Freight forwarder and customer complexity in movement of cargo

What does a freight forwarder do? 

A freight forwarder organizes shipping for domestic and international trade. They arrange the logistics for how goods will be moved and stored during transit and work closely with the importers and exporters to make sure all customs clearance and other documentation is in place. While a freight forwarder doesn’t physically move the goods, they’re an efficient and cost-effective way to get products to market, especially for those exporting large volumes. Freight forwarders act as an intermediary between businesses and shipping companies and can use their network of trusted freight services to get good deals on freight charges.

Freight forwarder and customer complexity in movement of cargo

Freight forwarding companies are experts in the transportation of goods so individual businesses don’t have to be. They save importers and exporters the hours it would take to organize all the necessary documents, fees and insurance themselves. Companies can also benefit from freight forwarders’ specialist knowledge of different countries’ rules and regulations on imports and exports.

The complexity of providing timely and cost-effective distribution of finished goods from industrial facilities to customers makes effective operational coordination difficult, yet effectiveness is crucial for maintaining customer service levels and sustaining a business. Logistics planning becomes increasingly complex with growing numbers of customers, varied geographical locations, the uncertainty of future orders, and sometimes extreme competitive pressure to reduce inventory costs. Linear optimization methods become cumbersome or intractable due to the large number of variables and nonlinear dependencies involved. In order to characterize the complexity in customer behaviour, define a “customer space” in which individual customer behaviour is described by only the two most relevant dimensions: the distance to production facilities over current transportation routes and the customer’s demand frequency. These dimensions provide essential insight into the domain of effective strategies for customers. Then identify the optimal delivery strategy for each customer by constructing a detailed model of costs of transportation and temporary storage in a set of specified external warehouses

Logistics is widely recognized as the most complex among business processes. The challenge of coordinating with multiple suppliers for raw materials and partially finished
goods, and the challenge of delivering next-stage finished goods to customers, all in the correct amounts in a timely fashion and in coordination with production processes, despite uncertainty due to independent decision-making of customers, is daunting. These coordination processes are particularly challenging because of the need to optimize costs and maximize customer satisfaction. It is particularly difficult to keep transportation networks optimized when operations span thousands of miles and serve thousands of customers.

Logistics is known to be a highly complex challenge that is not amenable to traditional linear optimization strategies due to its high dimensionality and rigidity in the face of limited accuracy and variation of conditions .