27 Apr The Future of Integration: Possibilities
Over the past three decades, international organizations have gone through a groundbreaking evolution in their shipping and merchandising processes with the introduction of technology in logistics. As the world grew more globalized each period of time, so did the advancement of technology. This shift necessitated supply chain services and freight forwarders to enhance their adaptability strategies and come up with innovative ways to ensure direct, two-way communication models to be provided for stakeholders.
This brings us to the first question in mind: which major parties are continuously involved in freight management, and how can one guarantee customer satisfaction on both ends of the supply chain channel?
Until 2014, investment in technology for logistics and supply chain operations was very little. McKinsey and Company concluded that less than $1 billion was pumped into logistics funding before that time. Following this phase, funding gradually increased and then skyrocketed in 2018 to $4.7 billion. The IT industry was now seen as less of an assistant and more of the spine of supply chain operations around the globe. Freight forwarding involves an interconnected network of stakeholders with a multitude of visions and interests, such as importers, exporters, customs, shipping lines, airlines, and truckers. What the intervention of IT does here is to cater to all these groups’ needs by automatically providing accurate data about cargo progress by the minute. This includes shipment information, sailing and flight schedules for sea and air shipments, and tracking data.
Till this day, the most advanced means of integration available is between freight forwarders and airlines, since airlines in most parts of the world operate under the Warsaw Convention established in 1929 which sets liability limits to the air carrier. This agreement provides a universal code for all logistics operations to be performed according to one set of standards. The International Air Transport Association also encouraged this unification by creating the FHL and FWB standard formats for consolidated messages. For sea shipping, this reality differs as there aren’t any currently placed standards to be formally complied to. However, initiatives such as the Digital Container Shipping Association and the FIATA Standard Trade Documents Digital Library Specifications Working Group (in which LogistaaS is a member), and platforms like INTTRA are turning things around.
Another way freight forwarding can ensure successful integration with their stakeholders is through the utilization of cloud-based Transport (or Freight) Management Systems. Modern TMS are designed as a platform model, where shipment details flow from the freight forwarder in the country of origin to the one in the country of destination. These entail the status of shipments, shipment documents, and pricing information. With digital freight forwarding systems being increasingly made available, there is an increasing accessibility to all types of firms across all industries to use them for quality assurance and shipment management. In addition to that, a freight software’s interface supports customization of user requirements and specifications, which boosts customer satisfaction and adds value to the vendor-supplier relationship.
It doesn’t matter whether you’re running a transnational corporation or a small local business. Technological implementations in supply chain have undoubtedly turned complex, risky shipment processes into simple, lean solutions that everyone can benefit from.