• Brendon Koh

How to automate freight forwarding documents?

The freight forwarding process is complex and requires different types of shipping documentation based on a few factors such as transport method (e.g air, sea, land), cargo load type (e.g. LTL, FTL, LCL, FCL), direction (e.g. import, export) just to name a few. This article aims to explain the freight forwarding documentation process, industry challenges and possible solutions that freight forwarders can adopt to automate freight forwarding documents. Read on to find out more.

1) Understanding freight documentation challenges

To date, despite many attempts to digitize and standardize freight documentation, many freight documentation processes are still done in a semi-manual way due to many reasons. One of the main reasons is the fragmented approach towards freight forwarding caused by multiple parties. Freight forwarding is a network-based business that requires freight forwarders to build physical relationships and trust with other freight forwarders across the world to enable efficient import/export freight operations. Despite the trust and relationship established, most freight forwarders have their own way of managing freight forwarding documentation. Some freight forwarders have an in-house ERP System or Freight Management System (FMS) to create freight documents while others create freight documentation manually on Microsoft Excel and Word. The default communication mode for most freight forwarding documentation is via email. While some freight documentation require strict adherence to an international format/template (e.g. Neutral Air Waybill), there are other freight documentation (e.g. House Air Waybill, House Bill of Lading, Delivery Order, Pickup Note) that do not follow any specific format/templates and are defined by the freight forwarders themselves. Despite decades of attempts to digitalise the creation and exchange/communication of freight forwarding documentation, many freight forwarders still prefer to do things ‘manually’ because of 3 main reasons:

  • Reason 1: Freight forwarders need the flexibility of customizing document templates to their needs and preferences

  • Reason 2: Freight forwarders need to ‘connect’ or associate generated freight documents to customer jobs which are usually residing in their ERP or Freight Management System

  • Reason 3: Freight forwarders do not want to use or depend on too many different IT applications/systems to manage their freight forwarding operations. Freight forwarders prefer all-in-one, customisable solutions to manage all aspects of their business and since ready-made solutions are usually not as flexible as advertised and custom-built traditional development is too costly, they fall back and make do with their existing legacy ERP, Freight Management System, Microsoft Excel and Word to manage their freight forwarding operations

While there are many freight forwarding software solutions in the market, most of them solve only specific parts of the problem which is myopic as they do not address the end-to-end solution requirements that many freight forwarders have. Essentially, freight forwarders need the freight forwarding documentation process to be built as a module inside their existing ERP or Freight Management System rather than integrate with an external system that only generates freight documentation. The two key challenges that freight forwarders face when it comes to freight forwarding software implementation is as follows:

  • Not all ERPs or Freight Management Systems are customizable

  • Changes to custom-built applications that were ‘hand-coded’ or built in the past can be expensive and time-consuming

2) Understanding the different types of freight documentation in the market

In each freight job, there are many different types of freight documents that need to be created and submitted to various parties depending on the job type. The picture above shows some examples of documents that must be generated according to the job type. The typical freight documents that are generated are as follows:

  • Booking Confirmation: Document generated to be sent to customer for confirmation of booking. At this stage, there might still be some data that is yet to be provided by the customer (e.g. Port of Loading, Port of Discharge, package details etc.)

  • Arrival Notice: Document to notify customer on arrival of shipment at destination

  • Air Waybill: Document containing shipment and job details for freight transport by Air

  • Bill of Lading: Document containing shipment and job details for freight transport by Sea

  • Authorization Release Document: Document containing authorization release to inform customs on specific haulier(s) that are authorized to haul shipments on the freight forwarder’s behalf

  • Delivery Order: Document containing delivery instructions to customer’s final destination (e.g. warehouse or office) usually for import jobs

  • Pickup Note: Document containing pickup instructions for overseas haulier (e.g. sea port or airport) usually for export jobs

  • Consolidation Manifest Document: Document containing list of all customers and packages for consolidated jobs usually for air or sea consolidated jobs

For freight shipping executives who are new to the industry, knowing which freight documents to generate based on the job type and what kind of information to be keyed into the various document templates can be challenging and stressful. Fortunately, with customizable freight forwarding software solutions like Forward FMS, freight forwarders do not need to spend too much time on user training as the software would automatically hide/show the relevant documentation templates and data to fill in according to selected job type.

3) How to automate freight documents?

Without a Freight Management System to manage different document templates, freight document automation is almost impossible. With a customizable freight management system like Forward FMS, you only need to key in freight job details once and all documents can be generated within a click of a button. In the event where there are changes to the job details (e.g. shipper, consignee, packages etc), you can simply make the changes to the job details and re-generate the relevant freight documents within the click of a button. Without a freight document automation solution, freight documentation can be frustrating as you would have difficulty keeping track of document versions and knowing which ones to update and send to your customer.

In a nutshell

Freight forwarding documentation is one of the most time-consuming tasks that freight forwarders face. It is also the core of what freight forwarders do - to ensure that customers have all the necessary procedures and documents in place for a smooth and efficient shipment. While there are many freight document solutions in the market, many of them are fragmented and create system integration challenges. Beyond operational efficiency, with a centralized freight management system or what logistics professionals call a supply chain control tower, freight forwarders are able to leverage on the data collected to perform business analytics and drive greater revenue.

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