How to Audit, Digitize and Automate your Customs Brokerage and/or Freight Forwarding Operations
Back To All Posts | Posted on November 3, 2021
With recent advances in digital, AI (Artificial Intelligence) powered logistics technology, it’s clear that automation and digitization are the next waves of the future. In this post, we’ll explore the concept of AI (because it isn’t robots taking over the world!), how to conduct an audit of your current operations, ease of implementation, and the big why behind why customs brokerages and freight forwarding operations are adopting automation technology at a rapid rate.
What is AI & Why You Should Care
First, let’s start with the Merriam-Webster definition of AI, “artificial intelligence is a branch of computer science dealing with the simulation of intelligent behavior in computers.” This type of technology gives computers the ability to imitate intelligent human behavior. So what’s that mean for operations? Simply put, it means that we now have the ability to automate tedious repetitive tasks, and the best part — these tools save time and money while reducing errors that come from manual processes.
Implementing a new software platform that removes 85% of the manual processes you’re used to can be scary - we get it! Let’s explore the steps you should take as you consider a move of such magnitude to automate your business model.
Complete An Analysis of Your Operational Model
Grab a piece of paper or open an Excel document and start making lists. You’ll want to understand how many shipments you’re processing each month and how many documents are associated with each. Think about commercial invoices, bills of lading or airway bills, arrival notices, packing lists, etc.
Now explore your process for preparing these documents. How long does it take to process each one? How many warm bodies do you have entering manual data over and over again each month? Ultimately, what you want to understand here is your operational costs for executing this process accurately.
The freight movement industry creates unique demands for both accounting and financial reporting requirements. For each customer you work with, break down your accounting process and workflow. Think about what tools you are using, how data flows through this process, and where the gaps are that cause your team the biggest headaches. Then do a quick evaluation of your margin of error and rework associated with your accounting processes.
We all know that customs compliance can be…..well, difficult and ever-changing. Even though it may hurt a bit, we challenge you to review the number of regulatory fines you encountered last year and the financial impact on both you and your customers. Consider things like actual fines but don’t forget to explore the indirect costs of delayed shipments and the potential long-term strain placed on your customer relationships as a result.
With the current state of the global logistics industry, container tracking is a HOT TOPIC to say the least. Here’s some food for thought on auditing your container tracking process. Do an audit of where each of your active shipments is. Now, how long did that take you to figure out? How often are you doing this for each of your customers? Add those numbers up and come to a dollar figure on how much time this manual process is taking each month.
This is a BIG one! As you work to audit your model for customer communication, take a look at how many account reps you have on staff and then explore how many questions they are fielding from active customers each month. How long does it take for them to locate the data requested? How much time are they spending replying to emails and answering phone calls?
Then take a look at your customer retention rate. A huge product of client turn-over is customer satisfaction. If your customers are happy, they won’t leave but if they’re experiencing delays in shipping, regulatory fines, and poor communication — the likelihood of them searching for a different customs brokerage or freight forwarding service is quite high.
The Tools You Use
Make a list of the current tools you are using to get the job done. Then dive into what they are, why you use them, the monthly cost associated, and how they integrate with your other platforms and systems. Ultimately the goal here is to understand if you have a disjointed process that could be streamlined. We often find that our customers have broken operational workflows due to the “bandaid effect” which we have defined as - we’ll use this tool now because we have this problem and this tool immediately solves this problem. Over time, the “bandaid approach” adds up to multiple tools and systems that don’t work together thereby creating more inefficiencies.
Your Biggest Headaches & Challenges
No operational model is perfect and we know that but we invite you to list out your biggest headaches and challenges. What are the things you absolutely loathe completing? What does your team complain about the most?
Try answering this question, “if I could wave a magic wand and fix just one thing, what would it be?”
Implementing Automated Workflows Is Easier Than You Think
If you’ve gone through this exercise and see some gaps, the great news is that there are platforms that will literally do all of this for you — yes, all of it. Sometimes things that sound too good to be true aren’t really too good to be true!
Pick a partner that gets it and has built tools that will truly aid in making your process more efficient, keep you up to date on regulatory changes, and offers seamless integration — through digitization and automation.
About ITS NxGen
International Trade Systems (ITS) based in Gig Harbor, Washington is a leading provider of Freight Software digitization and automation Solutions. ITS delivers one of the most powerful cloud-native logistics software platforms built on a strong foundation based on 30+ years of experience in the industry and providing service to over 3,200 users of our exclusive system
Contact us today to discuss how you can turn your firm into a modern customs brokerage or freight forwarding system that better serves your clients.