What is Return on Investment?
Determining return on investment (ROI) is a simple and versatile metric that measures the profitability of an investment relative to its cost.ROI is calculated as follows:
(Net Return on Investment / Cost of Investment) * 100
* Net return on investment = Current value of investment – Cost of investment
Importance of ROI for Freight Forwarders
For freight forwarders or maritime logistics companies, return on investment reflects the extent that you streamline workflow and optimize transportation management processes. So what is an investment that can significantly increase your current ROI? One investment could be updating the transportation management system (TMS) you use daily. Using modernized software that is user-friendly could make automating tasks a breeze. According to Inbound Logistics, companies who use up-to-date systems saw increases of 10% in their ROI compared to their outdated software, with some claiming as high as 20%.
Evaluating The ROI of Freight Forwarding Software
So how do you evaluate a software’s impact on your ROI? One way is quantifying the increase in productivity and the reduction of labor costs. Here are time-saving features from software that could increase your freight forwarding ROI:
- Automated quotes and bookings: Automatically sending the details of freight to various carriers. It makes communication between you and your clients seamless and allows your employees to focus on what matters most: increasing customer satisfaction.
- Real-time container tracking: Know when your freight arrives precisely helps save time and human capital.
- Compatibility with third-party systems: With API and EDI connectivity, the information on third-party systems can be integrated seamlessly into your daily software. This feature will reduce data integration errors which could cost thousands or even millions of dollars while saving you time to focus on growing your business.
By quantifying time and labor saved, you can realize the actual value of your investment and calculate the ROI the system brings to you.
If you are a freight forwarding company that wants to maximize ROI and increase revenue for your business, analyze the strengths and weaknesses of your existing software solution, the company’s size, the type of transportation, and the services provided. Filter systems that only serve specific types of transportation, and look for a system with functionality that corresponds to your business requirements. In addition, other factors to consider are ease of use, scalability, security, and analytical capabilities.
Here is a post that provides more details about what to look for when searching for freight forwarding software.
The Best Way to Maximize ROI is by Updating Your Freight Forwarding Software
Are you curious about what is holding you back from achieving maximum ROI? Outdated Freight Management Software hampers businesses from the benefits of unrealized gains and savings. Modern freight forwarding systems should be user-friendly and constantly evolving to meet your needs.
Gofreight provides a customizable interface and an ever-expanding ecosystem of solutions tailored to your needs. For example, our system offers end-to-end accounting and editing features for all your invoices. We also provide a manager’s view with all the metrics and real-time visualizations to help you make strategic changes.
Take a look and estimate whether your systems cover all these features perfectly to decide if you need to upgrade to a new system.
Book a personalized demo with GoFreight; we provide the best software solution that maximizes your ROI!
