the market, here are some of the top functions logistics professionals need to look out for to ensure they’ll get the most value out of these tech investments:

• Instant access to competitive contract rates

International shipping rates are always complex. Managing rates and keeping on top of surcharges and fees that are constantly changing is impossible without the right system to oversee it all. Search for an ocean freight management system that will deliver the competitive contract rate transparency you need, as well as the ability to create accurate quotes in real time.

• State-of-the-art customer relationship management services

You don’t want to waste your time on customer information that’s not current or accurate. This specific feature can help forwarders prioritize the right people by ensuring their data is up-to-date and automating most of their basic administrative processes. Since data entry no longer has to be so time-consuming, you can help your business avoid having to devote valuable company resources to more simple tasks, like sending follow-up emails or scheduling calls.

• Seamless API/EDI-enabled integration process

Some freight forwarding software may need additional support from third-party systems, which is why you should verify whether or not the technology can be easily integrated with other software. It’s critical that forwarders trust the reliability of their freight management systems because no one wants to be stuck with something that’s a nightmare to implement.

• Real-time tracking capabilities

It’s essential to know where your freight is and when it will arrive. Keep in mind that all freight management systems don’t have the same level of real-time tracking capabilities. For example, software with basic tracking functions may still require you to manually add and check freight information. More sophisticated software, however, can notify you and your customers of important updates without any effort on your part.

Investing a little into the right software for your freight forwarding company can go a long way. Don’t take too much time to debate over this decision, however, because you’ll only get left behind by the competition. Once you integrate a solution that’s capable of managing all of your forwarding needs, the ROI will follow soon after.

Click here to learn more about how leading software solutions like GAMA’s can help you enhance the customer experience by reducing errors, cutting costs, and increasing productivity.

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Five Challenges Facing Freight Forwarders Today

Freight forwarders need to be as concerned about the future as any other type of company—there’s a lot happening in the shipping industry these days. In fact, it’s hard to think of another industry facing more uncertainty considering the number of macro-trends happening with global supply chains right now. These challenges include everything from the pandemic fall-out to the impact of technology.

Macro and global issues aside, there’s also plenty going on within the industry that freight forwarders should be watching.

Here are five important things happening right now.

Competition Is Fierce and Growing

Freight forwarders are facing stiffer competition than ever. Part of the reason is that many logistics service providers that have defined themselves as something else (such as an ocean carrier, or even a warehousing company, for example) are also providing forwarding and NVOCC-type services.

It seems even Amazon is getting in the game—which leads us to:

Commoditization Is Unavoidable

Shippers often view transportation as a commodity. All most care about is that deliveries are made. So, they place a small amount of value on service and a lot on the price. This makes it hard for logistics service providers of any type to differentiate themselves from others—especially when there are typically a few who’ll simply try to win on price alone. Some forwarders are learning they can better compete by offering new or better technology that improves the customer experience.

Ocean Freight Market Volatility

Ocean shipping is a central part of what forwarders do and the value they provide to customers. As the last year has shown, ocean freight is also a very unstable business. It’s based on complicated rates and contracts, that in some cases, take an actual expert to understand. The result is that even forwarders find it hard to understand their cost structure—which, in turn, makes it even harder to provide customers with accurate and reliable quotes. And the seemingly random nature of price increases and surcharges only exacerbates the challenge for all companies.

Bid’s and RFX’s

Many forwarders also rely on tenders as a source of new business. Because the volume of these bids can often be extremely high and complex, tenders take a lot of time and resources. Forwarders who are on the leading edge focus on improving their internal process to make sure they can bid accurately and quickly while placing the most attention on the best types of business for them.

Rates of Change

There are always new market challenges that providers need to be accounting for. An example that many could say has made the pandemic even more disruptive for supply chains is the trend for ocean carriers to form alliances. Today, with almost no notice, the rates and contracts forwarders have with the carriers can change, as well as their service.

The good news is that logistics technology, when applied correctly, can change how forwarders manage their business and service their customers.

As the industry sits today, freight forwarders need to work hard to make their company stand out. The leading NVO’s and forwarders know that competitive rates matter, but so does providing customers with more and better service options and technology that creates a positive customer experience.