TL;DR Here are 8 reasons why spreadsheets are not suited for managing prices in freight forwarding:
Inconsistent Formats: Carrier rate sheets come in varying formats. It is quite labor intensive to compile and manage data from multiple sources in spreadsheets.Error-Prone: Manual data entry typically associated with spreadsheets increases the likelihood of mistakes, leading to inaccuracies in pricing. Unsuitable for advanced pricing models: Spreadsheets are inadequate for building complex pricing strategies and advanced algorithms owing to its inability to handle sophisticated calculations.Collaboration Issues: Spreadsheets have limited sharing capabilities and thus hinder teamwork. They specifically don't offer real-time collaboration, causing delays and misaligned information.Time-Consuming: Managing and updating spreadsheets is labour-intensive, consuming valuable time of your team. This can lead to reduced productivity.No Real-Time Data: Spreadsheets can't provide instant access to current data, leading to outdated information. Real-time updates are crucial for accurate pricing in freight forwarding.Access Control: Spreadsheets lack robust security and user access controls, posing a risk to sensitive information. Without proper access management, data can be easily compromised.Lacks Advanced Analytics: Spreadsheets don't support advanced data analysis or visualization. This limitation prevents the extraction of actionable insights and trends necessary for strategic decision-making.Don’t get us wrong - Spreadsheets are a good option to store and manage basic data. It is useful, familiar, and, most importantly, free.
But it falls flat (terribly!) when you are dealing with complex and dynamic data like pricing, that too in an industry like freight forwarding.
Go ahead and ask your pricing team. We’re pretty sure some of them hate working on Excel and Google Sheets on a daily basis. Don’t blame them, though. The endless limitations offered by spreadsheets are the actual culprits.
This brings us to the key question - Why exactly should you pay to get liberated from spreadsheets?
The following challenges answer this question.
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Challenge #1: Rate sheets provided by carriers are usually in different formats Rate sheets vary from carrier to carrier. Everything from the format to the data presentation style changes. For instance, a carrier in China might share the data in a PDF, while an American carrier will display the data on their website. Either way, your pricing team has to work with multiple files(or websites) and comb through thousands of rows on a daily basis.
And this is what typically happens after the pricing team that is reliant on spreadsheets identifies the required data:
They will manually copy-paste all the data from different sources into a unified spreadsheet. They will organize the data in a format that they generally follow. They then share the spreadsheet with the sales team for them to refer to when a customer inquiry comes in. Now, this is grossly inefficient. Every week, a dedicated pricing person has to spend a minimum of 4-6 hours collecting and organizing the data in a spreadsheet that is consumable by the sales team - time that could be utilized in coming up with pricing strategies for improving the margins. Yes, outsourcing it to a third party is a possibility. But this could backfire when the 3rd party vendors are not trained in data entry for the logistics industry. It can lead to errors.
And that’s why you need to replace your spreadsheet with Freightify which comes loaded with the contract automation feature. This feature helps in cutting down your time(by at least 50%) inputting the data and organizing it into a format that you want either on Freightify or on a TMS platform like Cargowise and Magaya.
Challenge #2: Manual data entry is error-prone Don’t believe us. Check out this study - It states that 9 out of 10 spreadsheets contain errors. Errors could sprout due to a lack of version control, manual data entry mistakes, copy-paste errors, and accidental overwrites. Some of you might say - “We have automated data entry using macros. It’s not going to affect us”. Well, macros are not fool-proof. Your entire pricing strategy can go wrong if one cell is exposed to a massive revenue leakage.
Remember the controversy of Fannie Mae, where they had to restate their unrealized gains by $1.2 billion after discovering a minor spreadsheet error?
And let’s not forget the fact that carriers keep changing their rates at least a couple of times a month. The errors can easily multiply because you need to update the sheets frequently. According to Researchgate, 12% of failures in the freight forwarding industry are due to information and communication errors.
So we'll go ahead and say this with great confidence - For any operation of this scale, using spreadsheets creates more harm than good.
You already know that Freightify has a Contract Automation System in place. But did you know that it has a conversion accuracy of 99.8%? This is achieved because of its ability to automate repetitive tasks such as conversion of FAK rate sheets into an easily consumable format.
Challenge #3: Not useful for advanced pricing models You want to do simple calculations? Go ahead with spreadsheets. However, the freight forwarding industry demands pricing calculations that are a lot more complex than that.
And that probably explains why many freight forwarders using spreadsheets struggle to adopt advanced pricing models. They are unable to adjust pricing based on complex factors like the value they deliver to their customers, the price that customers are willing to pay, or even the price that can knock the socks off their competition. This also means they are unable to negotiate better terms with carriers and end up missing out on opportunities to make more profits For instance, when you use spreadsheets, you lose track of the top trade lanes of your customers, a key piece of data that you could have used for negotiating with carriers.
Freightify is miles ahead of spreadsheets in this area. It offers the following capabilities to manage advanced pricing models -
You can easily adjust pricing and margins based on your customers, sales data, trade lanes, or even based on specific contracts. You can define a global rule that lets you set a minimum required margin for each rate. This is a great way to ensure that you don’t miss the lowest margin possible. You can tailor the analytics dashboard to your precise needs. This will help you better understand how rates have changed for a trade lane over a timeframe. Through the same analytics dashboard, you can instantly identify the key trade lanes that have brought in the highest margin or even the best-performing carrier. Such valuable insights can help tailor your pricing strategy, facilitate better negotiations, and improve your freight rate management operations.
Challenge #4: Lack of collaboration, visibility, and updates You need to constantly fine-tune your pricing strategies based on market sentiments - You probably know this already. But do you know who has the maximum visibility on what is happening in the market? Your pricing team? Nah! It’s your sales team. They are the ones in constant touch with the outside world.
This means there will be a lot of back and forth communication happening in real time between your sales team and the pricing team regarding pricing strategies. Similarly, if there is any pricing change, it has to immediately reach the ears of your customer operations team so that they can book the shipments without any errors. Also, the finance team has to be apprised so that they can follow up on accounts payable.
Unfortunately, spreadsheet tools like Excel and Google Sheets operate in silos and cannot talk to other tools. This means when you maintain all the pricing data in a spreadsheet, you need to rely on a series of emails and random phone calls to facilitate communication between different teams. This is inefficient and prone to communication errors.
One way out of this predicament is to undergo a rigorous change management process involving the set up of central repositories, established procedures, and designated document owners. This will obviously ensure accuracy and consistency in your freight rate management. However, this entire process can be time-consuming, requiring extensive manual data consolidation and verification. At the end of the day, there has to be a tool that fits your ways of working rather than the other way around.
And that tool is Freightify. It offers the following capabilities when it comes to data visibility, updates, and collaboration:
Freightify has digitized and centralized both SPOT and contract rates. This gives you granular information about pricing that you can further use for different activities. Freightify also gives your pricing team greater control over managing rates. It lets your team make bulk updates based on any amendment specific to surcharges and trade lanes. This makes it very easy to manage contract rates. Freightify also offers a seamless way for pricing, sales, operations and finance teams to refer to all the transactions in every stage of the customer journey. Of course, only relevant data can be accessed if the admin has set up access controls. You get access to 90 days of historical rates and customer transaction history. This enables your operations and finance teams to handle payments or send follow-ups for amount settlement. Pricing teams also get better visibility into customer behavior that helps them benchmark rates and margins specific to the customer. Challenge #5: Managing spreadsheets is time consuming ‍
Excel lacks standardization. There are several issues surrounding this simple flaw. For instance, every individual user will modify the pricing spreadsheet according to their preferences, making it hard for other team members to comprehend the data or process it when they take over the job. John Berry, Senior VP of IT, OEC Group, rightly states -
“Each person that adds updates to the data does so in their own personalized way with little control. Often, it requires a painstaking clean-up process before any kind of analysis can be performed."
On top of this, the pricing sheets are usually outdated and the pricing team has to spend several hours every week to keep it up to date.  In fact, according to a study, 38% of freight forwarder’s time is spent on maintaining Excel and 54% of them take a week’s time to perform the monthly closure.
Freightify helps in keeping the rates up to date and standardized across different carriers. With advanced contract rate automation, it can process contract rate sheets accurately and in a timely manner. Freightify has also partnered with many LCL providers and NVOCCs and have standardized their rate sheet formats so they are readily available on the platform.
Challenge #6: Spreadsheets lack real-time data access Spreadsheets simply cannot provide immediate access to the most up-to-date information. This is a crime in a highly dynamic industry like freight forwarding. Imagine a scenario where your sales team and operations team are unable to access real-time information about contracted pricing. They are relying on emails for the latest information from your pricing team for every transaction processing. This is not only frustrating but can lead to the loss of essential margins due to a lack of critical information at a critical time.
But with Freightify, things are different. It offers real-time access to your LCL & FCL contract rates and real-time spot rates from agents & carriers. This lets your sales and customer operation teams stay on top of time-sensitive and high-value customer inquiries.
Challenge #7: Difficult user-specific access control In any organization, there will be multiple stakeholders handling data for different purposes. As a result, it becomes critical to set access control for different types of users and prevent unintended alterations to data. For instance,
The head of the pricing team might need edit access to all the pricing data as he/she is the main decision-maker when it comes to setting margins. A pricing analyst, on the other hand, might need only update or input access to the rates. A sales or operations team will be happy with view access. When you have such clear access controls, you can ensure that everyone can access specific information without compromising the integrity of the pricing data. Having a clear log on who updated what can also help in maintaining proper accountability.
Currently, none of the spreadsheet tools have efficient logging mechanisms or offer the ability to easily set user-specific access controls. You need a good level of technical expertise and continuous management to ensure integrity of data in Excel.
With Freightify, you can not only set different access controls based on roles but also manage them for specific modules. For instance, you can set controls for filling the rates, setting margins, or even bulk updating the data. Freightify also offers a change and audit log to track updates on the sheet and revert back to previous versions in case of any mistakes.
Challenge #8: No advanced analytics Traditional spreadsheet software like Excel often lacks the sophisticated features required for in-depth data analysis. It limits you to basic functions and standard visual charts. This deficiency inhibits your potential to explore complex data sets and identify trends and patterns in your pricing data for making informed decisions. Also, you cannot perform real-time analysis of data in spreadsheets because it relies on manual input or scheduled updates to refresh data.
With Freightify, you get access to a dedicated analytics dashboard that delivers valuable insights ranging from basic insights like top-performing trade lanes to deeper insights on bookings and sales performance. And the best part is you can perform real-time analysis of data as it is constantly refreshed to reflect the most recent updates. Such valuable insights and real-time analytics capabilities are essential for better freight rate management.
Wrap Up While spreadsheets have long been the staple for many freight forwarder pricing teams, their limitations are increasingly evident in today's dynamic and complex freight industry. The long list of challenges highlighted in this post simply underscores the need for a more robust freight rate management solution. By embracing a platform like Freightify that is more tailored to the unique needs of freight forwarders like you, your pricing teams can become more efficient in a short span. So, if you are ready to leave the constraints of spreadsheets behind and empower your pricing teams with Freighify (that they truly deserve), book a demo now.
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