• Brendon Koh

What is a freight management system?

A freight management system is a cloud-based software solution that helps freight forwarders streamline freight forwarding operations, standardize shipping processes and manage their freight forwarding operations effectively and efficiently. A good freight management system should be cloud-based and customizable based on the business needs as every business manages operations differently. Freight management systems should make freight forwarding easier and less time-intensive since a lot of the manual freight forwarding processes and methods are replaced and automated with in-built functions present in freight management systems. The key to selecting a good freight management system lies in its flexibility for customization, ability to integrate with other systems and ease of migration.

Introduction to Freight Management System

Freight forwarders usually handle many types of freight operations data which include customers, jobs/bookings, shipment details and shipping documentation. Different shipment details and documentation are required depending on certain job attributes such as transport type (e.g. air, sea, land) or load type (FCL, LCL etc.) The most common way to manage all of this data is using a Microsoft Excel spreadsheet that functions as a ‘master list’ to track the list of customers, jobs and shipment details. Separately, shipping documentation templates (e.g. House BOL, House AWB, Arrival Notice, Booking Confirmation, Shipment Release etc.) are created using Microsoft Word. This approach might not be the most efficient when the freight operations increase to a sizable amount and more employees are hired because it is difficult to govern how different employees manage customer jobs/bookings due to a lack of a centralized system. Freight forwarders usually invest in a freight management system when their operations are in a mess, customer and job data is stored across emails and documents and employees are making mistakes on shipping documentation due to unexpected changes by customers.

How does a Freight Management System work?

A freight management system functions as a centralized software solution and serves as a centralized database and single source of truth. With a single system of record, employees can be assured that they will always be accessing the latest, up-to-date information be it customer or job data. Cloud-based freight management systems enable employees to access key information such as customer details (company and point of contact details), service charges (global list of service charges such as Import Permit Fee etc.), job details (shipper, consignee, transport type, origin, destination, weight, packages etc.) in real-time wherever they go. There are many freight management software in the market but most of them are built with generic functions to appeal to general masses and many freight forwarders would struggle with selecting the right freight management system when they compare functions across different solutions in the market. The most important functions that a good freight management system should minimally have are as follows:

  1. Global Search: Ability to search across entire system for jobs, customers, service charges etc.

  2. Job Management: Ability to manage different jobs (e.g. Air Import, Sea Import LCL, Sea Export FCL etc.)

  3. Job Details (e.g. Status, Job No, Job Datetime, Job Type, Job Transport, Job Direction, Freight Terms etc.)

  4. Parties Involved (e.g. Shipper, Consignee, Delivery Agent, Notify Party, Haulier etc.)

  5. Transport Information (e.g.HAWB/HBOL No, Origin Port/Seaport, Destination Port/Seaport, Flight Transit details)

  6. Package Details (e.g. Marks and Numbers, No. and kind of packages, description of packages and goods, CBM, Gross Weight, Chargeable Weight, Total Pieces, Total Gross Weight, Total Chargeable Weight etc.)

  7. Service Charge/Fee Details (e.g. Service Code, Service Charge Item, Unit Price, Qty, Sub-total, Vendor Company, Vendor Invoice No, Vendor Charge Amount etc.)

  8. Quotation Details (e.g. Quotation No, Quotation Date, Job No, Customer Company Name, Total Pieces, Total Gross Weight, Total Price before GST, GST Amount, Total Price after GST etc.)

  9. Invoice Details (e.g. Invoice No, Invoice Date, Job No, Customer Company Name, Total Pieces, Total Gross Weight, Total Price before GST, GST Amount, Total Price after GST etc.)

  10. Debit Note Details (e.g. Debit Note No, Debit Note Date, Job No, Customer Company Name, Total Pieces, Total Gross Weight, Total Price before GST, GST Amount, Total Price after GST etc.)

  11. Credit Note Details (e.g. Credit Note No, Credit Note Date, Job No, Customer Company Name, Total Pieces, Total Gross Weight, Total Price before GST, GST Amount, Total Price after GST etc.)

  12. Document Template Editor: Editing of various document templates (e.g. house air waybill, bill of lading, arrival notice etc.)

  13. Sales Document Generation: Generation of Quotation, Invoice, Debit Note, Credit Note

  14. Shipping Document Generation: Generation of documents according to job transport type e.g. House Air Waybill, House Bill of Lading, Arrival Notice, Delivery Order, Air Consolidation Manifest etc.

  15. Customer Management: Centralized list of customers

  16. Service Charges Configuration: Centralized list of service charges/fees applied during job costing

  17. Report Dashboard: Analytical Reports for data-driven decision making

  18. Job Analysis Report

  19. Service Charges Report

  20. Creditor Ageing Report

  21. Debtor Ageing Report

  22. Profit & Loss Report

  23. Accounting Management: Tracking of account groups, individual accounts and ledgers

What are the benefits of having a freight management system?

There are many benefits of investing in a freight management system. Freight forwarders who move from excel spreadsheets and documents to a centralized freight management system tend to experience at least 70% increase in operational efficiency. Some of the benefits of having a freight management system are as follows:

  • Simple cloud-based setup that removes need for physical servers to be installed on-site as everything can be accessed remotely via a web browser

  • Single system to manage multiple freight job transport types (air, sea, land)

  • Consolidated job/shipment data that can be flexibly updated based on any changes to the shipment by the customer

  • Improved communication and collaboration due to real-time, up-to-date information being presented

  • Easy-to-read dashboards and reports that provide insights to enable data-driven decision making

Final Thoughts

A customizable freight management system would definitely be a great investment for freight forwarders as it optimizes freight forwarding operations and enables things to be done in a better, faster and more efficient manner. The biggest challenge for freight forwarders is finding the right freight management system that is based on their business requirements. When it comes to choosing the right freight management system, most freight forwarders have a difficult time identifying what functions they need and tend to explore different software solutions and getting stuck due to the information overload simply because they are searching for a software solution without identifying the right problems and functional needs. Most freight forwarders do not have the time or expertise to define their business requirements, operational needs and day-to-day workflows. This is when partnering together with a software development agency specialized in freight forwarding makes sense. By doing so, freight forwarders can speed up the process of gathering requirements, developing the freight management solution and making sure that the software solves the operational challenges on hand and adapts to their requirements instead of the other way round.

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