Freight management system is a software solution that is implemented in transport businesses to optimize the efficiency of commercial freight operations. Such software systems automate processes and help in improving company’s communication and productivity. The solution also reduces the load of data entry and helps in eliminating errors. The various features of a freight management include freight tracking system, vehicle maintenance and repairs, pallet tracking, Proof of Delivery (POD) scanning, drivers and subcontractors rating and payments, customer Electronic Data Interchange (EDI) interfacing, consignment entry, consistent auto consignment pricing and comprehensive operational reporting.
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The freight management system market can be segmented on the basis of solutions, technology, services, transport mode and geography. On the basis of solutions, the market can be segmented into logistics management system, baggage and cargo screening system, freight information system, freight operational management system and security monitoring system. On the basis of technology the market can be segmented into surveillance systems, X-rays, detectors and radiations. On the basis of services, the market can be segmented into support and maintenance services, professional services and system integration. On the basis of transport mode, the market can be segmented into seaways, roadways, railways and airways.
With the emergence of advanced modules in freight management systems, many transport companies are looking to implement freight management systems to improve their delivery capabilities. Also, there is rapid increase in the demand of on-time delivery of products and raw materials that encourages the fleet owners to implement an efficient freight management system which allows planning for the current inventory. Implementation of freight management systems also ensures warehouse efficiencies by decreasing time spent working on freight management and investing the same amount of time on warehouse duties. Therefore, there is stiff competition among the vendors to come up with innovative products that can cater to the growing demand. Another factor that is contributing to the growth of this market is rise in global trade. International trade bodies like WTO (World Trade Organization) are encouraging open door policy to promote international trade without any tax barriers. Many business establishments are taking the advantage of the trade incentives and relaxation in regulations to expand their businesses beyond national boundaries. This triggers the demand for freight management system that can update and track freight movements globally and ensure the safe and on-time delivery, thereby contributing to the growth of this market.
However, trade barriers by countries to safeguard domestic businesses, has restricted the market growth. For example, open door policy is not accepted by many countries and such countries impose heavy taxes on foreign goods to protect their local manufacturers. Therefore, to comply with the taxes, the manufacturers of foreign goods and the vendors of freight management systems increase the prices of their products making them unaffordable in the process. In addition, poor transport infrastructure in developing countries like India and China leads to traffic congestion and accidents which are unpredictable in nature. These unpredictable events affect the operational efficiency of freight management system. The other unpredictable events include cargo thefts and climatic conditions like rain and snow. These are the major factors that are adversely affecting the growth of this market.