The Importance of Data in Logistics


“What gets measured gets done.”

Summary: In the complex world of freight forwarding, tracking your success is paramount. Data enables companies to stay competitive and make the most of each cargo container.

In the past few decades, multiple companies and industries have proven the importance of data collection and analytics gathering. Because of it, Fortune 500 companies and Forbes future companies have elevated to the highest standards of customer service and operational margin.

Why has logistics taken so long to understand the importance of data in their industry? Part of it, we think, is a too-narrow focus on the future and not enough of a focus on past performance.

In a multi-trillion-dollar industry with thousands of shipments completed on a daily basis, how is it possible that more effort hasn’t gone into collecting and analyzing these past patterns?

…some companies still operate in the Dark Ages

From preventing unexpected costs, tracking shipments, preventing variable issues, optimizing operations, time-savings and more, the collection of data is one of the best tools any logistics company can use to become better in almost any way.

Extra work for the Final Mile

Traditional freight forwarders and cargo companies tend to stack and archive their shipments, without giving them any importance once the shipment has been completed. This is valuable historical data that isn’t being used! The perception that gathering and analyzing this data requires extra-work is incorrect. Today’s technology allows forwarders to do so seamlessly, providing both short-term and long-term benefits.

In logistics, we have trained our minds to always think about the next shipment. We never look backward. There’s valuable info in past historical data.
— Julian Alvarez, CEO at Logixboard

Actionable Insights

Data analysis experts proved that by analyzing the past companies can (better) predict future costs. We need to start asking ourselves questions like:

  • “When is it better to buy spaces on a plane?”

  • “Is there a certain hour, airline, or season at which we should place our order?”

Besides lowering costs, companies can operate with better organizational efficiency when asking these questions and tinkering with these metrics.

Take this example.

In the same way companies like Uber or Lyft can show their customers what the cost of a certain service will be before it has been placed (with variables like traffic, weather and time) freight forwarders can do the same at a larger scale. Whether its sea freight, air freight or land freight, a shipment from Miami to New York will be more or less the same on each type of freight. A flight takes 2:45 hours, no matter the month, the hours or the number of passengers; until a plane maker releases a flight that can reduce significantly that time, freight forwarders can rely on that info to optimize their work resulting in a more pleased customer.

This is one of the many advantages that data analysis can bring to logistics, advantages that have been wasted by most freight forwarders and that only recently, due to the unstoppable and undeniable technology transformation, companies are starting to take a look to this tool.

Three ways Data Adds Value to Logistics

Today, we will explore three potential value-adding solutions:

  1. Route Optimization: With data analysis, freight forwarders can predict the best route option for their customers in a matter of seconds, considering variables like shipment time, additional charges (such as airport fees and seaport fees). This will not only help the end customer by presenting the best option for their needs but the freight forwarder will optimize their time and stop wasting it on simple tasks such as looking multiple options, manually, one by one, without success. A process that used to take days can now take seconds.

  2. Carrier Optimization: Similar to Route Optimization, freight forwarders can use their own data to get to the best carrier option, no matter if it is by sea, air, road or rail in just a moment.

  3. Transit Time Prediction: How many times have you heard the phrase “Sorry for the inconvenience but your shipment has been delayed” at a time where reacting quickly is no longer a possibility? Well with data recollection this issue can be prevented. Looking into past shipments and considering variables like weather, customs delays and more, freight forwarders can predict the day every shipment will be finished and therefore avoid making those very uncomfortable phone calls and damaging their own reputation due to an independent issue. Stop reducing your accuracy rate and start raising your delivery acceptance numbers!

Final Remarks

For this and many other reasons, data is crucial for any industry, no matter where you see it. Well implemented data collection and analysis will help any company in every way because in business, as in life, “When we forget our past, we are doomed to make the same mistakes over and over again.”

Implement the strategies used by world-class freight forwarders. Stop wasting time with calls, non-responded emails, and other wasteful communication methods. Contact us today for a consultation: