How to choose the right freight forwarding software?
Updated: Jul 19
With so many freight forwarding software solutions in the market, choosing the right freight forwarding software can be very difficult especially if freight forwarders do not know what they are looking for. To ensure a successful selection of the right freight forwarding software, freight forwarders need to adopt a comprehensive approach towards their freight software search which goes beyond budget. This article aims to explain the various criteria and steps to consider when choosing a freight forwarding software (or any software in general).
1) Focus on digital strategy instead of procurement
Freight forwarders need to understand that the freight software search is not as simple as coming up with a few criteria (e.g. budget) and sending out request for quotation (RFQs) - it requires strategic planning and execution. Digital Strategies are different from traditional business strategies in the sense that digital strategies require the weaving of the right technologies into the business model to realize planned objectives. Freight forwarders who do not have any internal resources who are skilled in digital strategy should not attempt to do it themselves as they would end up wasting a lot of time, money and be disappointed should the digital projects fail.
One great way to approach the freight software search process would be to engage a Chief Digital Officer. In an ideal business environment, the process of software search and evaluation is usually undertaken by the Chief Digital Officer (CDO) who is a seasoned general manager experienced with strategic planning and execution of technologies to transform the company’s traditional business into a digital one. However, depending on the stage of the business, most small-medium businesses simply cannot afford to hire a Chief Digital Officer due to the following reasons:
SMEs view the Chief Digital Officer position as a cost rather than an investment
SMEs lack the budget to hire a Chief Digital Officer
SMEs have an unclear understanding of the roles and responsibilities of a Chief Digital Officer
2) Work with the right digital consultant
An alternative to hiring a Chief Digital Officer would be to work together with a digital consultant to formulate a digital strategy, identify business objectives, analyze operational challenges, create requirements specifications and oversee the software search and implementation process. When evaluating consultants on digital projects, it is important to consider the following criteria:
Hands-on experience over Academia: You need a consultant that has hands-on experience solving the operational challenges you face over someone who has an MBA or multiple certifications with no proven field experience
Business Owner Experience: It would be good to engage a consultant who has built his/her own small-medium business from scratch and experienced/overcame similar challenges as the ones you have from a business owner, middle management and employee perspective. Such consultants are able to view issues from both macro and micro perspective which is an essential trait when solving business challenges
Business Size Consulting Experience: You need a consultant who has consulting experience with small-medium sized businesses. As the typical resources and struggles SMEs face differ a lot from that of MNCs, some solutions are just good on paper but not feasible in terms of implementation.
Transformational Leadership: You need a consultant who does not only implement strategies/technologies according to what you want but also recommends and challenges you when needed especially when a decision would negatively impact your upstream or downstream business functions
Technology Implementation Experience: You need a hands-on consultant who has experimented and implemented the various strategies and technologies that he/she recommends in his/her own business. Execution is the most difficult part of strategy and this experience should be considered when evaluating consultants
3) Document your objectives, challenges and requirements
To ensure successful selection of the right freight forwarding software, freight forwarders should work together with consultants to identify business objectives, analyze operational challenges, define software requirements and manage/execute the software implementation. There are typically 4 main stages when it comes to selecting the right freight forwarding software and the explanation of the type of activities and tasks involved at each stage is as follows:
Identifying Business Objectives
Identify the overall business objectives (e.g. Improve freight operational efficiency by 70%) and future state of the business should the freight software implementation be successful (e.g. improve collaboration amongst employees, quicker customer response rates, increased accuracy of shipping documentation etc.)
Identify key metrics that affect those business objectives (e.g. Average time taken to complete freight jobs, Time spent on data entry and document creation, Speed of response to customers, Digital-savviness of employees etc.)
Analyze Operational Challenges
Identify the current issues that are faced by the business and group them into three categories namely people, process and technology. Very often, the issue is combination of these
People - Are employees constantly making mistakes regardless of the presence of technology? Should you invest in retraining/upskilling or find replacements?
Process - Are there processes/SOPs in place? Are employees following the SOPs? How do employees communicate progress and escalate issues? How do you ensure employees follow SOPs?
Technology - Are the employees digitally-savvy? Do they know what a freight management system is? Have they used ERPs or CRMs before?
Defining Software Requirements
Based on identified Business Objectives and Operational Challenges, create a software requirements document outline the various functional modules that must be in the freight management system. Be as detailed as possible and don’t worry about how to group the various functions. Start brainstorming all the functions that you need. Based on best practices, each functional requirement should meet the following criteria:
Clear description of the role, goal and benefit of the function (e.g. As a freight executive, I want to easily generate a House Bill of Lading so that I can complete the required documentation for an ocean freight job.)
Business Rules (e.g. I must be logged in to the system and I should not be able to generate House Bill of Lading for a job that has already been completed)
Business Objective and Operational Challenge that the function maps to (e.g. By being able to generate the House Bill of Lading quickly, this reduces the document error rate, time taken to create shipping documents and contributes to improving freight operational efficiency by 70%)
Managing & Executing Software Implementation
Based on the software requirements document, you now have a clearer picture of exactly what you need in your freight management system for your business. Use your software requirements document as a checklist for evaluating various freight forwarding software in the market. The ideal freight forwarding software should meet at least 70-80% of your functional requirements.
If you find that the 20-30% of your functional requirements is not met by the freight forwarding software and this chunk of functions are crucial, you can either find a customizable freight management system or engage a custom software development agency to build your custom freight forwarding software project based on your requirements and preferences.
If traditional software development agencies are too costly, you can also consider low-code and no-code development agencies who are able to build your custom freight software project at a fraction of the time and cost required of traditional software development agencies.
Make sure you have someone who has managed IT projects to oversee the software implementation and ask the right questions. If you do not have the resource, consider engaging a digital consultant to manage the project for you.
If you have read to this point, you would understand that choosing the right freight forwarding software is not as easy as just shortlisting and picking one. Searching for the right freight forwarding software requires a deep and sound understanding of your operational challenges and most businesses struggle with this as they often identify the wrong problems to solve. Sending multiple RFQs (request for quotations), RFPs (request for proposals) based on poorly written requirements sets you up for disappointment as you would get unrealistic project estimates. Choosing the right freight forwarding software requires proper strategic planning and the best approach is to work with a digital consultant who understands the freight forwarding industry, processes and has solved similar operational challenges before.