Over the past few years, more and more freight forwarding startups have spring up, amid the growing calls for the freight forwarding industry to embrace technology. Most, if not all of these startups, have come in the form of ‘digital’ and online freight forwarders. But why is there this urgent call for digitization?

Global logistics research and consulting partner logisTIcs conducted a survey earlier this year to find out the importance of digitization in freight forwarding. While 68% of respondents say that traditional freight forwarders remain relevant in today’s environment, a whopping 92% of respondents believe that digitization will add value for freight forwarders.

This indicates a clear need to move towards digitization. But as with everything, it’s easier said than done. Let’s take a look at just how many freight forwarders are doing so, and how digitization affects workflow and processes.

Website functionality

Most traditional freight forwarders have websites, but they mainly only talk about the services they offer. These days, only the more advanced online freight forwarders feature documentation and rate functionalities on their site.

Quote requests

Certain traditional freight forwarders may have a “quote request” function. But chances are that you won’t be able to get in touch with them immediately. Sending in a quote request may only get you a quote via email, sometimes days later — if that. According to an iContainers survey, 40% of all freight forwarders take four to seven days to provide customers with a quote.

Immediate quotes

Being able to get an immediate quote is still considered a luxury in today’s freight forwarding world. Perhaps only a handful of traditional freight forwarders offer immediate quotes and that’s typically for their own LCL products. They also often come in the form of a tariff where shippers would have to check other ocean freight and surcharges separately. In short, the math is not done for them and the end charges have to be calculated by themselves.

With online freight forwarders such as iContainers, for example, a quote is provided within 15 seconds with all charges broken down and included for full transparency.

Tracking

Today, only a handful of traditional freight forwarders provide tracking tools and sailing schedules. Again, these would probably only apply to their own LCL cargo. Compared to traditional forwarders, online freight forwarders tend to have tracking tools for a wider variety of shipments.

The more advanced online forwarders should also have Track & Trace functions and automated notifications system for shippers. Not many online forwarders currently offer these tools and those that do are the ones that understand the importance of transparency. These, surely, will be or are already the ones leading the industry’s digital revolution.

Defining the digital setup

Technologically, start ups are the ones that are pushing the digital setup. You won’t see many new forwarders entering the market intent on doing business the old-fashioned way. Everyone is trying to bring something to differentiate themselves.

There are many traditional old school freight forwarders who will be very reluctant to this change, however. For some, just moving to a operating in paperless fashions is a terrifying idea. This is mostly because of how complex the nature of the industry is.

Over the years, most traditional forwarders have developed routines that help their staff keep track of what needs to happen with a shipment using paper folders and various types of notes. Copying the type of flexibility some of these set ups have into a digital system seems like it should be easy but that seems to be an ongoing hurdle.

The pacesetters

The revolution is slowly but surely picking up steam. But I reckon it will still be a long way, and by that I mean decades to go before traditional freight forwarders are phased out.

Right now, the digital companies are just starting to make their presence known. The big players in the industry have begun work on digital improvements. Their success with new platforms will largely determine how quickly others will follow suit. If they succeed, mid-sized forwarders are likely to emulate their moves. Smaller forwarders will find themselves having to team up with others, form freight associations, or depend on neutral NVOs to have a shot at competing.

The big guys are essentially the ones setting the pace. If they don’t nail it with their upgrades, the mid-sized and smaller forwarders will certainly not feel pressured into making the same investments as they won’t be too impacted.

Does traditional mean personal?

As long as the current freight generation of decision makers is still around, the market for forwarders who prefer to focus on personal connections with shippers will stay. I hope as forwarders develop systems, they achieve a method that balances personal touch and digitization.

I would love to see a system that allows this valued personal relationship to really shine through and work hand in hand with digitization in order to propel freight forwarding staff to the front line to really benefit the end customers.