Why Freight rates management is so complicated?

Jannie Delucca

Freight rate management is very difficult. Proces jest pracochłonny i czasochłonny. The process is labor and time consuming. The low degree of automation makes it also susceptible to manual errors. This is one of the main reasons why the industry is not growing as dynamically as it could.

Why is freight rate management so complicated? Are there ways to improve this process?

Supply and demand

Many different factors affect the final freight rate. But when you analyze the actual composition you will notice that majority of them doesn’t change. the one that makes ratre volatile is the Basic Freight (BAS). Why? The main reason is the difference between supply and demand. 

International trade is susceptible to fluctuations. As a result, the demand for sea transport varies over time and his is reflected in the rates offered by the carriers. In the case of supply advantage, the rates decrease. However, the dominance of supply causes their immediate increase.

Benefits of using freight rates management software

Since the supply and demand are almost impossible to control it’s very necessary to use right tools to manage freight rates. Otherwise all rates provided by the carriers must be checked manually by freight forwarder employees. Only after a thorough analysis is it possible to make a quote and send it to the client. It takes a long time and is very labor consuming.

As the result freight forwarders sales people don’t have time to acquire new customers and develop relationship with the existing ones. Their main task is to check rates and prepare quotes. Therefore, the logistics industry is characterized by very low conversion and loyalty of customers. 

Automating the freight quote process allows you to reduce most of the problems associated with changing rates. Modern freight rates management software means that sellers do not have to spend most of their time browsing excel sheets and calculating offers manually. They receive instant quotes that they can instantly send to customers. The time saved can be spent on handling more queries and building customer relationships, analyzing the market situation, observing competition and other tasks necessary to achieve sales goals.

The logistics software also supports sales team managers. Thanks to automatic reports available in real time, they can monitor team results and take appropriate corrective actions. They can use the data to implement incentive systems. They can also draw conclusions about training needs and build employees’ competences necessary to meet sales targets. There are many benefits. And their use depends on the creativity of managers and the needs of the organization.

The freight rate management systems also allow you to control your profitability. Thanks to technology it is possible to analyze the commission on an ongoing basis and determine its appropriate level. This gives the company a competitive advantage, thanks to which it can acquire new customers and develop profitable cooperation with existing ones.

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