Freight Forwarder’s Guide: Increasing Profits with AI & Automation

You Can Save +$800,000 Annually? 

Do you think annual savings totaling approximately $840,000 would impress your boss? That’s how much freight forwarders can save per year with detention and demurrage (D&D) automation. When other artificial intelligence (AI) capabilities are added to the mix, not only will you greatly reduce revenue leakage, you’ll also reap business benefits, such as greater efficiency and better customer relationships.

Connecting exception milestones and D&D calculations to your actual contracts and rates is definitely possible…

Freight Forwarding is Fraught with Challenges

Freight forwarders like yourself still face significant challenges in achieving true visibility across the supply chain, because you are relying on carrier data, and can’t update your customers before receiving that carrier data, which adds a layer of complexity. 

Fragmented data sources and inconsistent information sharing among stakeholders is another big issue. Data is often scattered across multiple platforms and systems operated independently by carriers, customs agencies, ports, and other logistics providers. This lack of integration makes it difficult for forwarders to have a single, reliable source of truth, complicating their efforts to proactively manage shipments, anticipate delays, and communicate accurately with customers.

The reliance on traditional, manual processes further obscures real-time visibility. Forwarders frequently encounter delays in obtaining critical information, such as cargo location, container statuses, or customs clearance updates. These gaps impede efficient decision-making, leading to higher operational costs, increased risk of demurrage and detention fees, and potential damage to client relationships.

One critical issue that has significantly impacted profitability for freight forwarders is the management of detention and demurrage (D&D) charges. These fees occur when shipping containers are held longer than the allocated free time at ports, terminals, or storage facilities. 

Unfortunately, many freight forwarders find themselves losing control over these charges, primarily due to insufficient visibility into container movements and overly relying on carrier-provided data, which is often delayed or inaccurate.

Revenue leakage emerges as a direct consequence of these inefficiencies. Forwarders frequently struggle to accurately track, forecast, and invoice these charges, leading to substantial financial losses. Without automated processes, manual handling of detention and demurrage charges becomes cumbersome, error-prone, and significantly reduces operational efficiency. The complexity and frequency of billing disputes further exacerbate these issues, prolonging resolution processes and negatively impacting cash flow.

When forwarders pass D&D costs to their customers, delays in invoicing often lead to frustration. Customers typically believe the transaction has been finalized, only to receive an additional charge days or even weeks later, long after the service was rendered. This lack of timely and accurate invoicing creates confusion and undermines trust, especially when the charges weren’t clearly communicated in advance.

Without streamlined processes and real-time cost tracking, forwarders risk damaging client satisfaction and losing repeat business.

Additionally, the supply chain and logistics ecosystem has faced substantial disruptions in recent years, due to global crises, economic volatility, geopolitical tensions, and ongoing infrastructure challenges. 

This environment demands heightened resilience from freight forwarders to sustain operations and maintain profitability. You’ve had to adapt swiftly to shifting scenarios, manage increased risks effectively, and continually optimize operations to thrive in this evolving market.

Visibility is the Foundation

True visibility is the cornerstone.

Actionable ocean freight visibility empowers freight forwarders to increase efficiency, reduce costs, and improve overall performance via real-time insights from a single source of truth. This visibility makes strategic decision-making regarding your logistics and supply chain operations easier and much more effective. 

How can you know if real visibility is being offered by a vendor? Look for full voyage milestone tracking, critical event detection, and AI-generated, accurate ETAs.  

Without true visibility as the foundation, every attempted solution will just be a bandaid…

The Real Financial Impact of D&D Automation: A Mid-Case Scenario

Automation can be a transformative solution to the detention and demurrage (D&D) issue. 

To illustrate the tangible financial benefits of automation, let’s consider a typical mid-sized freight forwarding operation that manages approximately 70,000 containers annually. Industry benchmarks suggest that roughly 30% of these containers, equating to around 21,000 containers per year, are subject to detention and demurrage charges.

By adopting an effective automated D&D management solution, freight forwarders can conservatively save an average of $40 per container on detention and demurrage charges. This saving results directly from improved visibility, faster decision-making capabilities, and streamlined processes that significantly reduce manual errors and oversight.

Forwarders can boost cash flow and speed up invoicing with real-time, error-free fee calculations.

Applying these numbers, a forwarder handling 21,000 containers annually stands to realize substantial annual savings totaling approximately $840,000. These figures underline an impressive return on investment (ROI) and highlight automation as a strategic investment in future-proofing operations against inefficiencies and disruptions.

The Importance of a Gen AI Expert

Integrating Generative AI (Gen AI) expertise into freight forwarding operations is pivotal in navigating complexities and driving strategic growth. A Gen AI agent can interpret vast datasets, generate predictive analytics, and deliver actionable insights that human analysis alone might overlook. For instance, a Gen AI agent could cover workflows such as real-time exception alerts and shipment tracking summary, and detailed D&D cost breakdowns, ensuring maximum clarity to optimize every shipment.

The ability of Gen AI experts to enhance decision-making processes significantly boosts operational efficiency and resilience, enabling freight forwarders to anticipate and mitigate disruptions proactively. By leveraging advanced AI capabilities, freight forwarders can swiftly adapt to market fluctuations, better forecast operational demands, and gain a critical competitive edge.

Connect Visibility to Your Actual Rates and Contracts 

Implementing advanced Maritime AIâ„¢ solutions can dramatically increase operational control, reduce dependency on carrier-supplied information, and effectively stop revenue leakage.

Artificial intelligence solutions offer forwarders real-time tracking and predictive capabilities that significantly enhance visibility over their operations. By automatically monitoring container locations, AI-driven systems can proactively identify containers at risk of incurring detention and demurrage charges. Such proactive identification allows forwarders to take timely corrective actions to avoid unnecessary costs.

It is also possible to harness AI to streamline traditionally manual processes related to invoicing, claims management, and dispute resolution. This technological advancement reduces the administrative burden on teams, allowing them to redirect focus toward strategic operational improvement and customer service enhancement.

Implementing milestone-driven processes and automated alerts ensure that freight forwarders are promptly informed of potential issues before they escalate into costly disruptions. By clearly defining and tracking key operational milestones, forwarders can proactively manage exceptions, thereby significantly reducing operational delays and unexpected costs. Streamlined exception management practices enhance operational transparency, improve client communications, and ultimately safeguard profitability.

Agentic workflows can also be utilized for cumbersome tasks, such as invoice verification and tariff extraction. 

AI and automation empower freight forwarders with full visibility into exception management and milestones, a halt to D&D revenue leakage, Gen AI for explainability and workflow handling, and a full operational picture that is generated by connecting the milestones and D&D calculations to your actual contracts and rates!

Strategic Advantages Beyond Financial Gains

Beyond immediate financial savings, embracing AI and automation provides a myriad of strategic benefits that position freight forwarders for long-term success. Enhanced predictive analytics and comprehensive visibility empower companies to anticipate disruptions before they occur, enabling proactive rather than reactive operational management. This shift significantly bolsters overall resilience and agility, crucial qualities in the face of continuing global supply chain volatility.

Automation also allows companies to elevate their level of customer service. With accurate, real-time data at their disposal, freight forwarders can offer precise tracking information and quickly resolve issues or disputes, substantially enhancing customer relationships and competitive differentiation.

By automating routine tasks, businesses can strategically redirect their human resources towards higher-value activities such as strategic planning, innovation, and customer engagement. This reallocation fosters growth, improves employee satisfaction, and drives forwarders’ long-term sustainability and profitability.

How Windward Can Transform Your Operations

To fully leverage the benefits of AI and automation, freight forwarders should strategically evaluate and integrate solutions tailored to their specific needs. Windward’s innovative technology suite is uniquely designed for forwarders seeking tangible, measurable improvements.

Start by adopting Windward’s Ocean Freight Visibility solution, which delivers unmatched real-time insights into global container movements, significantly enhancing your visibility and control over operations. 

Next, employ Windward’s D&D Automation solution to efficiently manage detention and demurrage charges. This powerful tool automatically tracks containers, identifies at-risk shipments, and streamlines invoicing processes, directly mitigating revenue leakage and enhancing your bottom line. Want to see the difference automation can make? Try our free D&D calculator to experience how simple, accurate, and transparent D&D management can be.

MAI Expert™, Windward’s Gen AI agent, can provide predictive analytics and proactive decision-making capabilities, essential for managing operational risks and anticipating disruptions.

By taking these actionable steps, you can confidently embrace technology-driven resilience, position your organization for sustained growth, enhance profitability, and gain a strategic advantage in a highly competitive market.

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