The international digital freight forwarding market is expected to grow from $2920 million in 2020 to $22920 million in 2027 at a CAGR of more than 23%. Automation of manual processes has become of the major drivers leading to the growth of companies across all sectors. Moreover, the expansion of e-commerce and the increase in free trade agreements are also promoting the growth and expansion of the digital freight forwarding market. In today’s blog, we will briefly discuss the growth of the digital freight forwarding sector, its scope, and the trends of the digital freight forwarding market in 2022.
Explaining digital freight forwarding
Digital freight forwarding enables the players in this sector to leverage technology trends for facilitating seamless communication among all the stakeholders of a shipping project. Additionally, digital freight forwarding entails the use of a completely transparent cloud-based system that allows for easy comparison of several shipping rates to provide the best deal to the customers. One of the main objectives of digital freight forwarding is to reduce paperwork and manual processes. This can be achieved by generating, sharing, and uploading all sorts of documents on an online platform. The intention is to provide easy access to all the stakeholders.
For example, Conqueror’s FreightViewer is an instant quote generation platform that allows the members to compare rates between different carriers, and obtain the most accurate quotation. Furthermore, apart from speeding up the quoting time, it also creates an enormous open showcase 24/7 for their clients. A tool such as FreightViewer increases transparency in prices improves customer services, eliminates human errors, and most importantly saves a lot of valuable time.
Factors leading to the expansion of the digital freight forwarding market
International expansion of the e-commerce sector
Since the pandemic, we can see a steep rise in online shopping trends all over the world. The e-commerce sector uses logistics services for the management and monitoring of the supply chain of e-commerce companies. Relegating the task of distribution to 3PLs allows the online sellers to focus on other aspects like marketing and customer care. E-commerce has become the popular purchase medium because of easy accessibility, good services, convenient experience, and huge discounts.
The supply chain of e-commerce parcels involves several cities and even countries and the demand for experienced logistics service providers is very high. However, e-commerce shipments necessitate the adoption of online freight forwarding services. This sector is also thriving in developing markets such as India, Indonesia, and China. Digital freight forwarding is offering advantages like instant quotations, transparent pricing, cargo tracking, and web-based documentation.
Poor transportation infrastructure and rising shipment costs
The supply chain of e-commerce parcels involves a number of cities and even countries and the demand for experienced logistics service providers is very high. However, e-commerce shipments necessitate the adoption of online freight forwarding services. Some of these services include quicker quoting process, track and trace of shipments, and cost-effective operations. Simply put, the rise of the e-commerce sector has fueled the expansion of the international online freight forwarding market.
Rise in D2C e-commerce
D2C e-commerce can be defined as a kind of online selling where the producer directly sells the commodities to the customers via a website. The digital freight forwarding services ensure that these goods reach the customers’ doorsteps ASAP. It also ensures to provide a good customer experience. This is made possible by the digitization of the majority of the freight forwarding operations. Furthermore, the transport management system or TMS also helps to digitize several operations of the business owners and the end customers. For instance, cargo tracking technologies monitor the shipment in real-time sending precise data about the location and status of the cargo to all the stakeholders. These benefits of digitization for D2C e-commerce will further boost the rise of the international digital freight forwarding market in the next 5 years.
The rise in trade deals and free trade agreements
The increasing number of FTAs and trade deals are yet another factor prompting the growth of digital freight forwarding. During the pandemic authorities all around the globe finally realized the importance of freight forwarding services and came to recognize this industry as an essential service provider. Moreover, the FTAs (Free Trade Agreement) between nations are reinvigorating trading activities that are allowing the logistics ecosystem to thrive. For instance, the USA presently counts on 14 FTAs with 20 nations. India has 43, Singapore has 44, China has 47, and so on. Simply stated, the new wave of post-pandemic international commerce is driving the expansion of the online freight forwarding market.
Major market trends of online freight forwarding
A highly competitive market scenario
The market of digital freight forwarders is a highly fragmented one with players of all sizes and capacities. On the one hand, we have all the big players who are investing thousands of dollars in creating streamlined online operations. On the other hand, we have independent freight forwarders like you, who are also adopting new technologies to speed up their back-office work.
Rise in the number of digital freight forwarding service providers
Currently, more and more logistics companies have started offering digitized services. As early as 2008, Maersk launched their online freight booking platform- Maersk Spot Booking. Moreover, Maersk’s Twill is yet another example of digital freight forwarding that enables online booking, tracking, and management of shipments. Freightos launched Webcargo over 12 years back for promoting the digitization of the air freight shipping sector. The San Francisco based digital freight forwarder Flexport is yet another leading company in this sector. With a valuation of over $1 billion, this company comes with a run-rate revenue of around $400 million. Meanwhile, old players like the Mediterranean Shipping Company also launched an online quote generation platform called ‘Instant Quote’ that allows their customers to get quotations easily and quickly.
Three years ago, Conqueror also joined the digital race with the creation of FreightViewer. Unlike the rest, Conqueror offers this TMS to all members for free, meaning that the huge investment was made was made by the network. Additionally, it is a network with over 260 members in 135 countries around the world. This implies that FreightViewer allows members to have rates from almost every corner of the world.
How FreightViewer simplifies the process of digitization for independent freight forwarders
Conqueror’s member-exclusive TMS FreightViewer is helping members to digitize a very significant aspect of their daily work- viz. quote generation. Additionally, as the largest exclusive freight network on the globe, we are the first network to have launched the digital quoting ability for the members. FreightViewer is allowing over 260 network agents across 136 to upload their rates, interchange data and create an accurate quotation within less than a minute. Most importantly, network members can use this platform free of charge and even share the quotes with partners who are not members of the network.
One of the prerequisites of digitization is substantial investments on software and training of the employees. However, not everyone in this industry always has the resources to implement this change. Conqueror is allowing the members to take the first step towards digitization without any investments. Additionally, Conqueror is constantly upgrading the utilities of this TMS by partnering with industry leaders. Their partnership with Shipco Consolidator is providing members direct access to LCL rates from hundreds of carriers through FreightViewer.
To quote Conqueror’s CEO and Founder Antonio Torres, “Back in 2018, we understood the fact that many forwarders were stuck with outdated customer interfaces, and age old manual processes. They were running the risk of becoming overburdened with inefficient asset utilization, and declining response time that ultimately eroded their customer base. This motivated us to find a way to allow members to take the first digital step.”