Buy vs build: Key factors to keep top of mind

While some might argue that developing a solution in-house is the ideal way to solve a specific business challenge, this approach often requires significant resources and investment, to build, implement and maintain.  

With supply chains under such extreme stress – from ongoing consumer demand to port congestion, labor shortages and COVID-related lockdowns – do you really need the added pressure of managing a complex, in-house technology project that could take years to deliver and require significant ongoing maintenance? 

Our technology is used by some of the world’s largest freight forwarders and logistics companies to help them streamline and optimize their supply chains, while driving productivity and efficiency gains throughout their operations. 

We know their customers count on them to get their shipments quickly and efficiently from A to B. Which is why they count on us to ensure they’re using some of the most advanced technology to facilitate this.  

With digitalization a priority for the industry from the board-level down, it’s likely you’ll be considering your technology options in 2022.  

So what are some of the things you should be looking out for when it comes to the benefits of buying software? From reduced complexity and cost, to unlocking organic global growth opportunities, our customers share some of their lessons learnt.

Reduce complexity and cost  

With an integrated network of 66 offices and more than 1,000 employees across 22 countries, CLASQUIN – the air and sea freight forwarding and overseas logistics specialist – had been operating from their own custom-built transport management system (TMS) for more than 30 years.  

According to Frederic Serra, CIO of CLASQUIN, the complexity and cost to maintain their legacy system drove them to consider new technology options.  

“Historically we invested in our own TMS, but we realized that we could not keep up with the evolution of the market in terms of compliance and added value. Each new layer and each new request required more time and resources, and would send us back to square one as we would have to redevelop an entire part of the system,” he said.  

Prior to adopting CargoWise, compliance was an increasing area of concern for CLASQUIN. Their legacy system made it difficult to keep up with new legislation and policy changes, and meant they were often left with data that was convoluted, difficult to interpret and hard to access efficiently. 

As a result, they were looking for a technology solution which could support their growth and help them stay compliant with changing customs requirements and regulation, such as tax compliance and national e-invoicing.  

“We wanted a system that was highly customizable, could seamlessly handle customs regulations and evolving legislation, and would boost our productivity. Because CargoWise is constantly updated to reflect changing laws and legislation, we now have peace of mind that we’re submitting the right paperwork.  

“Denied party screening is also extremely important in our industry, and we now have a tool that we know is going to make sure that we’re compliant and is going to improve and enhance our processes,” Mr Serra said.  

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Access state of the art functionality  

For DHL Global Forwarding, when it came to the decision to outsource versus building their own TMS in-house, deep integrations and extensive functionality that could stretch to meet the demands of their complex global operations were critical.  

“We realized that we don’t have to do everything ourselves, by ourselves, so we looked for the best technical solution out there,” said Tim Scharwath, CEO DHL Global Forwarding, Freight.  

“We also asked ourselves, what drives our customers and what do we need to do in the future to be better? And with that in mind, we decided to go with CargoWise as our TMS.” 

Recognizing that implementing a new TMS globally was a significant change for the business, DHL Global Forwarding chose a gradual, phased approach to the CargoWise roll-out. 

“We deployed CargoWise in a controlled, but very well-established way to make sure that our organization was able to follow the change.  

“It was really important for us to ensure that our people were informed about why we were implementing certain systems so that they could embrace our transformation,” Mr Scharwath said. 

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Unlock organic growth opportunities  

When reflecting on their decision to buy new software, Billy Tung, Chairman of the Taiwan-headquartered NVOCC, China International Freight (CIF), says their desire to expand their operations beyond their existing Asian footprint was a key driver.  

“The digital system we previously used had been sufficient to meet the demand of the existing market in Asia. However, a few years ago I realized that if we did not move towards a global system, we risked losing many international business opportunities, and wouldn’t be able to scale and expand into new markets,” Mr Tung said. 

“To achieve our ambitions, we had to select an innovative solution that could take us into the future. Consolidating our operations onto CargoWise and accelerating our digital transformation has dramatically improved our efficiency and given us an even greater competitive edge.” 

Despite the unprecedented pressure on global supply chains, including global lockdowns and port congestion, Mr Tung says CIF increased their cargo volume by 21.2 percent in 2020, when compared to 2019 figures. 

“With the support of CargoWise and by utilizing its powerful functionality, our team grew stronger and was capable of handling the surge in volume – it was a perfect complement.” 

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Successfully navigate inorganic growth    

Headquartered in Switzerland and spanning more than 115 offices across 40+ countries, the Fracht Group (Fracht) is an international freight forwarder and industry leader in providing general and specialized logistics solutions. 

For Reiner Wiederkehr, CEO of Fracht USA, inorganic growth over the last five years meant they had outgrown their existing operating system and needed to make a change in their approach to technology to better serve their customers and remain competitive in the market.  

“A number of mergers and acquisitions left the business with multiple patchwork systems that weren’t operating well together, and ultimately slowing down operations. We have first-class employees moving shipments day in and day out, but there was only so much they could do on the old system,” he said.  

According to Mr Wiederkehr, as Fracht is a global company, they needed a global system with global support.  

“We took our time, and we vetted a number of systems, before the entire management team eventually made the decision to go with CargoWise, simply because it’s the best product on the market,” explained Mr Wiederkehr. 

Realizing they needed an up-to-date system if they were going to remain competitive, Fracht France similarly followed in the footsteps of their international counterparts and implemented CargoWise in early 2021.  

“We had discussions with our colleagues in Australia and the US who were already using the system, and we realized that the ability to work from a single global database would be a huge advantage for our business and for our customers,” said Lionel Tristan, Managing Director, Fracht France. 

“After just the first three months, the reporting and the KPI’s that we get from the software is providing us with accurate data that is enabling us to make more agile, customer-focused decisions. 

"We also have the ability to easily share this data between each country, which was previously a much more complicated process,” he concluded.  

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