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Smart logistics: How digital technologies are transforming freight forwarding

by Editorial Office

Coordinating and monitoring international supply chains and cross-border logistics is a challenge. Freight forwarders need to deal with different customs regulations, trade agreements and laws, while at the same time demands for environmentally friendly and sustainable transport solutions are rising. Freight forwarding is therefore increasingly using technology in order to simplify and streamline processes: Digital transformation has significantly changed the way goods are moved. We discuss how the different areas of freight management can be optimized with the help of digital solutions.

New technologies, networked supply chain participants, more exchange and communication: Modern supply chains are complex systems that connect a multitude of partners, service providers and customers in an overarching IT architecture. Processes have changed significantly, especially in the various phases of freight forwarding. Companies can benefit from the use of digital technologies at the operational as well as the tactical and strategic level. And yet, which solutions help to optimize workflows in which area?

Freight booking and transport planning – increasing order processing

Digitizing freight booking and transportation planning helps to speed up ordering processes, reduce errors and improve efficiency throughout the supply chain. Companies can use automated booking and processing programs in order to increase the efficiency and speed of freight orders. The integration of APIs (Application Programming Interfaces), for instance, enables direct access to the booking systems of freight forwarders or freight exchanges and the automatic creation and management of orders.

A transport management system (TMS) also contributes to the automation of the booking process: Freight orders, route planning, time slots and prices are coordinated and efficiently managed, thus enabling a faster and more accurate freight booking. In this context, key factors such as ideal means of transport, distance, fuel consumption or tolls are taken into account.

Document management – reducing errors through electronic transmission

Bills of lading, loading and packing lists, invoices, customs documents – document management plays an important role in freight forwarding, as a large number of important documents must always be at hand when transporting goods. Digital document management systems provide greater clarity: they enable companies to shorten processing times, increase accuracy and at the same time reduce paper consumption. For example, waybills can be created, transmitted and archived electronically, thus speeding up processes and reducing errors. In turn, the digital management of invoices and payments facilitates accounting and cash flow management. Information about the content, size, quantity and packaging of freight can also be accessed more quickly by all responsible parties if the documents are provided via digital networking. The same applies to customs, insurance or warehouse documents.

In addition to document management software (DMS), which stores, classifies and manages all documents, companies can use electronic signature solutions in order to make their processes more digital – thus eliminating the need for physical signatures and significantly speeding up the exchange of documents. Further, OCR (optical character recognition) technologies are helpful, as they enable the text of scanned or printed documents to be captured and searched for specific information. Cloud-based storage solutions give all authorized persons access to the relevant papers – regardless of location and device.

Data management – informed decisions based on data

The effective collection, processing, storage and use of data is essential for a smooth freight management. The quality of the data is crucial in this context, as incomplete or incorrect information can lead to disruptions in the entire value creation process. TMS or GPS tracking provide location data in real time and often transmit it to customers via regular updates. Digital technologies are used to ensure that all this data is put to good use.

ERP systems offer comprehensive data management and integration, even across different business units, while Big Data analyzes large volumes of freight data in order to provide insights into trends, bottlenecks, and efficiencies. This can help with route optimization, inventory management or pricing. AI models can also be used to generate demand forecasts, optimize transportation routes and identify bottlenecks in real time. The results help freight managers to make informed decisions based on data. Last but not least, blockchain, for example, can be used to ensure the integrity and security of freight data, especially in international supply chains.

Freight tracking – using technologies to monitor the location of goods

Networked sensors and devices are required for a successful freight tracking: For this matter, the Internet of Things (IoT) and track & trace systems are used to provide real-time information about the condition and location of freight. Further, barcodes or RFID (radio frequency identification) are applied to tag the goods. By scanning the tags, information on the position of the cargo can be retrieved.

The integration of a GPS or telematics system in trucks and transport vehicles, in turn, helps track vehicle performance, monitor the movement of goods, and ensure compliance with safety standards. At the same time, customers receive updated information about delivery times via email, SMS or apps.

Customs clearance – automated processes for creating the required documents

Digitized customs clearance facilitates cooperation with customs authorities and accelerates processes for international freight to enable legitimate import or export flows. Not only is correct and complete documentation with waybills, loading lists, insurances and certificates of origin relevant in this context, but also the determination of the correct customs rate, for which forwarders must correctly determine the goods category and value. Automated customs clearance software handles many of these processes, calculating duties and taxes and creating the required customs documents. Electronic customs clearance platforms are also often used as interfaces to facilitate the transmission of documents to the relevant customs authorities. 

In addition, EDI (Electronic Data Interchange) is a standard protocol for exchanging business documents between different IT systems. Blockchain technologies can be used to ensure the integrity of customs documents and transactions and prevent the manipulation of data in Customs Solutions. In this area, too, digital identification and electronic signature solutions ensure a significant acceleration of customs processes.

Conclusion: Freight Forwarding – increasing efficiency through digitization

Many freight forwarding processes must be perfectly aligned and coordinated in order to interlock seamlessly. Inaccurate or delayed information can lead to discrepancies in the processes of the entire supply chain. Whether route optimization, document management or customs clearance: Transparency, traceability and software-supported monitoring are essential for modern freight management with its endless flow of data. Companies that invest in digital technologies can not only save time and money by accelerating many processes, but also position themselves more future-proof and resilient with on-time deliveries and satisfied customers.

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