4 Ways Logistics Technology Misses the Mark with International Shipping
As supply chains become more global and interconnected, so must the logistics technology that shippers and logistics service providers use. Yet, most supply chain technology is not built to handle the demands of international shipping. This creates inefficiencies at many stages of execution - creating risk and blind spots throughout the global shipment life-cycle.
Many companies try to make their existing operating and rate management systems work for international shipping by creating work arounds or attempting to connect disparate systems, but most still fall short. Here are 4 ways technology built for domestic shipping misses the mark.
Rate and Contract Management
Freight rates and contracts are much more complex in the global environment. A typical domestic shipment uses a single mode and carrier – while most international shipments utilize multiple carriers and modes. Moving across borders makes every shipment subject to complicated rules and regulations that govern export and import. Costs have to be calculated using multiple carriers’ rates and contracts while accounting for countless fees and surcharges (especially with ocean cargo).
Technology built for the relatively simple rate structure of domestic ground shipping is no match for the ever changing global shipping market place with its complex GRIs and surcharges. A rate and contract management platform built specifically for international shipping is required.
Arranging an international shipment is never a matter of a quick call or email as it is to schedule a typical truck load shipment. Global shipping involves extensive documentation, validation of sailing schedules, verifying space availability on the equipment, as well as countless other details.
Global logistics demands a booking platform that covers each of the highly specialized booking steps necessary for even the simplest international shipment.
Track and Trace
Getting a reliable status of a shipment is a challenge for every move – even domestic. Locating a single truck within the same city can be difficult. Pin-pointing the location of a container that has moved with multiple carriers between countries and across oceans is exponentially more challenging.
Track and trace technology for global shipping requires data connectivity. As shipments move from carrier to carrier its location and other important data must move along with it. A platform built for this type of complex data exchange and updates is a necessity.
Freight Invoice Audit
Overpaying on freight invoices is a big problem for shippers and freight forwarders a like. Similar to rate and contract management, accurately calculating freight costs is even more complex with international shipping. Estimates on the rate of errors run as high as 30% of the cost of each invoice.
The value of a proper and accurate freight invoice audit process is obvious. The requirements however, cannot be met by a simplistic process designed with domestic shipping in mind. The complexities of international rates and contracts demand a process that can stay up to date with global shipping surcharges, GRIs, and fees.
Shippers and logistics service providers need to evaluate their current logistics technology to make sure it can really support the demands of global shipping. Chances are it cannot, but there is no reason to settle.
The good news is many economical and scalable solutions exist to fill in the gaps. And, system and data interoperability has never been easier. This can allow new systems to be brought on as compliments, and not simply replacements for incumbent platforms. This keeps costs down, implementations easy, and IT happy.