What is Freight Management Software and How Does it Work?

Freight Management software

Freight management is the procedure of strategically and efficiently moving freight across different networks from its point of origin to its expected location using different modes of transportation, technologies, and intermediaries. 

An increase in global trade, growing transportation challenges, and rising logistics expenses only reinforce the necessity for efficient freight management software.

This post will discuss the fundamentals of freight management and how it brings added business value through its implementation.

What is freight management?

Freight management is the service offered by freight forwarders or third-party logistics firms. It offers route design, load-carrier matching, and transportation process optimization.

Cargo management can be difficult, whether your company is big or small. Even if you understand the precise hurdles in your way, it may be daunting to put the overall picture together. Additionally, freight shipping includes complex processes. You must pay close attention to the little things and maintain a constant state of focus in order to handle them all effectively.

Attempting to manage all of this on your own won’t end well for your company’s productivity. More businesses now realise the intricacies and significance of transportation and logistics management software and decide to outsource it to the freight management system. In addition to giving you peace of mind, handing off such a sizable portion of your business can significantly reduce your expenses and increase the effectiveness of your operations.

Aspects involved in Freight management 

Logistics is multifaceted and complex, so freight management should also consider several varieties of factors. Here are some factors to consider when streamlining your flow of cargo:

Route optimization

Creating more efficient delivery routes reduces the amount of time and fuel that carriers must spend on each cargo, making them more cost-effective.

Auditing and Accounting

Freight audits monitor or review transportation-related financial documents for errors and accuracy, while freight accounting assists in ensuring that clients pay for the shipments after carriers and receipts get paid on time.

Claims management

In the unfortunate circumstance that cargo is damaged, one of the features of freight management includes managing claims between the shipper, client, and carrier.

Data collection

The information collected during freight movement can help to optimize paths and processes for future shipments.

Tariff and regulation management

Harmonic system tariff codes and other trade laws are complicated and, if not followed correctly, could cause heavy penalties. Part of cross-border freight management includes ensuring compliance with these rules.


Organized warehouses and docking processes decrease wait times and detention expenses at the dock, leading to cheaper shipping, happier carrier partners, and quicker shipments.

Carrier/vendor management

Freight management usually includes the management of several carrier partners, vendors, and suppliers. For large processing, this may include hundreds of business relationships.

How does Freight management work?

The freight management platform not only enhances supply chain operations but also facilitates seamless connections between key stakeholders: carriers, freight forwarders, shippers, and receivers. 

Typically, the system connects to ERP (enterprise resource planning) from the inside and links to carriers from the outside. Here’s how it works: 

  • When you have products that are required to be delivered, an order for pickup is generated by the system. Some requests are planned in advance, while others are on a one-time basis.
  • The system then provides a list of suitable and available carriers based on specific parameters. You can choose the carrier manually or allow the system to auto-pick the best one.
  • The shipper or forwarder can then schedule the load and pickup time and check if the carrier is available.
  • A shipper or broker obtains details regarding the distribution of the cargo, the selected carrier, and the vehicle, confirms it, and the carrier then signs the (digital) bill of lading.
  • A shipper can keep track of the freight on the route and provide the client with this information in real time.

Why Is Freight Management Important?

With the help of a freight management system, your logistics operations will be more efficient, and there will be less chance of error while performing various supply chain duties. It helps you improve your brand image through enhanced ability to meet your client’s needs and ensure high-quality clients service.

Utilizing logistics software allows for effective supply chain management because customer orders and billing processes are carried out quickly. A freight management software solution provides the path for an integrated supply chain management where each party involved with the operations can access all of the relevant information at any time from anywhere.

Freight management is a crucial business function since it helps companies move their resources. It covers every corner of an enterprise. The way you deliver your products greatly impacts your business, and when it is accurately managed, it becomes an enormous asset. This is why many organizations turn to a 3PL provider when they lack the scale to manage their transportation management. Having 3PL management software helps you with:

  • Better flexibility and technology – Your freight management has to scale with your business, and a 3PL supplier provides the flexibility to effortlessly increase capacity without requiring any additional financial investment. They also provide you with the latest technology and years of industry knowledge. 
  • Time to focus on other parts of the business – The time and resources that would have been spent on logistics and shipping can be used for other purposes, such as building relationships with clients and coming up with innovative ideas.
  • Improved customer service – All it takes is one incorrect or late shipment to do permanent damage to a client’s goodwill. Preventable errors and repeated mistakes mean clients will turn elsewhere despite advantageous pricing or superior quality.

Final thoughts

Any business that wants to grow to the expected heights must effectively implement freight management. Freight management is a complex process that includes managing and overseeing the delivery of goods which includes ensuring the cargo reaches the right condition to its destination on time and cost-effectively. 

Freight management is a critical and significant process that demands several crucial associates, technologies, and operations to come together to efficiently streamline transport services.

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