The push for freight digitization has been underway for years, but COVID-19 accelerated the trend. It quickly became evident to shippers, carriers and drivers that moving pieces of paper along with the freight doesn’t make sense any longer. Therefore there is a strong business case for moving freight operations into the digital age.
Using the latest technology, consumers can place an order on a mobile device, pay for it, select a shipping option, track progress and receive the package without interacting with a person. The freight industry is progressing towards the same level of digitized transactions.
Technology has developed to the point where documentation like bills of lading and proof of delivery can be stored and communicated in the cloud. Truck drivers and shipping clerks have powerful wireless computers at their fingertips instead of moving paper on clipboards.
When a freight transaction is in a digital format, information about each shipment can move with, or ahead of, the actual movement of goods. Shippers and receivers can track and trace shipments without making a phone call, and receive alerts for any exceptions to the plan. At the same time, many tasks can be automated, such as freight bill auditing and payments.
As more and more companies adopt technology solutions, those companies that aren't connected will be left behind. They will still receive shipment updates by phone calls and emails, and lose shipments due to numbers being transposed on the bill of lading. Adopting technology supports a decentralized workforce as well because the information is available from almost any device.
A number of industry leaders are pushing for adoption of electronic bills of lading as the first step in digitizing the shipping process. Shippers and carriers that use eBoLs will allow for real-time communication and visibility. With the right solutions, carriers can provide last-mile updates to track the shipment up to the minute until delivery.
Shippers using a transportation management system can integrate freight data into their systems, improving communication with customers and carriers. With data available in a central dashboard, communications are automated, improving service and reducing costs.
Even though logistics may not be a company's core competency, investing in technology for shipping and warehouse applications is a wise move. The new levels of visibility available through solutions in the market provide real-time management and communication advantages. Shippers improve their velocity without adding assets. For example, traditional EDI 214s are usually batch updated overnight, so the data shared is hours behind reality.
Developing touch-less transactions helps keep employees safe. Every human touchpoint is an opportunity for error and takes up time. It takes a cultural shift for companies to realize they don't have to manually handle every bill of lading or freight bill. The majority of documentation moves through automated handling and only exceptions require personal attention. Shipping departments can stop scanning emails and other paper and focus on their business. Administrative and operational overhead declines as manual handling is replaced with error-free digital transactions.
Digitization is available upstream from shipping as well. Precision pricing tools are available that use APIs to link carriers and shippers with real-time pricing information. Shippers make data-driven decisions to select the most cost-effective route and carrier based on current information, and not depend only on contract rates or routing guides.
With deep visibility into their business, carriers develop incentives for specific lanes that support their goals. The annual RFP process can be greatly scaled back, and overhead for static table licenses can be eliminated. The top tier of LTL carriers that move about 95% of LTL freight offer API capability already, but many shippers are slow to take advantage of it.
Shippers who are already tapped into pricing APIs have experienced a typical 15-18% cost reduction compared to static routing guides. The most advanced users are seeing an additional 12% savings on their freight rates in about one-fourth of their shipments due to dynamic precision rates.
With deeper visibility into their logistics, companies are more agile and have the support for data-driven decision-making. They have a deeper understanding of their freight flow and identify trouble spots before they turn into choke points. Shippers that use real-time status information can automate transportation management processes to mitigate risks.
Ultimately, visibility plus automation equals cost savings. Improved efficiency boosts operating margins regardless of the rate environment. Enhanced visibility and communication builds sustainable customer relationships.
With data-driven analytics and decision-making, companies are positioned to compete. Find out how your company can “Capitalize on Freight Digitization” by downloading our guide.
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