Ahead of the publication of the Global Freight Forwarding 2018 report, Ti’s team of analysts have conducted extensive interviews with nearly all of the world’s top 20 freight forwarders, a selection of the most prominent spot market platforms and digital/online forwarders, as well as a range of senior industry figures. The research forms one of Ti’s largest ever interview-based studies of the forwarding market, and the results point to significant opportunity and threats ahead.
Approaching the opportunities and threats is an ongoing battle for large traditional forwarders and the new breed of tech-enabled start-ups alike. There is a fair amount of consensus at a strategic level, but 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 that suggest a market seeking to rapidly transform itself.
What exactly is on the agenda for transformation is a significant question, though. Between 2013 and 2016, a number of spot market platforms, online freight booking marketplaces and online forwarders emerged, leading to many questions about the viability of the traditional forwarding model in a digital age. How profound, though, has the entry of such players been in fundamentally changing forwarding?
According to many of the largest forwarders in the world, the answer is in two parts. The entry of online forwarders and platforms 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. On the other hand, at a first principals level the underlying operations of freight forwarding have remained relatively unchanged – at its core, forwarding remains a process of buying space and securing volumes, of ensuring goods reach destination on time and in good condition, and of building trust and lasting customer relationships.
Here, an analogy from the tech world can be applied to the new age of forwarding. Online portals, platforms and marketplaces have created a new front-end of forwarding. They provide a highly scalable, polished and easy to use route into forwarders for shippers, and a new route to market for those same forwarders. The ‘back-end’ of this new age, though, is not the servers, code and technology stacks which support the front-end, but the operational-level forwarding tasks and process which support the end-to-end movement of goods on behalf of shippers.
The scale and pace of transformation on both the front- and back-end of forwarding is as diverse as it is complex. The world’s largest forwarders are transforming from within, embracing new technology and operating models as quickly as the new start-ups are innovating and enhancing customer experiences. It’s too early to tell what the outcome will be, but two central points of consensus are emerging. Firstly, to be a successful forwarder is to be a tech-enabled forwarder. And secondly, customer centricity is everything as we move towards forwarding-as-a-service.
Author: Nick Bailey
Source: Transport Intelligence
Ti’s upcoming Global Freight Forwarding 2018 report contains full analysis and insight from the interview-based research programme. As well as extensive depth and detail on the threat and transformation posed by tech forwarders, further analysis of the benefits of introducing new technologies into forwarding processes, the opportunities and challenges of serving SME shippers and the potential of African markets is included. Click here for more information
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