Using technology to disrupt the Freight Forwarding Industry

A “Freight Forwarder” may be defined as a multi-function agent/operator who undertakes to handle the movement of goods from point to point on behalf of the cargo owner. However, that is about as complete a definition as saying a chair is a four-legged piece of furniture for sitting upon.

Freight Forwarders play a critical role in moving goods, but their knowledge is based on much more than mere transport, although that can span sea, road, rail, and air which can be a heady combination. Freight Forwarders are also experts in local customs compliance, port/terminal regulations, geographical issues, warehousing, packaging, and people knowledge. However, much of this experience is still handled in an old fashioned way through the use of faxes, couriers, telephone and paper – especially the bills of lading.

An Imminent Transformation

Technology is disrupting many traditional businesses across the world and freight forwarding is no exception. Consider the impact of UBER on traditional taxi services, something similar is coming down the line to Freight Forwarding and the industry has to be ready.

The Internet of Things (IoT) has already disrupted the passage of goods themselves – and for the better. Sensors can track goods ensuring temperatures are controlled, that weight is monitored to reduce theft or loss and provenance can be tracked.

60 years ago, containerization radically shifted the industry and created a new standard for the shipment of goods. Today, modern drones can replace the humble tugboat for dropping goods out at sea. Even Amazon is trialing its Airborne Fulfilment Centre which is in effect a floating warehouse equipped with drones to drop off products. We are even talking about autonomous ships – like the self-driving cars – only considerably larger.

Online Bookings for Freight Forwarding

Another tell-tale sign that is foretelling the shift towards digitization is the surge in online freight bookings. Mainstream players such as Hapaq Lloyd are witnessing a 6% rise in online bookings with their Quick Quote product and DSV, through its My DSV software, claims a bookings increase of 15%.

An influx of software startups in the area is certainly shaking up the traditional Freight Forwarding sector, but again, software alone is not the answer and is not currently displacing experience.

Shippers are also responsible for generating interest in digital disruptions. They want greater transparency, accuracy, and speed. To confirm this, a joint report by McKinsey and Google, highlight the new searches for ‘ocean carriers’ and ‘freight forwarders’ increased by 8% and 14% respectively, and 23% of those searches are carried out on mobile devices.

Technology will disrupt Freight Forwarding, but remember the days when Travel Agents were replaced by online booking engines? Only they weren’t. Many agents upskilled to serve the luxury or adventure market and other organisations converted into online portals. Again, the customer dictates to a degree what level of digitisation they are comfortable with. And with breakpoints across the system, with only 60% of forwarders online, this is not going to happen immediately.

As Consol Freight CEO Ernesto Vila suggests: “We are at the true cross point between traditional freight forwarding and digitization. We can combine our experience with new, faster technologies. We like to see ourselves as enablers – not disrupters – with everyone winning.”

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