The question before the conclusion.
- Lens
- freight
- Journey
- 6 decision points
- Reading
- 7 min
A case is won in twenty minutes and lost over three months.
The twenty minutes are the quotation: a customer asks for a price, someone compiles purchase rates, adds a margin and sends it. The three months are the life of the case: the booking, documents, correspondents, milestones, extra costs and invoices arriving out of order. At the end, if anyone takes the trouble to calculate it, the actual margin bears little resemblance to the quoted margin.
The most disturbing part is that no one really knows. In many freight-forwarding companies, profitability is measured globally, at month-end, in the income statement—not case by case. That amounts to knowing the business makes money without knowing where.
The five leaks, in the order in which they occur
A quotation prepared from memory. Purchase rates live in rate sheets, emails, verbal agreements and two people’s heads. When a request arrives, it is quoted using whatever is at hand—sometimes an expired rate, sometimes a rate for another corridor, and often without a surcharge that has just been published.
Forgotten disbursements. File fees, port handling, storage, detention and bank charges: they are real, charged by third parties, and appear in the case only when the third party’s invoice arrives—sometimes weeks later.
Services added along the way. An unplanned inspection, a change of mode, a delay that extends storage. The customer asks, operations acts, and by invoicing time no one remembers that the service was not included in the quotation.
Accruals that are never adjusted. An estimated cost is accrued so that the customer can be invoiced. The actual invoice then arrives with a different amount. If no one reconciles it, the difference remains in the accounts and never returns to the case.
Closure that drags on. A case that is physically complete but not administratively closed continues to carry floating costs. The later the closure, the less fresh the memory and the harder discrepancies become to explain.
Why this is structural, not a question of diligence
There is a tendency to treat this as a discipline problem: ‘we should track better’. That misses the nature of the business.
A freight forwarder coordinates parties it does not control—shipping lines, agents, carriers, authorities and warehouses. Each has its own pace of information, format and invoicing delay. The case progresses in the real world much faster than information circulates.
In other words, the gap between execution and knowledge of it is inherent in the business. The objective is not to eliminate the gap, but to reduce it enough for decisions to be made in time.
What changes everything: attaching every cost to the case as soon as it arises
This is the only principle that really matters, and it is simple to state: every cost item must find its case when it appears, not when its invoice arrives.
In practical terms, this means:
a booking creates an estimated cost line immediately;
a disbursement announced by a correspondent is recorded on the day it is announced;
an additional service requested by the customer creates a line, even if the amount is not yet known;
when the third party’s invoice arrives, it reconciles with an existing line—it does not create the line.
The difference is considerable. In the first case, the projected cost is known at all times and the variance from the actual cost becomes usable information. In the second, the case discovers its cost at the end and all anyone can do is acknowledge it.
The issue everyone avoids: currencies
An international case often carries several currencies: a freight purchase in a foreign currency, local disbursements in dirhams and a sale in a third currency.
Many organisations handle this by converting everything at an average monthly rate, which is sufficient for accounting but insufficient for margin. A case’s margin depends on the rate when each commitment was made—not an average.
We do not claim that software resolves this issue: it depends on your business rules, hedging policy and financial decisions that are not ours to make. What it can do is retain the original currency and date of each commitment so the calculation remains possible. Many systems convert immediately and lose the information—after which no detailed analysis is possible.
What changed our minds
We used to think a freight forwarder’s first workstream was quotation: structuring purchase-rate sheets, industrialising quotes and improving commercial responsiveness.
We now prefer to begin with closure. The reason is pragmatic: quotations improve only when the actual costs of past cases are known. Structuring rate sheets without knowing what cases really cost amounts to fixing theoretical purchase rates—and reproducing the same errors faster.
Start by learning what your cases cost. Quotations will improve naturally, using data rather than intuition.
Three indicators, and only one that is genuinely structural
Closure time—the period between the end of the physical operation and administrative closure of the case. This is the leading indicator: it determines the reliability of all the others. A case closed within a week provides an actionable margin; a case closed after two months provides an archival figure.
The share of cases whose margin can be calculated—in other words, those for which all costs are attached and reconciled. In many organisations this figure is low at the start. Watching it rise is the best sign of progress.
A note about interfaces
We are regularly asked to ‘connect the shipping lines’ portals’ so statuses can be retrieved automatically.
We always give the same answer, and it is rarely what people hope to hear: it depends entirely on what those third-party systems make accessible and what your commercial agreements allow. Some interfaces exist and work well. Others do not exist, or require volumes you do not yet have.
Feasibility is checked partner by partner during scoping. A vendor promising ‘connection to all shipping lines’ without examining your partners is selling an intention.
In the meantime, there is much to gain from what you control: case structure, cost allocation and closure discipline. These are internal workstreams, and they produce most of the result.
