The Benefits of Digitizing Freight & Logistics Processes
Digitalizing freight and logistics processes is easier said than done. It requires more than simply moving from paper to electronic formats or the ability to find and send information online. Today’s logistics teams must evolve and adapt to the current freight environment where emerging technologies play a fundamental role.
In this article, we'll explore why digitizing freight and logistics processes remains such a challenge at a time when everything else in the world has gone digital and then dive into why the benefits of digitizing freight and logistics processes make overcoming these challenges well worth the effort.
Top challenges in digitizing freight and logistics processes
Digitalization is transforming industries worldwide by creating efficiencies through automation, collaboration, and visibility. Logistics and supply chain is no exception, but there are specific challenges to digitizing freight processes, including:
Outdated manual practices
As with all industries before the Digital Age, freight and logistics historically relied on manual processes for day-to-day tasks such as booking, tracking, and managing international shipments. Unlike many other industries, however, freight and logistics teams have been slower to adopt digital processes, and many still manage a substantial amount of business over email and in spreadsheets. Considering international shipments require a large amount of documentation and paperwork, these manual processes are highly inefficient. They take substantial time and are prone to human error and lack oversight.
Fragmentation in the freight and logistics industry
The wide range of parties involved in international freight processes is perhaps the largest source of complexity when it comes to digitalization. Several dozen entities can be involved in a single shipment, including transport carriers, freight forwarders, shippers, suppliers, factories, terminals, dray providers, and customs brokers. And most of these entities operate across a variety of communications channels and a number of systems.
This fragmented, global network presents several challenges, including:
- Suppliers, agents, and transportation providers operate worldwide in various time zones, making communication and timely transfer of documentation difficult
- The various parties might utilize any number of technology solutions in an attempt to simplify their business processes and this network of disconnected systems creates a complicated web of information for forwarders and BCOs to navigate
- Each party has a different interest in the movement of goods, and each seeks to maintain margins in the process, often with limited cost transparency
Lack of visibility
Outdated practices and fragmented networks lead to poor communication between partners and create substantial obstacles to achieving supply chain visibility. Without a comprehensive view of order status and location, shippers and forwarders cannot identify underlying issues or hold vendors and carriers accountable for missteps. Additionally, they cannot proactively address problems or communicate potential delays without visibility, leading to customer dissatisfaction and deteriorating relationships. Freight forwarders and shippers must understand the value of complete supply chain visibility when considering logistics processes digitalization.
Getting started: digitizing information and digitalizing processes
Digitization and digitalization are more than buzzwords for logistics technology—they are solutions designed to help logistics teams and freight forwarders manage international shipments more efficiently. While the two words sound and look similar, organizations considering digitization and digitalization solutions need to understand what each offers.
Digitization is the process of converting analog data to a digital format. Think of scanning a photograph or PDF—digitization solutions read and encode the data into editable, workable formats, but they do not change or alter the actual data. Digitization increases labor efficiency and decreases human error by automating data entry tasks, but it does not provide data insights.
Digitalization is the use of digitization and other digital technologies (like blockchain, artificial intelligence, and machine learning) to transform business processes. Digitalization leverages digital information technology to optimize processes by analyzing and reengineering how a company does business. More than extracting data to a digital format, digitalization evaluates digitized data to establish trends and inform better decision-making. Digitalization drives long-term process efficiency by collecting, digitizing, and analyzing data in real-time to provide actionable insights and mitigate risk.
Here is another way to explain it: Digitization applies strictly to information and data, while digitalization applies to the transformation of processes and business operations. In freight and logistics, this might include:
- Leveraging digitization to automate data entry tasks and collect information from bills of lading, packing lists, purchase orders, and vendor invoices to upload into an existing TMS, ERP or other management platform
- Leveraging digitalization to improve freight pricing, booking, documentation, and carrier performance tracking to drive collaboration and synchronization
Data digitization is an important prerequisite to digitalizing logistics processes. Once you can organize all of your organization's data into digital formats (including unstructured data like emails, spreadsheets, WhatsApp, and WeChat), creating automated digitized processes to boost the efficiency and transparency of your supply chain becomes a much more feasible goal.
"While the challenges standing between organizations and the complete digitization of their logistics processes are substantial, the advantages of digitization are too beneficial to ignore."
Benefits of digitizing logistics processes and workflows
While the challenges standing between organizations and the complete digitization of their logistics processes are substantial, the advantages of digitization are too beneficial to ignore. At a time when most organizations are struggling to keep up with current demands of the post-COVID era — let alone deal with ongoing errors and inefficiencies created by manual documentation, processes, and workflows — embracing digitization and the technology that makes it possible is one of the best ways to position your organization ahead of its competition.
Specifically, here’s how digitizing your organization's logistics processes and workflows can help:
Improved supply chain transparency
Digitization makes data that used to take days to collect available on-demand, allowing you to analyze the performance of your supply chain in real-time and with much less effort. Digitization also eliminates the frequent errors and inconsistencies produced by manual data collection and organization. In addition to making data easier to collect, digitization also affords a greater degree of trust in what your data is telling you. Thanks to these two benefits, digitizing your logistics processes is sure to yield a supply chain that is much more transparent and easier to analyze for actionable insights.
A centralized data hub
One of the most significant benefits of data digitization is that it makes it possible to centralize all of your organization's logistics data into a single centralized hub using a platform like Logistics Orchestration® by Slync.io. In the past, organizations had to source and analyze data from multiple ERP, WMS and TMS to draw insights. As you can imagine, this tends to be a wildly inefficient and inaccurate process. By providing a centralized hub that organizes all of your organization's logistics into a standardized and easy-to-navigate format, data digitization makes this process much more streamlined.
Workforce productivity and efficiency
Digitizing your logistics processes eliminates much of the need for tedious, manual labor such as data entry, allowing you to retarget both your organization's financial and human resources to other projects. Suppose you are looking for a proven way to boost the productivity and efficiency of your workforce (and, in turn, lower your expenses). In that case, process digitalization is a solution well worth considering. Another added benefit is increased employee satisfaction. Workers who are free to focus on more important tasks such as customer service will find more meaning in their work, leading to higher morale, united corporate culture, and less turnover.
Actionable data insights
By making data more accessible and easier to analyze, data digitalization makes it much easier to glean actionable insights from the data that your organization collects. These insights can then be used to evaluate carrier performance and negotiate more friendly contracts, identify aspects of your supply chain where there is a need for improvement, and make swift decisions that are based on reliable information.
Facilitating communications between partners
Communicating with vendors, carriers, and other partners in your supply chain can be a real challenge when the data you use in those communications is messy and not standardized between partners. Data digitalization facilitates far more efficient communication between your organization and its key third-party partners by yielding data that is far better organized and presented in a standardized format.
How Slync.io empowers the digitization of freight and logistics processes
Slync.io's industry-leading Logistics Orchestration® platform was specifically designed to address the challenges BCOs and freight forwarders face when it comes to digitizing their data and digitalizing their logistics processes. Along with digitizing your organization's logistics data and organizing it into an easy-to-use centralized hub, Slync.io also provides a range of automation tools designed to digitize and automate your various logistics processes—including your data collection processes. In this way, Slync.io empowers freight forwarders and shippers with solutions, insights, and automation. Hence, they can make faster and more accurate decisions while increasing supply chain transparency and improving collaboration with partners and customers alike.
Best of all, Slync.io is built to leverage your existing technology and systems, enabling you to modernize and optimize the investments you've already made rather than starting over from scratch. Our flexible logistics solutions are designed to adapt to our clients' specific business needs, allowing us to start delivering measurable value in as little as six weeks.
If you would like to learn more about how Logistics Orchestration® by Slync.io empowers the digitization of freight and logistics processes, be sure to contact us today.
Corey Bertsch (VP, Solutions Management) has spent nearly two decades in the international logistics industry, specializing in the development of technical solutions for some of the world’s largest LSPs and shippers. His areas of expertise include order management, transportation execution, and supply chain visibility as well as the retail, consumer goods, high-tech and manufacturing industry verticals. At Slync.io, Corey co-leads the Solutions Management center of excellence which is focused on developing and delivering products which enable the digitization of logistics processes for shippers and LSPs alike.
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