The flow of freight, the flow of data

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The movement of data through the global supply chain is now as important as the movement of freight.” –Bill Todd, business development manager, CargoWise

One of the more interesting facets about the freight world these days regards the high importance now attached to the speedy (and accurate) flow of data.

This isn’t a new topic, of course: indeed, the need to quickly obtain correct information concerning domestic and global shipments alike is an issue that dates back to the first movements of freight (whenever the heck THAT was!)

[You know, this is as good a time as any to take a step back and think about what goes into the supply chain in the first place. Arizona State University's W. P. Carey School of Business put together a slick twelve-part video series on this very topic – including a whole section on information technology, which you’ll see in a bit. Here’s the first part, providing a neat “overview” of what supply chain management truly entails.]

In the past, though, data didn’t have to be super-precise: rough approximations of delivery times were the norm, largely because transit times themselves varied wildly. Nowadays, of course, precision is the goal of the freight world, with billions of electronic bytes flying far ahead of actual shipments to clear national clear borders so they can arrive “just in time” to be plugged into production lines or placed on shelves for purchase.

That need for precise and speedy data is only going to increase in the future, too, in the opinion of Bill Todd, business development manager for logistics software provider CargoWise.

“For example, we’re increasingly witnessing a dramatic shift in the kind of data requests importers are seeking during the bid process,” he explained recently. “The focus is shifting from the ability to classify and perform the necessary import data entries to being able to provide accurate import data that traces the importation process back to the origin of the goods.”

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Todd (at right) added that this shift in importers’ data requirements has been driven by the sheer increase in the volume of imports over the past 20 years, which means that much of the critical data related to the import process is not available until the shipment clears customs for entry.

The result is that not only is the data often incomplete, but frequently contains hidden costs or data stored in different “buckets,” making it difficult for the importer to accurately assess the true landed cost of an import shipment.

“The fact is that the software systems of most large importers have no way to gather all of the needed data from their internal systems,” Todd noted. “Therefore, they must rely on their freight forwarder and customs broker to provide the critical data they need. As a result of this, along with expanding global supply chains and new reporting regulations, we are seeing a shift to the end-to-end management of data back to the origin of shipment, in addition to the movement of freight in order to remain profitable.”

In today’s global economy, he said, the current trend in obtaining shipment data is to track the information deeper into the supply chain to gain greater visibility – all the way down to the purchase order level and line items in the original purchase order.

“Total visibility throughout the supply chain, from the actual site of origin to final destination, is now the ultimate goal,” Todd stressed. “Importers today are increasingly requiring visibility from the time components leave the manufacturer to the time they arrive at final destination.”

[Here’s ASU’s take on the information technology needs of modern-day supply chains.]

To do so, importers want customized reports from their broker, or the ability to generate their own reports which include many of the data fields in the entry itself. “They must rely heavily on the import data obtained from their freight forwarders and customs house brokers to manage the supply chain more effectively and to accurately compare global sourcing points,” he pointed out.

“Even in an increasingly challenging business environment, most logistics service providers and customs house brokers can capably move the freight and clear entries,” Todd added. “But, as the movement of data has become notably more important than just the movement of shipments, the role of the broker as classification expert has shifted back to the importer of record.

Here’s the important part of all of this, he said; something even truckers need to think about: “Competition throughout the entire supply chain has narrowed margins between the most and least expensive logistics providers,” Todd stressed. “In this competitive logistics management atmosphere, the ability to provide total, extended supply chain visibility and customized reporting tools can make the difference in who wins and maintains business.”

Now, this shouldn’t be news to anyone working in the freight business, but it’s important in terms of establishing “why” truckers and others need pay attention to how accurate and fast they can transmit freight data as well as the freight itself. For data flow is going to remain a critical competitive battleground for years to come.

What's Trucks at Work?

Trucks at Work: Sean Kilcarr comments on trends affecting the many different strata of the trucking industry.

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