iContainers says that the speed at which the freight forwarding industry adopts digitalization will be dictated by the big players. The 100% online freight forwarder has conducted a comparative analysis between traditional and digital freight forwarders in order to visualize their differences in efficiency and possibilities.
According to iContainers, the bigger freight forwarders will be the ones ‘setting the pace’ of the sector’s digital transformation as they have the capacity to do so. Already, some have begun to incorporate digital improvements in their processes based on the emergence of new and developing technologies, especially with regards to user experience.
“The big guys are essentially the ones setting the pace. Their success with new platforms will largely determine how quickly others will follow suit. 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,” says Klaus Lysdal, Vice President of Sales and Operations, iContainers
Mr Lysdal also warns of a possible concentration of operations among the smaller freight forwarders in order to survive technological race. For them, pairing up may be the best way to compete.
“If the big forwarders succeed, mid-sized forwarders are likely to emulate their digital footprints. 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 digital revolution in the maritime sector is slowly gaining strength and already, certain operators have begun to map out new service standards in the digital future. But even then, Mr Lysdal believes that it will still take a while before traditional freight forwarders succumb to this pressure, or sink.
“I reckon it will still be a long way, and by that I mean a few decades to go before traditional freight forwarders are phased out. Right now, the digital companies are just starting to make their presence known,” adds Mr Lysdal
Traditional vs online: Their different functionalities
According to a recent survey conducted by logisTIcs, a global logistics research and consulting partner, while 68% of respondents believe that traditional freight forwarders remain relevant in today’s environment, a massive 92% of respondents indicate that digitization will add value for freight forwarders.
For a clearer look into the differences in operations and efficiency separating traditional and online freight forwarders, iContainers has conducted a comparative analysis of their respective functionalities.
|Traditional forwarder||Online forwarder|
|Website functionality||Limited to services the company offers.||Uploading of documentation and online rate requests.|
|Quote requests||By email. Take days.
Additional surcharges not included.
|Immediate online quotes.
Additional charges listed in final price.
|Tracking||Very few offer tracking, and only limited to their own LCL cargo.||Track online 24/7 or receive automated notifications of shipment status changes.|
|Human relationship with clients||Main competitive value||Automated processes where possible. Human intervention only when necessary|
While most traditional freight forwarders have websites, they mainly only list the services they offer. Only the more advanced online freight forwarders feature documentation and rate functionalities on their site.
Certain traditional freight forwarders may have a “quote request” function, but getting in touch with them will prove difficult. Sending in a request may only get you a quote via email, and sometimes only days later. According to an iContainers survey, 40% of all freight forwarders take four to seven days to provide customers with a quote.
Perhaps only a handful of traditional freight forwarders offer immediate quotes and that usually only applies to their own LCL products. More often than not, they come in the form of a tariff where shippers would have to look up 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 listed for full transparency.
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. Online freight forwarders tend to have tracking tools for various types of shipments.
iContainers constantly strives to improve tracking efficiency and transparency. This year, it launched a Track & Trace function and automated notifications system for shippers. Not many online forwarders offer these tools and those that understand the importance of transparency are perhaps the ones that are leading the digital revolution in the industry.
The human touch
According to iContainers, much of the resistance to this digital change by the traditional forwarders come from the personal touch/relationship that many shippers have with their freight forwarders and value. For them, it’s vital to know that there’s a human presence behind the pile of paperwork, to have someone they can depend on to make sure things progress along smoothly.
That’s however, not to say that online freight forwarders are not able to fulfill this role.
“Many seem to have the misconception that online freight forwarders lack a human presence and that’s certainly not true. The basic principles are the same. There are physical people working on ensuring a shipment goes as planned. The difference is in the intervention and method of execution,” says Mr Lysdal.
“At iContainers, our operatives step in only when needed, in order to reduce the amount of to and fros and speed up efficiency. If things were to go wrong, shippers can be assured of an operations specialist helping them out.”