The freight forwarding industry is amid a digital transformation, and shippers have an opportunity to scale and enhance operations simultaneously. Learn more about the state of the industry now.
The freight forwarding industry is evolving on par with tracking and tracing capabilities, notes Dan Gardner of the Journal of Commerce. Traditional freight forwarding is being replaced by new applications and technologies, including drones, software-as-a-service (SaaS), robotics, and advanced analytics capabilities. Most importantly, a new generation of talent is propelling the industry forward, and traditional freight forwarding will soon be a thing of the past. The idea of digital freight forwarding is still in infancy, and many companies are happy with maintaining the status quo. Technology favors the next generation of customers and talent. Thus, shippers need to understand the state of the freight forwarding industry and why evolution is the only path forward.
The Freight Forwarding Industry Is Ripe for Change
Traditional freight forwarders face multiple battles as startups emerge, competitors stew on new SaaS models, suppliers digitize their operations, integrators work to bring harmony to systems and customers begin to take on freight-forwarding capacities, notes Boston Consulting Group. Today is the disruption age, and every industry on the planet is looking for the biggest and best technology to extract the essence of efficiency. Of course, it depends on the ability of beneficial cargo owners (BCOs) to recognize when it is time for a change, says Eric Johnson of the Journal of Commerce.
Startups Can Quickly Arise to Become Major Competitors
The biggest issue in today’s world of freight forwarding is the threat of a seemingly innocuous startup that becomes a major competitor. For example, the origin of Fleet in 2015 suggested it would become a meeting place for shippers that wanted to express their concerns over freight forwarding services and their supply chain partners. Within a year, the company had expanded to allow shippers to solicit quotes from freight forwarders within the platforms, and now, Fleet performs freight forwarding services, which is a significant blow to existing companies, but it does provide insight to where today’s freight forwarders are headed. Existing companies that have a proven way of connecting with shippers on a level transcending traditional freight forwarding, like Shypple, can tap into the sense of distrust within the marketplace. Paired with a guaranteed means of reducing time spent in managing freight, up to 30 minutes per shipment for Shypple-partners, smaller companies can transform into huge corporations overnight.
The Freight Forwarding Industry Wants Data-Driven Management
Data-driven insights are one of the best ways for any industry to gain an added layer of detail into its operations. The freight forwarding industry is no different; it wants a way to make informed decisions that will meet the needs of customers around the globe. Greater use of data will allow companies to scale operations, speeding global transport, and increasing customer service levels. In fact, the use of data-driven management capabilities in digital ocean freight forwarding will be significant through 2024. According to MarketWatch, the ocean freight forwarding market will experience a 7.2% compounded annual growth rate (CAGR), reflecting a global market size of more than US $141 billion over this time.
Brexit Will Continue to Affect Freight Forwarding
In the first week of June 2019, Prime Minister Theresa May resigned following her inability to secure a trade deal to ensure the stability of the UK and reduce disruption to the EU. The stage is set for Brexit to happen this year, and a lack of a trade deal as summer begins alludes to an uncertain future for the region. As a result, freight forwarding costs will be subject to increased market volatility, and those operating with traditional, manual processes will see the most significant harm to their profitability.
Align Your Organization With the Freight Forwarding Industry by Choosing the Right Partner
The freight forwarding industry is evolving. The ongoing threat of Brexit, demand for increased use of data and analytics, the transformation of startups into major industry competitors and an overarching demand for better, faster capabilities will push the boundaries of today’s freight forwarders. As the market expands, shippers need to understand the state of the industry and how their established versus perspective freight forwarding relationships can secure or destroy their future ability to handle global trade. Remember that with the right freight forwarder, shippers can save up to 30 minutes per shipment. Request your Shypple demo online to get started.