Saturday, September 18, 2021
HomeOpinionIT in LogisticsThree-Point Strategy to Increase Profit in Freight Forwarding

Three-Point Strategy to Increase Profit in Freight Forwarding

The steady flow of revenue with controlled costs is a definite way to head towards business profitability. But with freight forwarding becoming commoditized, it is not enough to look for profit by reducing costs. Forwarders looking to grow their profits consistently must develop stronger core capabilities to sustain profit in difficult times too.

 

Smart businesses make optimal use of their resources to maintain high-profit margins. Spreadsheets and software with limited capabilities set boundaries to your growth, preventing you from maximizing your potential. Cloud-based freight management solution with central data storage gives you the edge in a fast-moving competitive world. To bounce back from setbacks, carefully planned strategies can still help fulfill the goal of profitability.

 

Implementing Optimization

Numerous tasks must be completed to deliver a shipment on time. The more smoothly these atomic steps work, the higher the efficiency at the organizational level. KPIs are an organized way of performance measurement—to track, visualize and optimize all relevant logistic processes. Freight software like Logi-Sys measures KPIs like job count by branch, performances of individual salespersons, and even by business dimension. With KPI dashboards, you can further optimize any sub-process that may be underperforming.

 

Fix Problems That Reduce Your Revenue

To further increase your top line, it is vital to watch your spending closely. Most losses come from smaller revenue leaks that accumulate over time. Delayed or out-of-schedule payments, if not reconciled on payment realization, could be a profit or loss that may never be visible. Due to the credit-based nature of freight forwarding, this reconciliation is handled well by freight management software.

 

Poor planning can result in unnecessary costs and deplete your profit margins. An example of poor planning could mean your transport vehicle reaching too early or late at the pickup point. Also, forwarders may encounter incidental fees and charges like extended storage, demurrage, and detention. These expenses can be prevented by well-executed planning and clear visibility provided by the system.

 

Processing Shipments Faster

A bigger part of a forwarder’s plan is centered on its customers. High-quality service always wins customers’ trust and encourages them to come back for more business. To keep consistently high standards of service, forwarders must streamline all processes and communicate without delays.

 

Real-time information must be propagated through all channels including transport, ports, customs, and to the customers too. A single-database system ensures access to all users so all teams can work in tandem towards the goal of customer satisfaction.

 

Flawless digital collaboration makes faster processing of shipment possible. Automated workflows handle alerting the responsible teams or people when the status changes. Forwarders that use Logi-Sys’ automation get their job turnaround time reduced by up to 40%.

 

Maintaining steady profit margins is a long-term game. From being able to capture leads and follow through till they convert into customers, to the last-mile delivery, all steps make up for the overall profit gain.

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