DHL Global Forwarding’s new online quotation system underlines change in forwarding

DHL Global Forwarding has finally launched its online quotation and booking service. Of the major forwarders, DHF GF is one of the last to provide such a service. It is unusual that Deutsche Post DHL has been slow in rolling out this capability as it is usually at the forefront of technological developments. This may in part be due to the problems Global Forwarding has had with its internal information systems. It may indicate that DHL GF has regained its balance in this area.

The new system, called ‘freightquote’, delivers to customers the opportunity to get a price and a contract immediately. DHL describes it as being able to rapidly create “competitive customer quotations based on door-to-door all-in rates and transit information.”

Such systems are a bit of a departure for the freight forwarding sector. In the past gaining accurate quotes for services was not an open process. Indeed, it might be that all the large forwarders are now publishing are the ‘rate card’ prices, with real prices for large volumes still open to negotiations. Nonetheless the open publishing of data is novel.

Freight forwarding is about superior information. Forwarders have better knowledge of the price that services can be bought for and knowledge of what they can be sold for than their customers. The forwarder’s better knowledge of these two numbers keeps it in business. Giving information on prices reduces the superiority of that knowledge and thus its competitive advantage.

In addition to online quotation systems, there has also been the growth of non-traditional ‘web-based’ entrants offering information on freight rates outside the traditional paradigm of a forwarder. The likes of Freightos offer a customer the sort of visibility of the sea freight market that it would have struggled to achieve previously. This represents a profound change in what economists would call the ‘information asymmetry’ of the ocean container and possibly the airfreight markets.

The implication of these changes is a restructuring of the forwarding market. Relying on the traditional approach may no longer be sufficient. The strength of both suppliers of transport assets and buyers may increase. Relying on being something resembling a trading house may no longer be sufficient to sustain a forwarder’s profitability. Larger providers that have other capabilities may be able to adapt, not least thanks to their purchasing power. Those that do not could face problems.

Source: Transport Intelligence, December 7, 2017

Author: Thomas Cullen


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