The world of logistics is being revolutionized by digitization, ushering in a new era of enhanced visibility, connectivity, and flexibility. Within the freight forwarding sector, the adoption of these cutting-edge technologies has demonstrated significant potential for streamlining operations. Nevertheless, it also poses a formidable challenge, demanding a delicate equilibrium between priorities, investments, customer expectations, and capacity management. All of this must be accomplished while navigating the intricate and fragmented landscape of the industry.
Digitalization entails leveraging digital technologies to transform the business models of independent freight forwarders creating fresh revenue streams and opportunities for value addition. It entails leveraging digital technologies to transform the business model of independent freight forwarders creating fresh revenue streams and opportunities for value addition. The onset of the COVID-19 pandemic, characterized by substantial supply chain disruptions and exponential growth in e-commerce, expedited the process of digitalization within the realm of freight forwarding.
Today we’re going to discuss the need for digitization of the independent freight forwarders and how their role need to evolve in the digital context.
Digitization is a must for independent freight forwarders to stay relevant in the market
As recently as five years ago, the logistics industry was just beginning its journey towards automation. However, the COVID-19 pandemic has spurred a noticeable acceleration in the automation process. Eight out of the top ten carriers have introduced their own instant quote generation platforms. This transformation began in 2008 with the launch of Maersk Spot Booking. Today, more than half of Maersk’s spot cargo bookings occur online. Historically, carriers have tended to lead the way in digitization, leaving forwarders trailing behind. However, this dynamic has started to shift in recent years, with independent freight forwarders increasingly embracing digitization to keep up with industry changes.
A prime illustration of this shift is the emergence of digital freight forwarders like Flexport, founded in 2013. Another notable example is the Freightos portal, which provides a virtual marketplace offering access to a multitude of freight offers. Furthermore, they offer instant quotations and follow-up services through messaging. It’s important to note that companies like Freightos aren’t directly challenging independent freight forwarders; rather, their aim is to facilitate direct communication among all industry stakeholders.
In essence, the pandemic has transformed digitalization from a mere trend into a tangible reality. Platforms such as Freightos, Flexport, WebCargo, Freighthub, and iContainers are managing vast amounts of data directly aimed at clients, often utilizing third parties to provide comprehensive door-to-door services. Additionally, other industry stakeholders such as airlines and port authorities are offering transparent, customer-centric services, making previously reserved information available to end customers, and thereby reshaping the industry landscape.
Factors driving digitization in the operations of Independent freight forwarding companies
Visibility and transparency
Digitalization enables rapid data sharing among carriers, suppliers, and customers, providing transparency and visibility like never before. Access to high-quality, near-real-time data, tracking, and monitoring facilitates better communication and collaboration, making it easier to plan and execute forwarding tasks. Moreover, increased visibility helps customers identify supply chain bottlenecks and reduce avoidable costs like demurrage, detention, and storage.
Digitalization allows for on-the-fly planning and real-time responses to changes in supply, demand, or disruptions. Enhanced end-to-end visibility enables the quick identification and anticipation of issues, leading to efficient workarounds. Improved connectivity with carriers and customers enhances the independent freight forwarders ability to respond swiftly to disruptions.
Digitization of freight forwarding operations streamline the movement of goods, allowing for fast and seamless transfers. This in turn ensures that supply chain issues are promptly identified and resolved. More importantly, the automation of repetitive and time-consuming tasks reduces errors and enhances overall efficiency. As per an estimation of The Boston Consulting Group automating back-office and operational functions can lead to cost reductions of up to 40%.
Better customer experience
Good customer service in freight forwarding involves value-added services, timely deliveries, and rapid responses. Digital technologies enable customers to easily search, book, amend, and track bookings. For instance, automation can reduce the time required to prepare and issue a quote from days or weeks to nearly instantaneously.
Digitalization helps to reduce the gap between the multinationals and the small and independent freight forwarders. Simply put it enables freight forwarders of all sizes to achieve more with fewer resources. Back-office operations, that involve lots of manual labour such as quote preparation, email management, and freight tracking, can be optimized and supported by automation. Digital freight forwarders, in particular, can offer a wider range of services and expand their geographic coverage more easily.
How Conqueror’s freight management software can be your first step towards digitization
FreightViewer is an advanced freight rate management software designed to bolster the digital infrastructure of network members, propelling them forward in their digitization journey. This exclusive, member-only tool is available at no cost and offers automation of the sales process, improved visibility, and an enhanced client experience. Notably, it furnishes network members with a standardized platform for effortlessly sending or requesting quotations, sharing documents, and even exchanging freight rates with partners outside the network.
This Transport Management System empowers you to establish a digital back office. You can effortlessly upload your rates onto FreightViewer to generate instant quotes and compare rates across various carriers. Furthermore, it offers the capability to filter rates based on multiple attributes, ensuring the utmost accuracy in your quotations. Uploading quotes into the system not only expedites the quote-generation process but also creates a virtual display of your rates accessible to clients and partners, effectively providing an easily accessible webpage available 24/7.
Conqueror Freight Network‘s partnership with Shipco Consolidator, a prominent neutral NVOCC, enables the members to directly access LCL rates through FreightViewer. The immediacy offered by our freight management software empowers users to quote within seconds, not only with their own rates but also those from external providers. This significant step enables freight forwarders to present diverse options to customers in the shortest possible time.
To sum up, the ongoing transformation within the freight forwarding industry is characterized by the management of extensive data, a challenge that freight forwarders must approach with careful consideration. While digitization won’t yield immediate results, it’s crucial for freight forwarders to prepare with well-suited strategies. Breaking away from conventional practices and embracing industry changes is essential. Although dedicating time and resources may be demanding, it is imperative to ensure the long-term viability of your business.
Conqueror has taken the lead among freight forwarding networks to introduce instant quoting capabilities exclusively for its members. This unique and complimentary platform is solely accessible to our network members. Its primary objective revolves around digitizing a pivotal office task: quote generation. By doing so, it extends invaluable support to small and mid-sized logistics companies, aiding them in embracing one of the most significant industry transformations – digitization. Our freight management software serves as the initial stride in the journey toward digital transformation for logistics companies.