Forwarders – losing out on new business due to out-dated back-end systems

July 21, 2014 — Leave a comment

Losing-Business-On-Social-MediaOn March 13th, 2014, Sean Day, a Chicago-based wholesaler, called up the Italian branch of a leading global freight forwarder and requested a price quote for a door-to-door air freight shipment from a Rome-based apparel supplier, to his own warehouse in Chicago, IL. Within 37 minutes, he received pricing for two out of the three legs – from the Rome address to Rome’s airport, and from there to Chicago’s O’Hare airport. If that doesn’t impress you, consider that prompt price quotes for international freight shipments, are rather like four-leaf clovers. A spot quote in 37 minutes seemed too good to be true.

It was. Sean only received the final quote, including delivery to his Chicago address, four days later, on May 17th. Yes, four days.

Bear in mind that this was an air freight quote. Sean was willing to pay a substantial premium to fly his precious cargo by air, because he needed it urgently. What’s the point of splashing out on air freight, you might wonder, if you wait four days just for the price quote? Sean wondered the same thing.

At least he would have wondered, if he actually existed. In fact, our company, Freightos, created Sean, a fictional employee working at an imaginary company, as well as multiple whimsical competitors, in order to collect data on the sales process, and customer experience, of procuring international freight forwarding services. Over the course of two months, we requested dozens of air, ocean and ground quotes from five of the top fifteen freight forwarders in the world (after, of course, receiving permission from the companies). Each time, we identified ourselves as a new customer with potential for repeat business in the future.

Sean’s quoting experience was no exception. Due primarily to the archaic back-end systems so prevalent in the industry, and the lack of data sharing between fiefdoms, the average quote time was approximately 62 hours, with some quotes taking as long as a week. The quoting process was rife with other problems, ranging from vague quotations to blatant inaccuracies. In some freight forwarders, each office, or even individual sales staff, used their own price quote templates. Many forwarders had inactive contact numbers on their website. Worst of all, a staggering 43% of quote requests were simply ignored. Some way to capture new customers!

If these quotes were frustrating for the customers, they were also expensive for the vendors. We estimate a person-hour went into each. In developed countries that’s about $40. And forwarders often do five quotes for every secured order. That’s $200 wasted. For a smallish spot order, $200 is the entire profit! Click here to continue reading the full article… Source: LloydsLoading.com

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