The fundamentals of forwarding remain unchanged, but its short-term future will be characterized by the introduction of technologies that unlock value and enhance capability, according to “Global Freight Forwarding 2018,” a new report by Transport Intelligence (Ti).
The Ti report said that while the fundamentals are relatively unchanged, recent years have seen significant changes in both the structure of the freight forwarding industry and the way it offers its services to the market.
One of the most visible changes has been the introduction of digital forwarders, marketplaces, and spot market platforms.
“The entry of such players into the market has been a key driver of innovation in customer service and experience, and in the wider movement to embrace new technologies as they mature and start to create value,” said the report.
“Online marketplaces and digital forwarders are not a transformative and disruptive threat, but a viable solution for shippers with specific needs and a segment of the forwarding market in their own right, according to the largest forwarders globally,” it added.
“Large freight forwarders have realized that online rate quotation and booking platforms are a great way to win SME and ad-hoc business. Simplicity and responsiveness of service are often top of the list of priorities for such customers, which digital forwarding in theory should deliver well,” said David Buckby, economist at Transport Intelligence.
But he noted that in practice, there can be wide discrepancies in service quality across platforms. “Both large forwarders and the newer players are continuously evolving their offerings to get ahead of the competition,” he added.
Alongside the development of market-facing systems, forwarders are transforming themselves from within to unlock value and enhance capability and efficiency. Plans to implement change, to enhance customer experiences, and to drive both efficiency and quality at scale show a diversity of opinion and variation in business and operating models.
“The short-term future of forwarding will be driven by the use of technology to deliver against the need to improve operational efficiency and enhance customer-centricity. There’s no established route to success and forwarders are likely to need a suite of internal and external tools to meet all the demands they’ll face. The highest risk comes with no activity—forwarding is and will increasingly be a tech-enabled business in which standing still isn’t an option,” said Nick Bailey, head of research at Ti.
“Beyond that, the character of risk changes—not all technology will mature in the way expected and the market will shift, but using technology to gain operational and customer satisfaction advantages is key to the game forwarders are in at the moment,” he said.
Photo: Romlogistics
