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The Digital Transformation of International Transportation: How Technology is Revolutionizing Shipping Operations

Grant Sernick
November 28, 2023
min read
The Digital Transformation of International Transportation: How Technology is Revolutionizing Shipping OperationsThe Digital Transformation of International Transportation: How Technology is Revolutionizing Shipping Operations

The last quarter of supply chain news has focused on a couple of significant exits from the supply chain transportation world. Two startups, aiming to improve the world of freight transportation and logistics, didn’t quite revolutionize age-old processes as they projected. Add to the news out of Flexport and Convoy the myriad supply chain tech companies that have gone through extensive layoffs, and it’s enough to write it all off as a bad experiment. Don’t try to fix what isn’t broken.

But if international shipping wasn’t broken, it was hanging on by a thread.

Before the shift to digitization, supply chain stakeholders had constant issues that were only exacerbated by a rise in e-commerce and last-mile residential deliveries. (Not to mention the far-off specter of B2C sales and the resultant deliveries.) Those in the supply chain already had trouble with shipment visibility. The simple fact of not knowing where shipments were led to poor planning, routing, and other organizational performance issues, as well as extremely unsatisfied customers. Supply chain data was siloed, and collaboration, even within the company itself, was rare. The inability to locate specific products within shipments went hand-in-hand with this complete visibility blindspot, no matter the mode. The movement toward supply chain digitization has improved everything from carrier performance measurements to invoice auditing.

Supply chain digitization is best seen through a holistic TMS, one that breaks technology out of a myopic shipment-only lens. Historically, that’s been the glaring issue with TMS applications: they only focus on the shipment itself. Manufacturers have had to tap into an ERP system for visibility into the product side. An international TMS empowers BCOs with real-time tracking of shipments, ensuring timely deliveries and enabling proactive management of any transit issues. This has substantially reduced delays and the associated costs of freight transportation. The best new TMS applications also keep an eye on the product side, creating immense added value. Shippers use these best-of-breed TMS applications for detailed shipment planning, which allows users to not only plan each and every shipment but back up that plan with real-time tracking and visibility, an innovation that only a few companies can claim to provide today.

Without the rush toward digitization and a renewed interest in the supply chain from the C-suite, none of this would be possible. The digital transformation of international transportation is fueled by digitization but spurred on by the movement of the supply chain from a back-office function to a relevant and vital part of every global corporation. More importantly, supply chain digitization delivers tranquility in a turbulent world.

The prospect of turning onerous manual processes into quick digital work while eliminating errors and reducing costs is still alive and well.

Supply Chain Management’s Journey from Analog to Digital

Digitization of the supply chain began to reduce manual processes, bleed out complexity in global logistics, and bring some ability for forecasting to companies that were just beginning to pay more attention to their logistics operations. Technology streamlined the supply chain while increasing resiliency, giving shippers greater and more exacting control over their shipping ecosystems. The pandemic put the promise of supply chain digitization to the test, and companies who had not considered TMS applications or other technology soon prioritized upgrading their systems.

The Analog Supply Chain

Before 2015, Excel spreadsheets, phone calls, emails, and even faxes fueled the pre-digital supply chain. Large BCOs and shippers had been running their freight operations using these tools for years, focusing on cost efficiency above all else. Though this manual handling of logs, records, and paperwork led to inefficiencies and errors, they were getting by well enough, so improvements were not sought out. Increased demands from consumers living in a B2C digital world meant that the status quo for shipping would have to shift.

Initial Steps Toward Supply Chain Digitization

Shippers didn’t one day wake up in 2016 to an international TMS that empowers BCOs with real-time tracking of shipments. It’s what they needed, but the supply chain technology world can move at a glacial pace. Global supply chains benefitted from TMS and ERP technologies, but the promise of a single technology that united shipment and product processes was lacking. BCOs needed this holistic view to ensure timely deliveries and enable proactive management of any transit issues. During the initial period of supply chain digitization, the industry created a few digital tools for better visibility and decision-making. These innovations came as the e-commerce boom demanded faster and more accurate supply chain operations, but the real payoff was to come.

In 2019, more digital applications and single-point solutions started gaining traction for enhanced transparency and efficiency. Supply chain tech startups were getting more interest from large shippers, and it seemed like supply chain digitization was gaining momentum. With the rise in technology came the knowledge that visibility technology is only as good as the data used. That is true for any supply chain technology. Shippers started looking for a platform that embraces all the documents floating around international supply chains, from commercial invoices and packing lists to PGA files and certificates of origin. They found the answer in 3rdwave’s TMS, which rewrites the checkered history of the TMS for a revolutionary view of transportation management.  

COVID-19 Causes Shippers to Rethink Supply Chain Processes

Toilet paper. That simple phrase evokes vivid memories from each and every supply chain professional. The onset of the COVID-19 pandemic showed shippers that rock-solid global supply chains could crumble under enough pressure. Companies that had already embraced digital supply chains fared better than their competitors. Those who hadn’t yet made the switch made plans to digitize as soon as possible.

The pandemic highlighted the need for supply chain continuity in the face of disaster. In the years after the onset of the pandemic, shippers and BCOs flocked to digital platforms offering real-time tracking, automation, and intelligent forecasting. During this time, global geopolitical uncertainty and increased natural supply chain disruptions forced transportation pricing skyward. If protecting their supply chains against other global crises didn’t force some digital supply chain adoption, rising freight shipping costs sure did.  

The Modern Digitized Supply Chain

In today’s supply chain, costs and capacity are still maddeningly unstable, and shippers are looking to technology to bring some predictability to a very uncertain supply chain world. Supply chain silos are a thing of the past, as collaboration up and down the supply chain is crucial. End-to-end visibility and the ability to execute a new supply chain strategy that arises during a shipment are essential. Supply chain digitization is no longer a nice-to-have.  

How Technology Has Revolutionized International Shipping Operational Efficiency

Transportation management systems are at the root of supply chain digitization. These digital tools orchestrated the supply chain revolution by creating efficiencies, transparency, and cost savings for shippers around the globe.

While digitization does help shippers save money, supply chain technology also boosts sustainability goals. Optimizing routes and loads through a TMS reduces carbon emissions created by shipping freight, creating a metric for DEI initiatives.

Here are seven additional attributes to look for when selecting a TMS:

Detailed Shipment Planning

The best digital supply chain tools enable shippers to plan every shipment, mapping out what needs to go where and when. This plan also needs to be tracked against, but the first part of the shipment puzzle is an attribute only offered by the best TMS companies.

Shipment Visibility  

TMS applications integrate with carriers across all modes, ocean terminals, drayage services, and forwarders to provide the latest shipment updates. This is the best way to get more information into the platform and enable the best decisions. Exception-based alerting ensures shippers pay attention to problem shipments and don’t get lost in the white noise of data overload.

Capturing the data is just the first part of visibility. The best supply chain technology providers can validate and combine this visibility data to give shippers a holistic look into their global operations. Since not every division of the organization speaks the same language, the final step of visibility is translating the shipment information into data that is accessible to all stakeholders.

Automation of Logistics Processes

Valuable and experienced supply chain employees should not be stuck in data entry purgatory populating an Excel file. They should be making high-value decisions and strengthening operations. With a TMS, shippers don’t need to worry about lower-level tasks.

Optimized Route Planning

Routing is extremely important in today’s global supply chain. With the help of machine learning and AI, TMS applications look at supply chain pain points on each route. This information is then measured against delivery and cost implications to create the best possible shipping path.

Predictive Analytics

Wouldn’t it be great to identify potential issues before they become major problems? Would getting an early alert that a critical shipment could miss its in-warehouse date save some heartache?  It’s all possible when a TMS harnesses big data analytics, empowering shippers with informed decision-making backed up by historical and real-time shipping information. Predictive analytics also helps forecast demand, leading to improved capacity planning and resource allocation.

Compliance Management

Navigating the labyrinth of international shipping regulations has been simplified with TMS, which automates compliance management, ensuring adherence to various customs and trade laws, and reducing the risk of fines and delays.

Cost Control and Reduction

Shippers can’t reduce costs without a granular view of pricing, just as planning and executing shipping decisions is worthless without understanding the cost implications of those decisions. TMS brings those costs front and center. Existing freight contracts are seamlessly integrated into both the planning and execution modules, allowing shippers to plan for cost implications and then measure during execution.

Harnessing Digital Innovation for Meticulous Shipment Planning and Execution

The true benefits of the digital transformation of international shipping are realized in detailed shipment planning. 3rdwave is among a very small number of companies that revolutionize shipping operations by empowering users to not only digitally plan every shipment, an innovation unto itself, but also track-and-trace that shipment, with full visibility, all the way to delivery. Technology specifically designed for international transportation enables shippers to seamlessly manage both transportation and trade compliance. The best TMS applications provide execution and cost visibility at the Product/SKU level for all shipments. Contact us to learn how 3rdwave empowers shippers with improved efficiency in international shipping operations.

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