Freight forwarding is seen as a relationship business by traditional forwarders. They coordinate various aspects of moving items from one point to another, while shipping clients outsource the worrying and details to the forwarder. The digital technologies currently disrupting the freight forwarding business consist of two main types - online freight marketplace (“Expedia of shipping”) and digital freight forwarders (“virtual forwarders”).
Online Freight Marketplaces – “Expedia of Shipping”
A freight marketplace can be described as an online site where a freight service provided by multiple third parties, with the transactions being processed by the marketplace owner. But is this really the case? Can online freight marketplaces replace forwarders? Despite the pleasing website design, it has been found that the back-end is not pleasing to work with. For instance, a single shipment of goods from East Africa to Europe can require over 200 unique interactions with 30 individuals and organizations, generating a four-inch stack of paper records. The most prominent startups in this area raised more than 100 million dollars combining Freightos, Icontainers, Xeneta and more. The freight marketplace is not able to handle additional services, which the forwarders take into consideration.
Digital Freight Forwarders
Digital forwarders or virtual forwarders have taken advantage of automated quoting processes by providing automated quotations on demand, adding accuracy through the process of tracking and tracing shipments online, and making operation processes transparent. It also guarantees integrated technology to reduce process costs and provide professional forwarding teams with local connections to assist in exceptional cases. Shipping documents and invoices are also produced on demand.
In this way, customers’ time, which is a crucial factor for all companies in the supply chain business, is saved. Every freight business must analyze every one of its business processes from the standpoint of “customer time investment”, without which, the business would fail when facing the digital age customers. The companies that are prone to succeed in the future are those that make active decisions to save customers’ time. Every minute you make customers wait for a service is another minute that the customer spends questioning their decision to choose your service. Having that in mind, it is necessary to transform ourselves to fit in the digital age, or we risk becoming extinct in the next 5 to 10 years.
Digital transformation can be found all around us. Everyone is being transformed. It is very easy for individuals and small groups but hard for organizations and enterprises to adapt, because digital transformation is all about speed. Every organization moves as fast as its slowest member. In other words, every member of the group runs together at a common pace.
How then can we get organizations into a transformative state and become a Digital Freight Business? This can only be achieved by identifying fast movers within the organization. Teams would be built around the fast movers and provided with the right tools to succeed. In no time, the organization would have scaled through the transformational state.
Strong alliances can be created by networking and sharing data with your freight partners online (Agents, customers, suppliers, carriers, etc.), which in turn creates a stronger bond and connection to compete as a group. You can invest in building your own group’s applications or use an existing one through which data can be shared with your customers using a portal and send notifications that are received automatically (shipment tracking). Speed and accuracy can then be developed to support the digital process. Selling rates can be shared with customers, which saves time quoting rate requests and offers on-demand rates and tariffs to your clients. External technologies like accounting, custom systems, carriers for online bookings, shipment instructions, terminals, warehouses and customers supply chain ERP, can be integrated to boost overall productivity.
Article by Fast CEO Adam Yaron, First published in TIACA ( The International Air Cargo Association) 4.2018