How Technological Innovations Are Changing the Face of Freight Forwarders

May 26, 2005
The Internet, XML, and other technologies are driving advancements in EDI, tracking, and information integration that are helping freight forwarders give customers more competitive services

The Internet, XML, and other technologies are driving advancements in EDI, tracking, and information integration that are helping freight forwarders give customers more competitive services

There are days when logistics giants at companies like UPS, FedEx, and DHL, probably wish the Internet was never invented. That’s because smaller, more agile freight forwarders are using Internet technology to provide more integrated service offerings, slash overhead costs, and level the playing field.

Freight forwarders such as Pilot Air Freight move goods through partnerships with third party service providers—often defined as an ‘open’ or ‘horizontally integrated’ system. It used to be that ‘closed’ or ‘vertically integrated’ systems such as UPS and FedEx were the only way to manage costs and on-time delivery. Today, new technologies are changing that equation forever.

From EDI to online tracking to customer relations, the Internet and other open technologies are enabling Pilot and other freight forwarders to provide the same service levels of their enormous competitors, at competitive or even lower cost, and with much more personalized attention.

This is good news for shippers everywhere, and the industry as a whole, because increased competition from freight forwarders ultimately drives down costs, inspires innovation, and improves customer service levels across the board.

The mission of transportation and logistics companies is the same today as it was 35 years ago when Pilot Air Freight was founded: consistently deliver the freight on-time and as cost-effectively as possible. New technology is allowing freight forwarders such as Pilot fulfill that mission more efficiently than ever before.

Nothing has had a bigger impact on customer service than the Internet. And Pilot’s CoPilot™ online shipment navigator gives customers one of the most comprehensive Web-based tools in the industry.

CoPilot enables shippers to manage up to 24 months of data, including shipment history. They can also customize sophisticated shipping reports to analyze budgets and trends, build an address book with unlimited storage capacity, and ship anything anywhere in the world conveniently online, at any time of day or night.

CoPilot continues Pilot’s track record of proactive customer service. It’s a powerful example of how Pilot is leveling the playing field. CoPilot offers shippers a seamless, efficient, and customized navigational tool, as robust as Pilot’s vertically integrated competitors.

Fast, ubiquitous, and cost-effective, the Internet is now achieving its full potential in transportation and logistics. Part of that potential is full cooperation between the Internet and a freight forwarder’s logistics infrastructure. After decades of success with the PACE (Pilot Automated Customer Exchange) system, Pilot spent the last two years upgrading to Air-TrakTM.

Produced by logistics consulting leader Chuck Schubert & Associates, and further customized by Pilot’s IT team, Air-Trak is a sophisticated software system that tracks Pilot’s entire network of inbound and outbound shipments.

Pilot is now integrating the Air-Trak infrastructure with its airline partners to make EDI more efficient than ever before possible.

Air-Trak gives Pilot’s operations and customer service personnel an instant picture of the company’s worldwide network, so they can route thousands of pounds of freight in the most cost-efficient and timely manner.

For example, Air-Trak might show that one carrier has the best overall on-time percentage for the year, but another has a higher percentage this month. That’s crucial information for a Pilot manager who wants to move freight through a partner that’s performing at their peak right now, not last quarter.

Air-Trak technology also helps Pilot achieve logistics milestones by providing status updates and highlighting shipments that may be in jeopardy of missing service. These alerts give Pilot managers the flexibility to make last-minute shipping changes, and affect on-time performance.

But even with the most sophisticated technology, freight forwarders are only as efficient as their partners. While the open systems that define freight forwarders have several advantages, they also present formidable challenges.

Chief among them: accurately tracking freight when it’s on a partner’s aircraft, trying to standardize a system that includes hundreds of different airlines, and relaying accurate and timely information to customers.

As an alternative to having a private fleet, open system companies must rely on tech-savvy airline partners. That’s why Pilot Air Freight was at the center of launching the World Freight Alliance (WFA) in early 2004.

The WFA is a strategic partnership that provides shippers the efficiencies of an international forwarding network, along with complete cross-continent, real-time tracking and tracing, warehousing, customs brokerage, and IT solutions, through the most dependable carriers in the world.

WFA members include leading independent freight companies, such as Vanguard Freight Systems, Two Way Forwarding, Aramex, Posten Express, and Universal Express, with service throughout North America, South America, Europe, Asia, Africa, and Australia. When customers entrust freight to a WFA member, they can expect their shipments to be tracked every step of the way, and delivered on-time.

Industry-wide advancements in data exchange have also played a major role in strengthening ties between freight forwarders and their airline partners. In the past few years, most airlines have overhauled their EDI systems.

Airlines recognize they can impact their bottom line by reducing paper records, eliminating duplicate data entries, and embracing software that increases efficiency and tracking.

As airlines streamline their EDI systems, freight forwarders such as Pilot are becoming as integrated as their closed system competitors, even while scheduling thousands of flights a day on hundreds of airlines around the globe.

Through fully integrated EDI systems, Pilot Air Freight and its partners can track the status of millions of shipments annually, make last-minute rerouting changes, send customers e-mail alerts, and produce electronic invoices.

And Pilot makes this information even more efficient by working with virtually any format or transmission protocol that its customers and partners prefer—including HTML, XML, HTTP, FTP, POP3, ANSI, Word, Excel, and more.

Through technological advancements in its online services, tracking systems, and EDI, Pilot Air Freight provides transportation and logistics as vertically integrated as the big guys—but without forcing customers to absorb the costs of owning and operating a proprietary communications network, an airborne fleet, and massive centralized hubs.

That’s the open system difference.

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