Building vs. Buying a Freight Automation Solution: What to Know

For Freight Forwarders, 2024 has meant trade disruption, market fluctuations, and geopolitical tensions - exceeding the volatility of 2023. Proactively implementing agile systems and streamlined processes has become crucial to managing this growing complexity.

But what lies ahead for forwarders still relying on manually processed data? Missed RFQs, frustrated customers, margin erosion and, worst of all, inevitable competitive decline. In this survey from Accenture, 76% of high-level executives from leading Freight & Logistics (F&L) companies believe that delaying digitalization threatens their business. Accenture also concludes that a first-mover advantage can be gained by acting now, resulting in an irretrievable and sustainable competitive lead.?

That’s down to AI and data automation. It’s transforming freight forwarding by enabling faster, smarter and more accurate decision-making by replicating human judgment and reducing human error at scale. The question is, do you build your own customized data automation platform? Or do you buy a tailored solution from a vendor? We analyze the trade-offs and outline six essential features to look for in a freight automation solution.

Building a custom automation platform? Pros and cons

The pros of building your own software

In-house development allows total control over every platform aspect. It’s the only reason to custom-build anything. That means total command from the user interface to the backend data architecture. You have total oversight over developing niche capabilities catering to your unique freight processes. And total management over the integration across existing systems, ensuring seamless data sharing and workflows between platforms. If your needs change, you can update the software rather than relying on your vendor's architecture.?

The cons of building your own software

It’s no surprise to know that in-house development is expensive. Between licensing developer tools, paying salaries, provisioning servers, and acquiring more infrastructure – costs add up quickly. These costs keep increasing until rollout, which can take months or years since tens of thousands of coding hours are needed.

Plus, even large companies struggle to master the complex integrations, data architectures, predictive algorithms and intelligent interfaces that supply chain software needs to manage. Your top IT people will have their hands full building the platform and likely need to hire external experts and teams to test for errors and glitches. Even after it's built, they’ll constantly need to test the platform to avoid bugs or breakdowns that can cripple operations.

For medium and small organizations, the turnkey route is prohibitively expensive, which is why many go down the pre-built journey of digitalization.?

Buying a pre-built automation platform? Pros and cons

The pros of buying and leveraging a pre-built solution

Purchasing an off-the-shelf freight management platform from an established software vendor provides immense advantages. Let’s start with how you can roll out a platform in weeks or, at most, a few months, minimizing downtime, accelerating time-to-value, and getting an irretrievable head start over competitors.??

Most pre-built solutions are cloud-based, enhancing remote work capabilities and collaboration as stakeholders can easily access it anywhere, on any device, within a highly secure environment. In addition, in-house IT teams are relieved of maintenance pressures as enhanced capabilities, new features, integrations, and security patches are added automatically by vendors.

Reputable vendors also provide specialist support and project acceleration services to help you adopt and use the software to solve specific needs. Their industry knowledge and continuous support are often less expensive than maintaining your own architecture. However, no freight automation solution is perfect. So, what are the cons of an off-the-shelf solution?

The cons of buying a pre-built solution

Though off-the-shelf freight management platforms offer many advantages, the potential drawbacks should also inform any decision process.

Firstly, pre-built solutions may only partially align with a particular organization's unique needs and workflows, leading to inefficiencies or compromises in functionality. While vendors do enable some customization, customization is generally narrower than in-house-built systems.

Next, any cloud-based solutions should raise questions about data access, IP protection, and long-term ownership. Trustworthy vendors can ease your concerns during your platform evaluations.

Lastly, connecting across existing ERP, TMS, and other back-end systems is generally easier (yet costlier) with in-house developed software, as some pre-built tools can cause integration issues.

Six must-have features of any freight and logistics management platform

Irrespective of whether you decide to build or buy your freight automation solution, the right software capabilities are essential to seize opportunities and establish competitive advantages to sustain your organization long-term.?

But what are those must-have features?

1. Data extraction and processing

Artificial intelligence (AI) processes, analyzes, and extracts insights from vast amounts of unstructured data, taming the chaos and extracting information to increase the revenue of freight companies by 20%. This feature ensures inbound and outbound information is captured with zero errors, regardless of the data source or format, be they emails, RFQs, or import/export certificates.?

2. Data enrichment and validation

This feature utilizes generative AI’s data enrichment and validation capabilities to enhance data accuracy further. By cleansing, correcting, completing and structuring information, it ensures the data used to produce documents is optimized for speed and precision. This gives supply chain partners a steady stream of valid, high-quality digital paperwork. The result? Frictionless partnerships.

3. Centralized data hub

By synthesizing siloed and unstructured data from across freight systems and sources, data automation platforms create a single source of truth and end-to-end visibility. With this integrated overview, managing logistical complexities becomes more efficient. Strategic planning is also improved through real-time access to a reliable centralized data hub, enabling better forecasting, decision-making, and proactive issue resolution with help from AI-driven insights.

4. Automated generation and analysis of freight and supply chain documents

By leveraging generative AI, the platform can create, manage, and analyze essential documents, significantly reducing manual labor and minimizing errors. This automation ensures that logistics operations are more efficient and compliant with regulatory requirements.

5. AI-driven knowledge graphs and ontologies

This must-have feature allows the system to organize and understand complex data related to shipments, carriers, supply chain routes and networks, and warehousing and logistics operations. The system can uncover insights such as optimal routes, efficient carrier selection, and potential bottlenecks by mapping out connections between these elements.

6. Data-driven recommendations and insights

Advanced AI, powered by large language models, scrutinizes your supply chain data to spot patterns and improvement areas. It explores optimization opportunities unique to your business by analyzing millions of data points. Using historical data, market trends, and business constraints, it provides tailored, actionable recommendations to enhance your operations.

Stargo’s AI helps freight forwarders see results in only 12 weeks

For freight companies rushing to adopt automation before the window of opportunity closes, pre-built automation platforms provide rapid deployment, affordability, and scalability benefits without prohibitive development costs. However, not all pre-built platforms are built equal.?

Stargo's advanced generative AI-powered platform transforms efficiency within port operations and freight, logistics, and supply chain ecosystems by drastically reducing tasks that took days to mere seconds. This allows freight forwarders to quickly become early adopters, gaining a competitive edge within 12 weeks. Book your demo today.