Digital technologies will reinforce forwarders

Freight forwarding will naturally persist since an intermediary function is expected, alongside the continued deployment of the industry’s platform potential. Incumbent operators who succeed in digitalizing their business become digital forwarders.

Digital forwarders encourage shippers to entrust them with their goods by offering guaranteed capacity, relative price stability, liability and invoice consolidation. They can offer customized solutions to large shippers and complex traffic flows with key activities managed by their Operations while activities such as marketing, capacity management, routing, pricing, billing, payment and tracking shall become digitalized. This allows small shippers with sporadic, simple shipments and without complicated customs management to be serviced easily.

Digital forwarders can attract middle market shippers and make this segment profitable through remote sales and a high degree of process automation including online pricing, booking, billing, payment, tracking and claims management.

Digital forwarders can be partners of choice. In their intermediary platform, they combine the two poles of governance which constitutes a unique asset: firstly, they offer quality – ease, liability and trust, and secondly, they also offer a network of hundreds of carriers in several countries for managing international shipments. As such, the digital freight forwarders can coordinate even better the different partners they already synchronize manually: customs, shippers, carriers, drivers, handling agents, insurance, etc.

Major forwarders have already started to develop their own digital talents and implement dedicated digital units and R&D cooperation. This increases their technological maturity with their own intellectual property, ultimately facilitating the shipper’s work and enabling fluid information.

The market is on the verge of gradually adopting the general digitalization and platformization potential for the industry.

Traditional forwarders need a smart strategy to manage the increased competitive pressure. In such an environment, the sustainability of their competitive advantages remains at maximum medium term for them.

This is why incumbents should consider the following two main aspects.

First, digitize: increase process efficiency using platforms and digital technologies. The major challenge here is to overcome organizational resistance. There may be ways to develop an internal digital unit, to be merged with the existing organization going forward. Dedicated change agents and the support from digital coaches who are proficient in both digital change and technology may also be a good way to start.

Second, traditional forwarders should use their valuable resources in a smart manner. They can develop resources that are difficult to imitate and leverage them into attractive new products and markets, for instance servicing the fast-growing B2B e-commerce sector.

Will all of this be achieved tomorrow? Probably not. But the forwarding industry is expected to further evolve and address digital threats and opportunities. In order to thrive, forwarders should trust one of their oldest skills: visualizing the way ahead and dare since in today’s rapidly changing world, the people who are not taking risks are the risk takers.

At Distroship, we propose complementary modules from Marketing & Sales to develop our forwarders’ business, to Quote & Book so shippers can easily process their shipments on your website, up to Billing & Payment so you get paid timely by all shippers. Our integrated cloud-based platform allows you to use your own branded application to accelerate your growth.

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