In 1802, in a letter to the Secretary of the Treasury, Thomas Jefferson wrote a powerful statement: “Information is the currency of democracy.” More than two hundred years later, Thomas Jefferson’s concept of “information as currency” resonates loudly in the digital age. Today, information is the global currency, a consumable commodity that must be managed extremely well, just as Wall Street giant Exxon approaches an untapped oil field: mine it, refine it, and make it profitable.
We live in a world where all content is evolving to digital, mobile, virtual and personal. The personal aspect is not only personalization of content and services, but also the ability for anyone to control the information they receive, as well as when, where and on what device they receive it. Information is the currency that powers connections and drives business forward.
While the volume of information accumulates rapidly, shipping and logistics businesses across the world should manage data like Wall Street giants Exxon, IBM, Google, Facebook, and Microsoft. “Information as currency” is at the forefront of the paperless revolution, as well as the ability to transform information into meaningful and rich data that organizations can use to support better decisions and grow their market share. Information management and document management initiatives play a vital role in this evolution, but businesses should delve deeper into the possibilities of document management, beyond just governance and eliminating paper.
The paperless office is no longer an elusive goal – especially with COVID-19 moving many businesses into home or other remote environments. Many shipping businesses have started to evolve into a paperless environment for internal processes, such as accounting and customer service. These systems have increased efficiencies, enable faster communications and provide vital data to make better business decisions. A 2014 study released by the Association for Information and Image Management (AIIM) found 68 percent of respondents are seeing the growth of paper stabilize, or reduced paper within their organization. The reality is that the stats speak loudly about the fact that we are still stuck on paper, and that is especially true for shipping and logistics.
When AIIM asked about what happens to information that’s generated digitally from the web, forms or PDFs, more than 40 percent of respondents said they print it and then scan it. It’s flowing into the organization electronically, yet it’s still ending up as paper and then scanned into an electronic format.
The two primary drivers for still using paper include the low adoption rate of digital signatures, especially in businesses that require a physical signature, and the fact that business process automation and workflow never evolved to the enterprise. In a 2013 AIIM study on business process management, more than 50 percent of respondents indicated that half or more of their business processes are not predictable and straightforward.
For example, in transportation and logistics, the paper form for proof of delivery or a bill of lading still exists. In healthcare, prescriptions must be maintained as part of the prescription record. Processing these paper forms is time intensive, error prone and costly. Information enters your business systems through workers who key the data into the computer or scan the documents. Imagine moving that information right from the point of work to your business systems in mere seconds?
Shipping and logistics businesses are beginning to move their businesses to digital, but paper still resides in old file folders in many organizations. When in the office, we use technology to capture, organize and share the information in paper form via document scanning, but this process has its downfalls. You need a laptop and Internet connection, and what if you are somewhere without both and quickly need to record important information? Sometimes electronic versions are not legible, and paper often comes in different sizes and forms. The list of challenges is lengthy.
Capturing critical shipping documentation goes beyond simply scanning documents and images. Shippers everywhere are starting to simplify their business processes with mobile technology, and nowadays documents don’t have to be sent to a scanner at all. Mobile capture of data from documents, whenever and wherever they are created, is gaining huge ground. By leveraging tablets and smartphones, mobile capture extends capture capabilities of shipping documents to the point of origin. It provides the ability to capture important pieces of information from forms or documents, and automatically digitize and submit the data. Customers and employees can securely upload shipping documents to wherever they need to be, facilitating real-time response and the immediate processing of documents, making information readily available for better and faster decision making.
The operational efficiencies gained from mobile capture are tremendous:
Data flows into the enterprise in high volumes and in a wider variety, and organizations are struggling with how to mitigate business risk and maximize value. The right document management solutions can remove the challenges of integrating physical documents into electronic systems and provide shippers with a roadmap to an all-digital environment. Within that roadmap, Enterprise Information Management (EIM) is a necessary discipline to structure and govern information assets across the enterprise to improve efficiency, increase transparency and generate more business insight. EIM recognizes information as an asset that drives business outcomes and transforms how we view data – information into currency or knowledge.
EIM is a unique opportunity to control volumes of data located in silos of structured and unstructured databases across the enterprise. It offers a comprehensive approach to identifying, classifying and governing data that resides in email servers, enterprise resource planning, document management systems, and more. EIM is a preface for the Big Data strategy.
A common challenge for Big Data initiatives is unstructured data – and more than 85 percent of the data in enterprises is unstructured, meaning information in different files and formats that is not easily interpreted by traditional databases. It’s important to understand that mining large volumes of data to produce intelligent analytics is dependent on structured data or data housed in databases. The center of the Big Data revolution is data mining, machine learning, advanced analytics and more to discover golden nuggets within data. Shippers can rapidly analyze data, turning it into actionable insights and maximizing its value.
Forward-thinking shipping and logistics companies seeking Big Data initiatives and Big Data analytics need the right tools and an information governance strategy. A document management system is at the heart of governance to energize your enterprise and drive positive outcomes.
While China and main Asian countries had been closing their plants back in March, the Western world has continued to consume. Later, this trend followed into Europe, next to North America and then South America. So, we see no supply in Asia, and when supply started there was no demand (in the U.S and EU.) Once we were in June, we started to see a spike in container volumes based on strong demand coming back. We need to understand this demand has been primarily in relation to the imbalance between supply and demand. In the U.S., the Inventory to Sales Ratio went up to 1.68 during May and then saw a free fall.
This was a real stress test for all importers/exporters’ supply chains, and its main providers – ocean carriers, freight forwarders, truckers, and warehouses. Ocean carriers have managed this process very well for themselves by managing supply through the alliances they had been forming since the last crisis.
Freight rates from Asia to the U.S. West Coast had increased by 120% (July 2019 vs. July 2020 comparison) significantly on a global scale. Space got super tight, and companies had to wait for weeks for their merchandise to be actually shipped out. Service levels from carriers had tumbled.
1. When companies work with a few ocean carriers, they limit their accessibility.
This is not realized when there is abundant space/equipment. However, once carriers decide with blank sailings or cut the allocation per each company, they basically leave customers in a void.
The COVID-19 era has been a clear indicator that carriers learn how to manage the supply. So, the blank sailings are here to stay. Companies will not have the same comforts of booking cargo on whichever date they prefer, whenever they want. They will need options, so they will have to increase their cooperation with freight forwarders if they want their cargo to be shipped at a competitive level and at times that they would prefer to ship. They will need to widen their perspective.
2. Carriers have been promoting technology – instead of human interaction – for years now.
The main idea is, and has been, doing the same amount of work with less people. So, carriers had been reducing the number of their employees domestically. The personal interactions both through sales and customer service people had been diminishing.
With COVID-19, this withdrawal will accelerate. Carriers have now experienced that they can technically operate by being completely remote from their customers. They can still move cargo when their customer service people send emails without names, are not accessible as much by phone, and have delays on their documentation turnaround times.
So, the companies who are looking for that simple one phone call access or interacting with same person that knows their expectations and challenges will only have the option of working with a freight forwarder rather than a carrier. The trend of carriers stepping away from customers will accelerate.
3. This year, companies once again experienced the power of committing into real partnerships with their supply chain providers.
When prices are going up by 30% to 40% every month, and when paying higher is not the solution most of the time, companies have the need for partners that present out of the box solutions, that will be flexible enough to turn things around from one day to another.
In a high-demand market, it is not enough to post a price or show a schedule on the internet. Companies need a well-balanced combination of technology with proactive people that understand their needs and present them with options before the questions are even asked. And, this need will push companies to the way of freight forwarders.
We have too many moving parts with too many external factors affecting day-to-day business. And, with all that, freight forwarders are the masters of these puzzles with their exposure to all those pieces of the industry.