Andrei Radchenko 06.05.2022 16 min read

The Challenges Freight Forwarders Experience When Building a Carrier Ecosystem & how to overcome them.

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Helping shippers and exporters find the best way to dispatch goods from A to B, a freight forwarder is an essential link in almost all international or domestic trade chains. An intermediary between shipping customers and carriers, freight forwarders offer to oversee the transportation of goods for clients from beginning to end, arranging shipment details with carriers. In such asset-free businesses, one primary factor affecting the success of freight forwarders is the number of established contacts with the common carriers. This factor ensures the best rates and the fastest routes for shipping customers. Thus, to thrive in such a competitive field, freight forwarders need to have effective data connectivity with all world's leading carriers and be able to integrate with any other stakeholder vital for a client.

This article discusses the technical challenges freight forwarders encounter when growing their ecosystems of carriers and outlines solutions enabling freight forwarders to provide exceptional customer experiences and ensure further business growth.

 

Although connectivity with freight carriers is a vital part of the freight forwarding business, building an ecosystem of carriers is quite a challenging task. The main hurdle here is the difference in technologies and data formats that parties have. Often, the data management and transportation systems freight forwarders rely on are not capable of communicating directly with carriers' IT systems. To integrate those systems and establish reliable connectivity and data exchange, a team of IT experts is required to be experienced with b2b integrations and possess specific knowledge and skills regarding data transfer technologies such as the traditional AS2 or SFTP or modern API. Crucially, however, what makes things even more challenging is that communications between a carrier carrying the cargo and forwarding agents comprise an exchange of EDI messages. Consequently, having experience with EDI messaging (or their API equivalents) is vital. However, often, forwarding companies lack such expertise in-house.

Another issue complicating the ecosystem building is the supposed glass wall, making smaller freight forwarding companies lose hope for direct connectivity with carriers. Carriers prefer to work with the most prominent market players and ignore the small ones, putting them on the endless waiting list. This issue is common for carriers regardless of the transportation modality or country they operate.

To overcome these challenges, many forwarders rely on the so-called "centralized Logtech platforms" intended to provide supply chain execution and visibility process management. These platforms further ensure connectivity across different stakeholders a freight forwarder needs to interact with.

In essence, such platforms play the role of middleman in capturing data from one end, processing it, and transferring it further to the other one. Excellent examples of such platforms include INTRA, Project44, and GargoSmart: all are well-established vendors providing connectivity with carriers from around the globe.

By using such platforms, as opposed to interacting directly with a carrier's end system, a freight forwarder interacts with the vendor's system, which is already connected to several carriers, or gets out-of-the-box integration with the software used by carriers across the industry. This way, forwarders can avoid the need to build direct connectivity with carriers and overcome the glass wall issue mentioned earlier. However, they still need to have an in-house team of experts who will integrate such solutions with their Transport Management Systems (TMS) and be responsible for EDI data mapping (translating data structures from a vendor's proprietary data format to the one used internally in a forwarder's TMS). The latter is inevitable due to various EDI standards and dialects that exist today. To learn more, we have an article explaining the challenges stakeholders of the industry encounter when dealing with EDI

Sometimes, vendors and the largest carriers provide online portals allowing a manual transfer of data between systems. This might be useful for those companies who cannot afford a team of experts developing and managing integration in-house. However, by choosing this option, forwarders significantly slow down the data exchange process with a carrier, which affects the efficiency of operations and makes data unreliable and prone to errors.

Looking at the big picture, Logtech platforms are an excellent option to establish connectivity with common carriers, especially when your company is not a big player in the market. However, you still need to have an in-house talent possessing the expertise and knowledge mentioned above. Also, sometimes, the main benefit of such solutions - a ready-to-use ecosystem of carriers - can be a disadvantage. A good example is a case when you need to connect with a carrier who is not part of the ecosystem of the vendor you work with. Often, such a case implies having more than one platform (or solution) in place, leading to extra investments and complexity of the data management process.

Another potential issue with the Logtech platforms and carrier connectivity solutions is the limitations of the EDI messages a vendor can exchange with a specific carrier. For instance, you want to send a Verified Gross Mass (VERMAS) message to carrier X, but the vendor might not be able to do it. To overcome this issue, you will need to add one more solution to your data connectivity setup.

Whether you develop an in-house solution or utilize one more platform to overcome the drawbacks mentioned above, you will get the same issue - a lack of scalability. Each time you need to go beyond the capabilities of your existing connectivity setup, you will need to start building integrations from scratch, which is equal to extra investments in human and IT resources, and requires an undefined amount of time to accomplish such a project.

The best way to avoid those issues and limitations is to use modern, fully managed data connectivity solutions developed and designed specifically for logistics and the global supply chain. Such solutions help freight forwarders streamline their operations and enhance the quality and accuracy of data they exchange daily with stakeholders, increasing operations efficiency and ensuring further business growth.

Modern solutions to ensure direct connectivity with freight carriers and automate the data exchange process

Youredi is the leading provider of fully managed data integration services and solutions for logistics and the global supply chain. All the company's solutions are based on its proprietary iPaaS technology, a unique integration platform designed specifically to satisfy the data connectivity needs of the domain. Although the Youredi iPaaS is capable of any type of integration, it is exceptionally efficient for connectivity with the common carriers.

The secret behind such efficiency is the Common Carrier Layer (CCL), a technology that reduces the time and resources needed to build integrations with common carriers by up to 75 percent—when compared to an in-house development project. In essence, it is a cloud-based integration layer allowing a customer to connect with an ecosystem of the world's top leading carriers (ocean/container, trucking, and air carriers) with whom Youredi already has established connectivity and ready-to-use data mapping and EDI messaging capabilities. Relying on Youredi's solutions, freight forwarders of any size can get direct connectivity with any carrier they need and ensure a seamless flow of reliable and accurate data regardless of the technologies or data standards they use.

If you wonder how Youredi's solutions differ from those existing today on the market, here are further details.

The main difference is the simplicity and speed of integration. Despite Youredi providing direct connectivity with carriers, thanks to CCL, its clients need not create a new account on the carrier side. So, this omits tasks such as account provision and conduction of connectivity and integration tests. Given these tasks usually take up to a month for a customer, it is a significant speed-up of the integration project.

Also, since the connection with carriers happens through the layer, a customer does not need to make any changes to its TMS or IT system in part of data format or protocol, which is usually the case with most Logtech platforms on the market. Youredi technology adapts to your existing data formats and system interfaces, eliminating the need for customers to launch costly and time-consuming integration projects.

One more element differentiating Youredi from the market is EDI transformation support. Often, freight forwarders rely on modern APIs and have no EDI expertise. So, it is challenging for them to implement EDI messages a carrier expects to receive. Whatever format your company uses (REST API, XML, or even a text file to submit bookings), Youredi will convert that data into EDI format to make it 100 percent match the carrier's requirements. This transformation also happens automatically in CCL and requires no EDI expertise (understanding what each field in a message means) from the freight forwarder/customer end.

Below is an example of EDI messages that Youredi's solution can exchange with carriers straight away:

  •  Booking Requests
  • Technical Acknowledgements (CONTRL)
  • Booking Confirmations
  • Shipping Instructions
  • Shipping Instructions Responses (CONTRL)
  • Bill of Ladings
  • Bill of Lading Images
  • Verified Gross Mass
  • Verified Gross Mass Responses (APERAK)
  • Ocean Status Details
  • Sailing Schedules
  • Freight Invoices

These messages cover the execution and Track&Trace part of a freight shipping journey (see the image below). Typically, Logtech vendors focus on either the execution or visibility part. In rare cases, it might be both, but it will most likely be for one transport modality only. However, working with Youredi, you will be covered for both parts for any carrier you need to work with. With this data available, forwarders can provide their clients with additional value-adding services, eg., an online service to track and trace freight.

 

Journey full

 

Last but not least, unlike most Logtech platforms and vendors, Youredi provides not a tool but a fully managed solution. The concept of fully managed service implies that you do not need to have or manage an in-house team of integration experts or invest in expensive hardware or software. From a solution design to its implementation, all the work will be done by Youredi's integration team, who also commits to maintaining and managing the established connectivity and hosting all integrations in its safe cloud environment. With a talent shortage existing today, this aspect should not be neglected.

Fully managed solutions are also more flexible and tailor-made to address your integration needs. In contrast, many incumbent platforms and solutions do not provide customization since it requires lengthy product roadmap decisions.

Youredi is not just another Logtech platform offering predefined rigid functionality nor an iPaaS tool requiring tons of investments to let your data flow. Instead, Youredi is a vendor providing revolutionary data integration services, ensuring flexible connectivity and data exchange with the common carriers and other stakeholders of the global supply chains and logistics domain.

A unique combination of integration expertise, understanding of the domain's business needs, the flexibility of Youredi's proprietary integration platform, and the uniqueness of the CCL technology ensures quick and efficient development, deployment, and maintenance of data integration solutions for the most demanding customers.

Whether you need a solution to grow the ecosystem of carriers you would like to work with or want to elevate your supply chain execution and visibility processes to a new level, Youredi is perfect for your needs.

If you need more information about Youredi or want to have a free consultation on how our solutions can enhance your business, simply schedule a free meeting with our integration architect

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Andrei Radchenko

Product Marketing Manager, Youredi

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