How-SME-Freight-Forwarders-Expand-and-Grow-their-Business.webp

How SME Freight Forwarders Expand and Grow their Business

September 25, 2024 Freight Forwarding Software

SME freight forwarders face numerous challenges, but with proper planning and implementation, these challenges can be overcome. Unlike billion-dollar conglomerates, SMEs operate with limited capital and resources, so even small errors can significantly impact operational efficiency and profitability.

Moreover, SMEs often lack the infrastructure needed to sustain deliveries efficiently and cost-effectively. They must navigate rising fuel costs, capital challenges, increased transportation expenses, and labor costs and availability. Targeting both domestic and global markets with these constraints is a formidable task. However, a well-crafted logistics strategy can make a significant difference in operations. Partnering with logistics companies that offer robust infrastructure and global presence can provide SMEs with a strategic advantage through desirable services and cost-effective operations.

  1. Fulfilling Shipper Expectations

Meeting the expectations of shippers is crucial. Some major expectations include:

  • Transparency in Rates: Customers are keen on understanding their expenditure and identifying opportunities for cost minimization. Shippers appreciate transparency when interacting with freight forwarders. By utilizing quote management and rate management systems, forwarders can provide accurate quotes quickly. This benefits both parties—shippers gain the transparency they seek, and forwarders can offer instant quotes, saving time.
  • End-to-end Visibility of Shipments: Shipment visibility is a key differentiator in meeting customer expectations. Customers want clear information about the status of their shipments, including potential delays, expected arrival times, and alternative routing options. With this information, customers can reschedule shipments, avoid port congestion, minimize demurrage charges, and ensure timely documentation for smooth cargo unloading. Such visibility can be achieved with a robust Track and Trace tool.

  1. Key Focus Areas for SME Forwarders

SME forwarders should be focus on:

  • Optimizing Inventory Management for Ocean Freight: Accurate demand forecasting helps SMEs avoid excess inventory and associated storage costs. Implementing demand planning tools to analyze historical data, market trends, and customer behavior can make this possible.
  • Collaboration with NVOCCs and Large Forwarders: Engaging with freight forwarders who can consolidate shipments from multiple SMEs into full container loads (FCL) is beneficial. Leveraging their expertise and network allows SMEs to negotiate competitive rates and reduce transportation costs.
  • Exploring LCL Consolidation Options: Working with freight consolidators to pool cargo can optimize space utilization and result in cost-efficient shipments.
  • Proper Forecasting and Demand Planning: Accurate demand forecasting helps SMEs avoid excess inventory and associated storage costs. Demand planning tools can analyze historical data, market trends, and customer behavior to improve efficiency.
  • Optimizing Ocean Freight Routes: Forwarders can assess different trade routes, transit times, and shipping lines to identify cost-effective options. Factors such as transit time, frequency, reliability, and freight rates should be considered during route planning.
  • Adopting Digital Technology: Implementing electronic documentation systems can reduce paperwork, increase efficiency, and minimize errors. Digital platforms facilitating bill of lading, customs documents, and other relevant paperwork are essential.
  • Automation for Ocean Freight: Automation technologies for container handling, stacking, and movement within warehouses or port terminals can streamline operations. Robotic Process Automation (RPA) can also improve overall productivity by automating administrative tasks.
  • Container Space Management: Maximizing container space utilization reduces ocean freight rates per unit. Evaluating cargo dimensions and packaging ensures efficient use of container capacity. Load optimization software like console planners can improve stacking and securement within containers.

Key Focus Areas for SME Forwarders

All the above can be achieved with a proper digital freight forwarder platform that provides a rich digital experience, especially as the logistics industry increasingly embraces digitization. NewageNXT, a modern freight management software is a SaaS-based ERP designed to offer a comprehensive digital experience for all types of freight forwarders, addressing your unique freight forwarding needs.

  • Extensive Features: NewageNXT includes features such as omni-channel capability, ease of collaboration, and multiple communication channels to streamline operations for forwarders.
  • Built-In Intelligence: Developed on a modern technology stack, NewageNXT can effortlessly track operations, finances, shipment statuses, and other key milestones, like ETA for imports and ETD for exports, ensuring timely delivery of goods.
  • Intuitive UI: The modern, intuitive, and responsive UI offers a role-based landing page and dashboard, flexible communication channels, and omni-channel capability. It has an easy-to-use interface that supports collaboration across your organization and provides insights to help you create winning quotes.
  • Integrated BI Tool: NewageNXT offers an integrated BI tool that provides comprehensive data analysis for the management team on total cost of ownership. It gives a full understanding of what will work best for customers, helping to refine your company’s portfolio and ensuring that you make informed decisions for your team and organization.
  • Seamless Integration: The software features a secure API gateway that enables easy and efficient integration with any third-party application.

  1. Process Improvements for Growth

SMEs should focus on the following business areas to expand and grow:

  • Efficient Packaging Solutions: Use lightweight, durable packaging materials optimized for ocean freight shipping. Reducing package dimensions can maximize container space and minimize freight charges.
  • Unitization and Palletization: Unitizing cargo and palletizing shipments simplifies handling and reduces loading/unloading time at ports, contributing to timely delivery.
  • Implementing Lean Principles: Identify and eliminate non-value-added activities in ocean freight shipping operations. Streamline workflows, minimize wait times, and reduce handling and processing costs. Employee involvement and feedback should be encouraged for continuous process improvement.
  • Performance Analysis through KPIs: Establish relevant KPIs to measure and monitor international ocean freight shipping performance. Track metrics such as on-time delivery, freight cost per unit, container utilization, and documentation accuracy. Regular analysis of data helps identify areas for improvement and supports informed decision-making.
  • Conducting Regular Freight Audits: Perform regular audits of freight invoices and contracts to identify billing errors or discrepancies. Verify freight rates, surcharges, and accessorial charges to ensure accuracy and avoid overpayment.

For SMEs, optimizing logistics costs and increasing revenue and profitability are primary objectives. Achieving these goals requires a strategic and holistic approach to freight operations. By implementing the strategies outlined above, SMEs can significantly expand their business, increase profitability, and stay competitive in the market.

Discover how Newage’s freight forwarding software can help SMEs optimize logistics and grow their business. Contact us today!

FAQ

  1. What is an SME freight forwarder?

SME freight forwarders are small to medium-sized enterprises specializing in logistics, shipping, and supply chain management. They manage cargo transportation across various modes such as air, sea, and road.

  1. How can freight forwarding software help SMEs grow their business?

Freight forwarding software automates operations like tracking shipments, managing documentation, and streamlining customer communication. This reduces manual workload, improves accuracy, and enhances customer satisfaction, leading to business growth.

  1. What challenges do SME freight forwarders face?

Common challenges include:

  • Limited resources and manpower.
  • Difficulty in competing with large-scale forwarders.
  • Managing operational inefficiencies.
  • Adapting to changing regulations and technology.
  1. How can SME freight forwarders increase operational efficiency?

SMEs can boost efficiency by:

  • Implementing freight forwarding software.
  • Optimizing supply chain processes.
  • Training staff in industry best practices.
  • Partnering with reliable carriers and vendors.
  1. Are there cost-effective solutions for SME freight forwarders?

Yes, cost-effective solutions include:

  • Adopting scalable, cloud-based freight forwarding software.
  • Leveraging digital tools for marketing and customer engagement.
  • Collaborating with other SMEs to share resources and reduce costs.

6. What role does technology play in the growth of SME freight forwarders?
Technology is critical for growth as it helps automate tasks, improve data accuracy, offer real-time shipment tracking, and provide better customer service. Advanced tools like AI, IoT, and data analytics can also enhance decision-making.

  1. How can SME freight forwarders build customer loyalty?

Customer loyalty can be improved by:

  • Offering transparent pricing and shipment tracking.
  • Ensuring timely deliveries.
  • Providing exceptional customer support.
  • Using CRM tools to personalize customer experiences.

8. Why is scalability important for SME freight forwarders?
Scalability ensures that an SME can handle increased business demands without compromising efficiency or service quality. Scalable tools and processes are essential for long-term growth and competitiveness.

  1. How can SME freight forwarders stay competitive in the market?

To stay competitive, SME freight forwarders should:

  • Focus on niche markets or specialized services.
  • Invest in digital marketing to reach more customers.
  • Build strong relationships with carriers and clients.
  • Continuously innovate and adapt to market changes.
  1. What are the benefits of digitizing SME freight forwarding operations?

Digitization provides:

  • Enhanced productivity and cost savings.
  • Real-time visibility into shipments and operations.
  • Faster response times to customer inquiries.
  • Reduced paperwork and human error.



Newage’s mission is to assist global freight forwarders by streamlining their operations and helping them scale up their business with a state-of-the-art freight management system.