How general cargo partnerships form successful networks with IT

Stefan Seufert, CTO/Vorstand EIKONA AG
Man walks by next to a red forklift in the warehouse.

Multiple partners are involved in general cargo shipments at every single step of the process: picking up and handling shipments, arranging for long-distance transports and carrying out deliveries. That means general cargo forwarders have to cultivate good relationships. Belonging to a network also gives you access to its resources. Joining multiple alliances improves utilisation rates for trucks and cargo handling equipment but makes many processes more difficult.


As forwarders who arrange groupage transports can tell you, customers do not judge their performance until after the delivery. Even though their responsibility ends at the doors of the receiving warehouse. The companies are arranging a service that has a goal they can only achieve together, either as independent partners or as members in alliances and networks. Shippers of general cargo need nationwide delivery in Germany and Europe for the logistics to be efficient. General cargo alliances help medium-sized freight forwarders compete with large corporations. They create fixed structures that everyone has to abide by:

  • Precisely defined products with and without fixed transit times
  • Regular transports between alliance sites
  • Minimum capacities for shipment quantities
  • Dimensional specifications for the package sizes
  • Boundaries of pickup and delivery areas
  • A common IT environment with interfaces and status codes
  • One clearing system with internal billing rates for individual service steps
  • Consignee-controlled delivery schemes for procurement logistics

These are the key requirements enabling freight forwarders to provide stable services that deliver on their shared service proposition in the general cargo segment.


IT manages collaboration in general cargo alliances

General cargo networks coordinate their interactions over IT platforms. They exchange shipment data and record the shipment statuses with scans at all operational interfaces during the transport process. These actions document the shipment of the general cargo, i.e. the route traced by the cargo from the shipper to the recipient, for packages, pallets, cages, and IBCs. They also use measurements and weights to record the data needed for billing. For more involved services, many networks also use workflows to document the progress of individual tasks on a shipment-by-shipment basis. This enables the partners to support each other in fulfilling general cargo orders. All these measures help get the cargo to its destination in perfect condition on time with an extremely high degree of reliability. Every logistics network has defined its own processes and embedded them in its central IT solution. This enables it to handle and transport goods quickly and professionally based on the same recurring processes.


Increasing complexity from multi-network collaboration

Although they perform similar tasks in groupage and in some cases offer almost identically defined products, the general cargo networks describe their services differently. This applies to transit times, individual details, status descriptions of the transport stages and the associated code lists that the networks use to translate statuses into digits. When German freight forwarders belong to multiple networks, they face greater challenges in operational processes. The physical handling of general cargo shipments at each location is not the problem – they simply follow the standard guidelines. However, they do have to document the services for each shipment based on the specifications of the specific alliance that has been entrusted with delivering that shipment. This becomes particularly difficult when they accept packages arriving on long-distance transports. The facility's TMS always uses the same method for recording the status and proof of delivery (POD). However, general cargo consolidation means that shipments from different alliances are delivered together. That means the TMS has to apply the various codes used by all these networks. It can only do this if it is configured for real-time data conversion. The transporting companies then benefit from consolidating the general cargo even more, thereby increasing truck utilisation.

Conclusio

IT systems help general cargo forwarders work in multiple alliances

General cargo alliances evolved in logistics to consolidate shipments and optimise resource utilisation. This general trend is reinforced by general cargo forwarders who belong to more than one alliance. It allows them to condense the stops on local trips even further. However, they also have to maintain the documentation required by the networks and thus enable internal billing for services. Luckily, modern IT systems and real-time data conversion let them achieve this level of efficiency enhancement effortlessly.


Stefan Seufert
Stefan Seufert
CTO

As a design guru, the software developer delves into logistics service providers' requirements like no other. He is passionate about exchanging information securely and efficiently and thus speeding up the physical logistics process.


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