In recent years, technological advancement has transformed operation protocols in multiple sectors. This scenario is true for the logistics industry as well. In logistics, freight management is one of the most complex operations as it involves multiple parties like shippers and carriers and often has a long time duration.
Nevertheless, advancements such as digital freight matching (DFM) technologies and platforms have become a feasible initiative for numerous organizations in the logistics industry. In fact, the market for such software solutions is expected to expand to around $17.7 billion by 2032.
In this article, we’ll focus on comprehending digital freight matching (DFM) and its stage, why it’s necessary, and factors that companies should consider before using it.
Understanding DFM
Digital freight matching (DFM) is the use of cloud-based technologies that help streamline the freight management process. These platforms and technologies match a shipper freight with a carrier’s available capacity, resulting in seamless operations. When it comes to the practical applicability of these platforms, businesses use them to post shipment details.
Meanwhile, carriers also search these platforms to find relevant orders that they can facilitate. It’s worth mentioning here that these platforms use artificial intelligence (AI) based predictive analysis to optimize matches which leads to more efficient bookings. However, they’re not the same as load matching.
Load Matching vs DFM
Load matching is a process where a freight forwarder is actively involved in matching a shipper and a carrier. This is often seen as a traditional approach that can be both time-consuming and prone to human error.
Digital freight matching (DFM), as mentioned, is when shippers and carriers both have access to a digital medium they can use for posting and securing sea freight, air freight, FBA shipping, and door-to-door shipping orders. This approach leads to optimal matches and is less time-consuming.
The 7 Stages of DFM
Integrating a DFM solution into logistics is a straightforward initiative. However, companies should follow the step-by-step approach mentioned below for maximum efficiency.
Posting
In this stage, the shippers enter the freight parameters required by the digital platform. This information may include the category of products being shipped, their weight, size, the depots for pick up and delivery, and the preferred time.
The importance of posting accurately can not be over-emphasized since it plays the role of matching the load to an appropriate carrier leading to an efficient shipping service.
Searching
Transporters look for loads that could be granted to them depending on their capacity and the routes they have planned. Carriers can also sort the loads by key parameters such as the location or type of the load and the frequency of the delivery.
This stage also helps carriers avoid the need of having to search for preferred loads in various sources on their own, thereby making the work easier for them.
Matching
DFM platforms have an automated system that can match the posted loads with the right carriers. During this stage, the automated matching protocols function based on various factors that include the route, traffic conditions, the freight, and more. This is very important for sea freight and air freight activities since inaccuracies in details can lead to severe delays.
Negotiation
After identifying carriers capable of providing the service the shipper needs, both parties discuss various factors such as price, delivery time, and any other conditions that may affect the overall agreement. They are particularly useful in door-to-door shipping that has strict operating parameters.
Confirmation
When all negotiations have concluded, the shipment and other reciprocal details are finalized. One of the key aspects that is confirmed in this stage is the budget as it influences the expectation and the end deliverables of the service.
Documentation
During this stage of the freight management process, all shipping documents whether formal or informative, are signed, generated, and disseminated from the electronic system. This includes bills, invoices, customs documents, and proof of delivery.
Using DMF solutions eliminates the need for paper documentation which not only decreases overhead costs but also streamlines the entire documentation process and ensures timely completion.
Tracking
This stage is paramount to freight operations and entails the use of real-time monitoring. Keeping an eye on the freight progress can help both the shipping agent and carriers alleviate communication gaps and can also facilitate them in meeting delivery expectation
Why Should Companies Use DFM?
Using a DFM solution is essential for businesses as it can help them optimize their logistics in a variety of different ways. Some key reasons as to why companies should use DFM platforms include:
Improved Efficiency and Collaboration
Digital freight matching involves fewer intermediaries and manual operations, as a result, the load assignment is quicker, and the amount of paperwork that’s necessary is limited.
Communication solutions within the platform facilitate interaction between shippers and carriers including the freight forwarders, leading to improved collaboration.
Access To Real-time Data
The availability of real-time data is beneficial to shippers as well as carriers in enabling them to make prompt decisions. Some of the notable benefits offer a more refined outlook that consists of observing the shipment’s progress, keeping abreast of market rates, and modifying one’s plans as and when it is necessary to achieve greater efficiency.
Cost and Time-Saving
DFM saves money by ensuring that the loads are matched correctly. It also reduces time since it cuts out time-consuming tasks that may include submitting inquiries everywhere as well as subsequent communication.
The benefits realized by automating the transport and business management processes equate to the optimization of costs of operations and overall time taken to transport all forms of freight.
Better Operational Flexibility
Digital platforms have options to optimize the service and adapt to the changing market demand. Carriers can change their route and loads easily and shippers can also find an easy way to approach the carriers at the time of peak season or for emergency shipments which leads to an improvement in FBA shipping and other shipping services as a result.
Simplified Documentation
With DFM it is much easier to manage all the documents during shipping since they are stored across digital mediums. In addition, these platforms ensure that all the necessary forms are easily accessible, can be shared among key personnel, and are completed accurately and properly to avoid mishaps and non-compliance complications.
Factors To Consider When Choosing A DFM Platform
Using DFM solutions is essential for businesses; however, choosing a platform is not a decision that should be made blindfolded. Three key factors to consider prior to making such a decision include:
Interface
Ease of use is important as it enables shippers and carriers alike to find the tools they need. When choosing a platform, make sure that the interface is friendly and easy to use, with instructions that are not complex to access or understand.
Expert Support
A strong customer support service in a specific platform can help a user deal with operational difficulties, gain information on how to use it, and, in general, create a positive experience. Having readily available customer support is often a feasible indicator of a high-quality DFM platform.
Carrier Network
Digital freight matching (DFM) platforms help shippers and carriers access larger and more reliable networks, which increases the probability of getting desirable matches.
Industry participants with vast networks are likely to provide shippers with more choices and superior service levels, guaranteeing that a shipper can always secure a suitable carrier in the industry if needed.
Can AI Influence DFM?
AI capabilities have the potential to create great improvements in DFM solutions. These capabilities can lead to automated processes based on data-driven algorithms.
In addition, the application of machine learning methods can also help enhance load matching, predict future demand, and outline the best route. AI capabilities, when integrated with DFM solutions, can also help eliminate operational redundancy and free up human resources for core operations.
Key Takeaways
DFM platforms are aimed at matching shippers to carriers and come with advantages like improved productivity, timely information retrieval, cost reduction, flexibility, and more.
Some of the areas of significance to measure while evaluating a DFM platform include the usability of the platform, the availability of customer support, and access to a carrier network.
By considering these factors companies can make an informed choice pertaining to the integration of a DFM solution that improves logistical efficiency.
Frequently Asked Questions (FAQs)
What’s the difference between traditional and digital freight matching?
The digitization model of freight matching is very different and efficient compared to the traditional approach where the matching was mostly done manually. A key difference is that digital freight matching can be automated and are not error-prone like their manual counterparts.
What are the 4 types of freight?
The four categories of freight are full truckload (FTL) which reallocates the entire trailer load, less than truckload (LTL) which offers a partial truck space, intermodal freight which involves the use of more than one mode of transport and expedited freight that can be of FTL or LTL but is urgent.
What are the principles of freight forwarding?
Principles of freight forwarding include a well-coordinated logistic plan, adherence to safety protocols and legal regulations, and secure relations with the carrier and the end customers. Foresmart is such a freight forwarding company you can trust.
