Most freight forwarders today have dealt with the effects of manual rate management inefficiency. From that experience, the wish is now to adopt a digital solution for freight rate management. The question is no longer about if you need a tool, but which one you should invest in.
Specialized software is becoming increasingly available to alleviate the manual workload associated with freight management processes, including rate management. However, not all tech advancements are of value to your organization and in the complex logistics industry there is no one-size-fits-all solution. For this reason, it becomes harder to know what software is suitable for your needs and requirements.
We have all made the mistake of purchasing the wrong product. This usually happens because it is cheap, easy, or because we believe we need the newest state-of-the-art version.
To help you choose the right freight rate management software for your business, we will guide you through the following topics:
- Why you should invest in a digital solution
- The factors about your forwarding operations to consider
- Rate management system factors
- Most recommended software features
Why you should invest in freight rate management software
Managing change is difficult and because of that many keep with the old way of doing things. If you are still feeling undecided, here is why it is in the best interest of your organization to say goodbye to manual rate management.
The main benefits with freight rate management software are:
- Work more efficiently and less manually
- Reduce the turnaround time for RFQs
- Minimize risk of errors in quotes and invoices
- Increase data accuracy
With a freight rate management system, you will be able to respond to RFQs within minutes with your actual best offer. A centralized, digital database of your entire network’s base rates and surcharges dramatically cuts down on the time and effort required to find rates in order to build a competitive and reliable tender.
What is more, all the lost time and resources directly translates to increased operational costs. On top of inefficiency, manual setups and processes are much more prone to errors, miscalculations, and delays. These can also quickly become costly for your business.
We have a fully dedicated article available for you to learn more about the costs and risks of manual rate management. Then let’s look at what about your organization should factor in your choice of freight rate management software.
The factors about your forwarding operations to consider
There are factors in your operations that should impact the choice of rate management system. A rate management tool can be a great product, but depending on your business, it might actually not be a good fit for you.
You will need to consider the following factors:
- Mode of transportation: air, ocean, road, rail, or barge
- Type of connection: port hinterland transports or other
- Shipping equipment: container or non-containerized freight
- Shipment size: FCL or LCL
Some combinations will work just as well as others due to the similarity of the shipping pricing structure. Regarding freight rate management for hinterland transports, a forwarder should have a setup that can cover its network of surface transport options as well as account for the shipment type, eg., container transports.
Air cargo does not use the same standard shipping containers as containerized ocean freight and surface transport. To calculate rates, you require different data points, such as the individual dimensions of the cargo. Different pricing structures mean that a system built for air freight rates will not be suitable for a forwarder who mainly manages container transports.
Ocean freight is mainly spot rate business. Without negotiated contract rates, a dedicated rate management tool needs to function differently to provide real-time rates.
Ultimately, the most important transport conditions and pricing factors for your operation must be available in your chosen freight rate management software to be searched and filtered.
Rate and tender management processes
Finally, you need to identify what processes you need help with, and which you might have under control already. It's important to differentiate between what you need to remove manual workflows and what you think would be nice to have. It is easy to get swept up in fancy functionalities, but it is often the case that your team or organization will not make use of them all.
It could also be the case that you have other tools and software that already facilitate these processes. There is no need to duplicate these functions in another tool. Instead, set the focus on establishing a unified database of freight rates that allows for quick search and calculation.
The next step, is to determine what factors about the freight rate management software matter to you the most.
Rate management system factors to consider
Certain factors are not universally good or bad, but they are choices you have to make based on what suits your workflows better. Make sure you are aware of the following before committing to a purchase.
Software or hardware
Is the system cloud based or hardware requiring installation on all users’ computers? There is no right or wrong here, but a cloud-based solution offers more flexibility, better reliability and easier integration.
Upload speed
How long do the uploads take? Are they done manually or via API? What is the QA process for new rate uploads? With preparation and contractual SLA, it should not be an issue how uploads are done and how long they take, as long as it is within your contractual SLA. However, if you know that you often need changes to rates spontaneously and instantly, then this question becomes especially important.
Secure storage of data
Pricing data is sensitive and confidential data. Ask how your data is protected and what data security standards are implemented.
Support and training from provider
Does the provider offer an onboarding session to train you and the team how to use their solution? Do they offer continued support if the team has any problems or questions?
User-friendliness
The goal is to help your team save time, so it's important to choose an intuitive tool that everyone understands and can use.
Upcoming features
Last, ask the software provider if any new features are already planned and their timeline for release. Will the provider perhaps even take suggestions from you?
A freight rate management tool should solve problems, not create new hurdles. After you have considered the above factors, it is time to take a look at individual features.
Most recommended software features
There are plenty of features and functionalities freight rate management software can offer. Some may be considered basic, some may be more advanced. The most important factor is, though, whether the feature is actually necessary and useful for you.
API integrations
Forwarders who mainly working with spot rates should look for a solution that via integration connects with the most important carriers to offer automatic updates of real time rates. If you mostly have negotiated contract rates, there is, however, little need for this type of solution.
Automated upload of rate sheets
Consider how easy this is for you as the customer. Will uploads require any formatting of rate sheets on your end? Can you upload the rate sheets yourself, or is it done by the provider? Additionally, factor in if uploads are included in the price or come with an added price tag.
Currency support and conversion
If your network includes subcontractors in multiple currency regions, it may be important for you that the solution supports multiple currencies. Look into if they convert currencies accurately for a unified view.
Customized quote creation
When you want to automate processes related to quote and tender creation, look out for functions that allow you to instantly build quotes and update them as conditions change.
Data and Analytics:
You should be tracking data for better decision-making and a better understanding of your business. However, there are many options for reporting and analytics, and you may not need your rate management tool to have that function. If you do not have any other reporting tool in place, statistics we suggest to measure are the number of quotes generated, quote turnaround time, win / loss rate, shipping habits, and price tracking.
Export selected rates
Are you able to export rates for a quick and easy share with your customers? Use exports to generate on-demand quotes. Check what formats are supported.
Filter options
Relevant filters are needed in order to quickly filter searches based on customer requirements or to avoid certain options when conditions change, such as strikes or temporary infrastructure issues.
Language options
Most software will these days be available in English as a standard. If English is not your native language or if you have a highly international team, you should not underestimate the value of language options. Being able to work in a native language can be more comfortable and efficient.
Permission management
Giving large parts of your organization access to a rate management tool can be very beneficial for transparency, but you would want to ensure that you can set up different user profiles to accommodate different needs. Check that the system allows for different user profiles with different access, edit rights and general permissions.
Search
Potentially the most important function is the ability to easily and quickly search contract rates and routes available for carriers and operators. Pay attention to how the software handles complex freight pricing structures and multi-search.
Standardized formatting
You know as well as that price lists are not standardized across carriers and operators. For best efficiency, keep an eye on how the solution you buy creates a unified format for all freight rates.
System integration
Depending on the workflows set up in your organization, determine whether you require connecting the software with your TMS or CRM.
All of these features can be insightful and valuable to daily operations. However, for many, not all are necessary to have. Ask yourself if you would use advanced features enough or to their full potential to justify a higher price point.
Remember, the ultimate goal of any tool or platform is to create efficiency across your operations and organization.
The rouvia eQuote freight rate management solution
Here at rouvia we’re experts in container hinterland transports and we have developed a complementary solution to our FMS that makes the rate management easy. The main purpose is to consolidate all your rate sheets in one platform. This way, you can find the best rate for any zip code with the click of a button.
Here is a quick overview of what you can expect from rouvia eQuote:
- Automated uploads of rate sheets
- Centralized access to current rates and surcharges
- Fast search with multiple filter parameters
- Effortless rate comparison
- Export selected rates to CSV or PDF
- Available in English and German languages
In summary, reduce the time you spend on finding the best rates and respond to RFQs within minutes.
Get in touch with us to learn more about our rate management system and schedule a free demo.
