Reksoft - Software Engineering & IT Outsourcing

Building the first Russian marketplace for international freight forwarding

Building the first Russian marketplace for international freight forwarding

Client

Agorafreight is a "digital" freight forwarder representing a new type of companies operating on the global freight forwarding market. It was one of the first platforms in the world to launch the service for the online price calculation (including door-to-door rates) and ordering the shipping of cargoes (comprising containerized and assorted) by all modes of transport.

Challenges

The mission of a freight-forwarding company is to organize complex multimodal freight transportation through building a multi-component logistics chain. Multimodal freight transportation means planning the route of shipping the cargo by a few means of transport and includes the customs clearance and freight insurance. A freight forwarding company has to also calculate the price of such multimodal transportation in order to offer the time- and price-optimal freight shipping option or options to the client. 

So far, the work of a freight forwarder has been organized as follows: after receiving a client’s request for shipping freight from point A (the consignor’s address) to point B (the consignee’s address), he was sending e-mails with a request for price quotation to all carriers he knows in the respective destinations. Having collected their quotes, he chose the best price, built in his fee and got back to the client with a commercial proposal outlining the entire transportation chain. 

Dealing with clients’ requests this way, logistics departments of freight forwarding companies had to spend up to 70% of the working time on the preparation of commercial proposals also because the spread of rates quoted by different shipping companies could reach 30%, with air and sea freight rates changing daily. This is confirmed by an independent study conducted by Drewry Shipping Consultants (the leading independent research and consulting agency in the maritime industry) which found that forwarding companies of the world spend annually $500 million on receiving and processing sea freight rates. And here we are only talking about the maritime transport component of a multimodal logistics chain.

Therefore, the purpose of this startup was to essentially create a marketplace for international and domestic freight shipping which would facilitate and automatize the process of planning  the routes for shipping a cargo by a few means of transport, calculating the cost of a such a multimodal freight transportation and identifying the minimum time or price option to be offered to a client.

Solution

When choosing the best approach to the project, the following specifics of the customer’s business had to be taken into consideration:

During the planning of a shipping route, all modes of transport may be used in any combination: air, sea, road, rail, including containerized freight and assorted lading, for both domestic and international transportation.
In the logistics services market, there are no general rules or standards of submitting price quotes: every carrier specifies its freight rates in its own format with the unique conditions and limitations.

In the majority of cases, this is done using an Excel worksheet. On the one hand, all the files are very similar but, on the other hand, they have different sets of columns and tabs as well as dozens of conditions and limitations in the fine print at the bottom of a page. Even those having an API (they are very few) use totally different formats. 
Geographic names and especially conditionally defined regions that not always correspond to geographic objects represented another difficulty. For example, the Moscow region often includes Moscow though it is a separate geographic area. Therefore, all this variety of rates and geographic names had to be reduced to a uniform format for further description and usage.  
To meet the customer’s requirements, the Reksoft company has developed a system for the price calculation of freight transportation services provided by freight forwarding companies and carriers. In fact, the solution represents an aggregator of transportation services for international freight shipping.

Result

The Russian startup Agorafreight has become the "single window" for working with thousands of the best shippers and freight brokers all over the world. Under a single contract irrespective of the geography and the modes of transport to be used. Logisticians and freight forwarders do not have to spend any more time on sending price quotation requests to a number of companies in order to find the best option. They only need to input the freight parameters and the system will automatically identify potential routes and estimate the time and cost for various freight shipping options. Also, Agorafreight assumes full responsibility for the cargo. 

The online quoting is already in place for transportation between China, South Korea, Vietnam, EU countries and the Russian Federation, with other countries to be added soon. In all the countries where Agorafreight operates, after submiting a request, the client will be promptly contacted (within 15 minutes during business hours) by the personal manager who will assist in any matters related to cargo transportation, including assorted lading and line-haul trucking within the territory of the Russian Federation. 

The agorafreight.com marketplace represents a connecting link between the customer (client) ordering cargo transportation and shipping companies. The functionality of the platform allows preselecting a route, companies, and services as well as estimating the cost of transportation.It has not only faciliated and made more efficient the work of freight forwarding companies but has also contributed to dinamising and smooth operation of the promising freight transportation market.


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