By Hime Wang      photo : rawpixel.com

Regarding freight transportation management system, obstacles met starting from the design/development stage to the practical operation, and why in the foreseeable future manpower is still extremely important for freight forwarders.

A freight forwarding software system helps companies manage the receipt, storage, and delivery of cargo in real-time, also known as a transportation Management System. Many of the processes in a TMS are still performed manually. Only the top 3 freight forwarding companies have such a robust system with global coverage. Those are Fedex, UPS, and DHL. They control 34% of the global market cap. The big 3 have the ability to barcode, GPS track, and EDI integrate the majority of cargo they handle. FlexPort is a newcomer to this field but their market cap is around $2 billion. The other players such as DB Schenker, DSV, XPO, Expeditors...etc. also have such systems but either aren't as vertically integrated (ie. tracking inventory in a 3PL warehouse) or don't have the global coverage. The biggest challenge to these systems is tracking shipments at the inventory level when say container loads are sorted into pallets, pallets sorted into cartons, cartons rebuilt into new pallets, and new pallets shipped out using a different modal. That's why a 5PL market exist to offer enterprise resource planning systems to, not the freight forwarder, but their big ticket customers.

Every movement of a good in a supply chain is practically in isolation, a single transaction. Party A contracts Party B to move a ‘good’ from Location X to Location Y. The Issue is that there is effectively no supply chain that is between just two parties, there are several, and they all have different contracts with each other, they all operate differently, have different customers and priorities, they all have different systems and share information differently. They also perform at different levels, some are sophisticated and leverage technology, others run on paper, while some are reliable and others less so in the same way that some are expensive and some are cheap. This is the reality and limitation of freight forwarding systems, and over 100 tech companies chase that dragon every year and fail because computer system can’t grasp the complexity.

Global forwarding is still human to human business. Even though the global market value of the giant website mentioned in the article is astonishing 34%, and they have relatively complete systems, why are there still a dazzling array of agency companies that we can choose from, and make up the remaining 66%? Our company deeply understands that customers have a priority when choosing freight, whether it is on money or time. In addition to the difficulties mentioned above, the computer system lacks the temperature and sensitivity that a real person can truly take the customer as the starting point. Therefore, a company can touch the hearts of customers will not be replaced in the foreseeable future.

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