Paper weight
Freight forwarders are masters at moving freight, as well as paper across their desks ' and lots of it!
| Saphir |
'Honestly, I think there is more paper today than before computers,' said Albert Saphir, president of Weston, Fla.-based ABS Consulting, a firm specializing in customs broker and forwarder matters.
There are numerous reasons why today's forwarders are unable to rid themselves of paperwork, but one of the biggest obstacles is that 'too many business partners ' local and overseas ' still deal with paper as their primary method of correspondence,' said Saphir, who annually visits numerous forwarder offices.
Paper documents have also long been the forwarder's security blanket, so to speak, against legal actions, government audits and customer service inquiries. These documents are tucked inside manila folders and contained in filing cabinets until at a certain point they are hustled off in lots to a warehouse for storage.
Forwarders can easily spend tens of thousands of dollars a year in storage fees, never mind dealing with the logistics nightmare that may unfold when an employee must have a particular file or document pulled from storage, said Cara Fascione, vice president of transportation and logistics for Omtool, an automated document management services provider.
It's not as though there are tools on the market to help forwarders absorb the physical burden of paperwork. Omtool, for example, has helped other paper-intensive industries, such as health care, finance and legal, find ways to receive, organize and track documentation in an automated fashion.
Integrated carriers, namely UPS, FedEx and DHL, have done a remarkable job within the industry to eliminate paper for their shipments, including commercial invoices in paper form. There are even some forwarders that have started to head in this technological direction.
'Expeditors is probably one of the best examples out there that has very little paper left. I think they even shred everything they receive, unless it is originals needed for a certain transaction,' Saphir said. 'It's kind of eerie when you go to some of their offices and do not see the mountains of paper records you see elsewhere.'
Expeditors may be best described as a 'technology company that happens to be in the logistics business,' Saphir explained. 'The amount of IT staff they have is enormous and they develop a lot of their own applications.'
Most forwarders, however, don't have the financial resources to support a large staff for in-house technology development. Yet the documentation burden for these companies is real. 'Many of them are going crazy with all the paperwork,' Fascione said.
E-mail has helped the industry to eliminate physical delivery of paper documents in recent years. But once these messages arrive in the forwarder's computer, printouts are often made for rekeying data into other programs and to accommodate manual recordkeeping.
Forwarders are generally apprehensive about considering sophisticated IT applications, thinking that it will cost them millions of dollars to implement and radical changes to their operations. But that's starting to change. 'Now there are ways to do it that are more affordable and you can immediately see the return on investment,' Fascione said.
She recently met with a forwarder who employs about 250 staff in the United States and an equivalent number abroad. The company was in the market for a $125,000 system, but couldn't find one to meet its needs for under $250,000. Some of the inexpensive IT tools it did find only met about 20 percent of its requirements.
'Most of their information comes in by e-mail and they wanted to route it to where it needs to go, build upon it when necessary, and store it,' she said. 'Our system can meet this requirement significantly below their budget.'
Andover, Mass-based Omtool started in the early 1990s as a fax services provider, before it moved into the electronic document capture, conversion and distribution business. According to the company, its AccuRoute system is designed to be accessible from any desktop computer or network-enabled scanning device and makes documents immediately accessible where and when they are needed.
'In the case of a forwarder, it allows it to establish an electronic filing cabinet,' Fascione said.
Other benefits of AccuRoute for forwarders include:
' Centralization and management of 'mixed-mode' documents, meaning it can combine both paper and electronic documents into a single distribution.
' Creation of specific document formats and document compressions.
' Integration with existing IT investments.
The entry price for implementing AccuRoute is about $12,500, and the system is scalable according to a forwarder's needs. The implementation takes about two days. 'You don't have to change everything in one swoop,' Fascione said.
Omtool competes mostly with Hyland Software and EMC Corp., but these companies offer programs that are generally more sophisticated and expensive than the average forwarder requires or can afford, she added.
Will the forwarder industry ever be able to clear its desks of paper? Not likely anytime soon, according to Saphir.
'The forwarder segment is highly fragmented and the tens of thousands of carriers they use make it virtually impossible to go paperless as one system does not exist,' he said. 'I know several forwarders who are trying to do whatever they can electronically only with ocean and air exports and it seems to work well on certain lanes if all play along.'
The International Air Transport Association announced that its e-freight for domestic shipments went live in the United States in early July and is operational at 58 U.S. airports. IATA's e-freight improves service and cuts costs by taking the paper out of the air cargo supply chain. The implementation team in the United States was led by American Airlines Cargo in close cooperation with forwarding giant DB Schenker Logistics.
International e-freight in the United States went live in October 2008 and operates at Chicago, New York and Miami for imports and exports, and Atlanta, Dallas-Fort Worth and Los Angeles for imports only. There are plans to increase the number of U.S. ports for both export and import over the coming months, IATA said.