Freight forwarders and their shipper customers face a challenging operating environment, with geopolitical unrest, high inflation, port closures and other physical and political trials. In the face of these challenges, shippers want to be even more flexible and vigilant.

The situation is driving renewed interest by freight forwarders in ways to improve their shipment visibility and customer experience. As supply chains grow more intricate and consumer expectations increase, the ability to track and monitor shipments in real time becomes a crucial component for forwarders striving to maintain a competitive edge.

Traditionally, the logistics industry has been plagued by a lack of automation, with reliance on manual, paper-based systems for tracking shipping status and setting pricing, and no way to obtain real-time updates. 

In this environment, shipment visibility requires forwarders to manually access websites for each carrier, rail and terminal, as well as the automatic identification system (AIS) website for the vessel’s location. At each of these sites, they must enter bills of lading for every shipment. Only then are they able to report back to the customer. It's a time-consuming process, one that’s fraught with the potential for data entry errors.

The use of internet of things (IoT) sensors with cloud data storage has made possible revolutionary changes to shipment visibility and reporting. Through the integration of GPS tracking, sensors and advanced analytics, freight forwarders can now offer clients up-to-the-minute information on the location, condition and estimated arrival times of their goods. 

This level of detail builds trust with customers, while allowing forwarders to optimize routes, reduce delays, manage resources more effectively, and engage in proactive problem-solving in the event of customs delays, weather disruptions or port congestion. 

There are a number of software applications from multiple vendors that use data from the cloud to provide expanded visibility into shipment progress. They range from custom software development to cloud-based software-as-a-service (SaaS) options. 

But the industry has been slow to adopt. While precise market figures are hard to come by, it’s estimated that only about 20% of freight forwarders will have a visibility system in 2024.

To encourage the other 80% to consider this technology, here are two case studies of freight forwarders who adopted the technology, highlighting the benefits that it provided to their businesses.

Visibility as a Competitive Edge 

A freight forwarder with fewer than five employees was looking for a competitive edge that would enable it to grow. Management didn’t want to compete on price alone, and so invested in visibility software to allow it to offer shipment-status reports and real-time portal-access services. Customers liked this value-added information, which allowed the forwarder to command a slightly higher price in the market. The resulting customer satisfaction and extra margin has fueled the company’s growth to 25 people within 18 months.

Customer Retention by E-Mail

Another freight forwarder is more established, with a large ocean freight business, while also providing a full range of services including air freight, truck transportation, warehousing, customs brokerage clearance and cargo insurance. The company has been in business for over three decades, and now handles tens of thousands of shipments every month.

The forwarder heard from its customers that they wanted more shipment visibility, but enabling that across such a large customer base was a challenge. The company determined that e-mail was the best way to connect to customers with these updates. 

The company began an e-mail campaign, sending shipment reports automatically to all customers. More than 30,000 reports were e-mailed, with an open rate of 73%. The feedback led the forwarder to open a portal for customers to have direct access to shipment information. The result was a marked increase in customer retention.

Visibility software can help shippers weather the challenges that are now buffeting the industry, and lead to growth and profitable customer relationships. These two case studies show how shipment visibility provides improved customer retention, and a higher profit margin.

Trenton Chen is chief executive officer and co-founder of GoFreight.