Ask a range of logistics managers what their main pain points are, and you will soon hear a common theme – wasting time waiting for freight agents to get back to them. Delays occur, paperwork piles up and costs are often not clear.
Moving cargo intermodally is a complex, billion-pound industry, yet many of the processes that could be simplified with technology have traditionally been done over the phone, by fax and email or even jotted down on scraps of paper.
Set up 18 months ago, digital freight forwarder Zencargo has offices in the UK, Europe, India and the Middle East, and ships component parts worldwide for a broad range of customers. Whether it is SMEs shipping a few times a month or large companies spending significant amounts on freight each day, the company offers real-time tracking as well as customs clearance and pre-shipment inspection. Clients can move full containers, boxes, pallets or crates, get an instant quote, book online in seconds and manage all their paperwork from a cloud-based dashboard.
“Let’s say you’re shipping tyres from China to Doncaster,” says co-founder and chief commercial officer at Zencargo, Richard Fattal. “The whole process happens on one stream on the platform. Customers have a specific shipment and purchase order, and we talk to the warehouse to prevent the mess of multiple emails with multiple people. [We] end up with one line of communication with one set of documents, which stays live until the shipment reaches the warehouse at the other end. We constantly send information back to our customers, so they can update their business management software, closing the loop from ERP system to ERP system, giving them complete visibility.”
Fattal and fellow co-founder Alex Hersham are old friends who both previously had ‘nightmares’ communicating with freight forwarders. “I was exporting chocolate from West and Central Africa to Europe, and Alex was buying container ships for hedge funds,” says Fattal.
“I needed a company to provide real-time information about the status of my order, but often couldn’t speak to someone until something went wrong.”
Joined by technology start-up founder and artificial intelligence (AI) expert Jan Riethmayer, the team spoke to dozens of logistics experts from a range of sectors, all of whom said that information regarding the status of their shipment was too siloed. “They told us that companies were taking too long to aggregate their data, which was delaying orders,” says Fattal. “Businesses want to be kept informed from the moment the PO is raised right the way through to when the shipment is delivered to the warehouse.
“There was a real need for more visibility across the supply chain and we knew that by digitising the process, we could make a big impact quickly.”
Providing better visibility
Zencargo has three types of customers: digital e-commerce companies who sell car parts and want up-to-date delivery times and to be able to keep track of their shipments on the dashboard; global commodity buyers who need visibility over the movement of parts all over the world; and large companies, who are not digital in their sales strategy or business, but who are embracing digitisation as a process internally.
The company’s team of analysts provides real-time information about whether shipments are on schedule. “If a shipment is delayed, we’ll give the reason and duration,” says Fattal.
The cloud-based technology also lets customers know if there are any outstanding items on the order and uses an interactive workspace where documents can be uploaded, such as a bill of lading or letter of credit. “If they need to approve something, they can simply click ‘yes’ and the outstanding item will be actioned,” says Fattal. “Businesses know what they need to unblock us, so we’re never causing delays.”
The dashboard also includes a PO section where customers can see their production status and whether there have been any delays in manufacturing. “If the PO is ready and has been booked, the dashboard will display what’s going on in the water, air and on land, but also includes what may lie ahead. It’s a full suite of services,” says Fattal.
Zencargo liaises with the customer’s country of origin directly, which helps to optimise their choices. “Whether it’s choosing the mode of transport or optimising the capacity of a container, we have different team members all over the world working in procurement, supply chain and logistics, who are able to turn purchase orders into shipments at the right time,” he says.
“We try and structure all of the data across our clients’ supply chain to provide accurate information on the platform as early as possible. We can plug directly into their ERP or internal software, which enables us to manage orders from the moment they’re raised, preventing the need for maintaining separate spreadsheets and databases, which would have to be merged to compile reports.”
The analysts also provide comparative metrics on suppliers, including route performance, cargo-ready dates and port-to-port times, using node-to-node data transfer (the network node being the connection point that can receive, create, store or send data along distributed network routes). “Customers can compare things like ocean carriers and sailing schedules based on criteria such as transit time, price or departure date,” says Fattal. “Traditional logistics management companies typically don’t supply all this information in one place in real time.”
Counting the cost
There are numerous elements involved in freight shipping costs, such as container capacity, fuel price fluctuation, currency rates, service charges and seasonality, all of which means that calculating the rate of service is not straightforward. Some agents will include certain costs in their upfront quote, while others offer them as an optional add-on. It is therefore advisable to get a full breakdown of what is included in a quote before engaging the services of any freight forwarder, stresses Fattal.
“We provide data on fully landed costs, from the factory to the door, and also explain the cost of each part of the movement, including taxes and the contribution these will make to the overall margin and profitability of each part of a customer’s supply chain,” he explains.
Working capital is also a big unknown for companies, Fattal points out, which is why Zencargo gives costing in terms of its customers’ inventories. “Using AI, we can optimise inventories and supply chains by predicting future demand, and let our customers know how much stock they actually need to hold, which helps them to become more predictive. They are then able to conserve cash and turn over stock more quickly to increase their margins and relieve pressure from competitors.
The Zencargo dashboard provides visibility over global logistics movements (click to enlarge)
“If you don’t have access to the data, you can’t make informed decisions,” Fattal states. “You’re just renewing contracts with suppliers without thinking where you can save money.”
He explains that, whereas companies would traditionally differentiate their business by the quality of their suppliers, now they often buy from the same suppliers and parts are increasingly commoditised, so the quality of their supply chain and customer service becomes a way to stand out. “These other services, such as delivery time and having items available, become key points of competition,” Fattal says.
“More and more managers have a certain level of user experience in their day-to-day personal life that they don’t benefit from in their business life. They are more demanding and expect superb software to be able to do their job. Younger professionals are entering the supply chain world and they are forming a new guard of decision-makers who are embracing digitisation.”
Fattal says many Zencargo customers use the company as part of their digital transformation process. “They want to streamline systems and see the technology we’re offering as an enhanced customer service. It’s not interesting for its own sake. It gets companies answers and goes a long way to simplify logistical complexity.
“If we let our customers know what’s going on from start to finish and don’t spring anything on them at the last minute, we can offer them peace of mind. Things do go wrong in logistics, but by digitising the freight industry to distribute data in real time, we hope to tear down barriers to trade in the future.”