Digital Disruption and Challenges in Freight Forwarding

As technology becomes a building block in the corporate world, the freight forwarding industry grows more competitive. The degree of digitization applied to a company’s employees, processes, and overall vision now aids in increasing market share.

The biggest driver of technological application lies in the surrounding freight forwarding landscape. When being faced with increased customer awareness and demand for digital services, freight forwarders are pressured to search for electronic solutions to strengthen their adaptability to a perpetually changing market. This competitive pressure is usually initiated by new entries into the market who invest their focus on enhancing the digital customer experience. Because of the availability of freight forwarding solutions and cloud based software programs, market accessibility has become a lot easier than it was in the past, and paves the way for younger firms and startups to come to life.

Moreover, larger names in the freight forwarding industries already have an established customer base. This translates to high expectations of benefits stemming from end-users as well as B2B clients and investors.

The main catalysts of vast changes in digitization lie in two crucial aspects: the first is advancements in technological infrastructure; it is now easier than ever to build complex software that scales. Many leading global IT service providers, such as Amazon, Google, IBM, and others, offer reliable, secure, and efficient cloud hosting at affordable prices. New programming languages enable building software solutions faster and with fewer resources.

The second catalyst is the growing collective interest of supply chain members in integrating with each other through standards and APIs. For example, when container shipping lines collectively agree to follow the DCSA’s Track & Trace standards, it becomes much easier for software developers to build a single integration point and use it with many carriers, as opposed to having to build and maintain tens of different integration points with different carriers.

Digitization has shaped the freight forwarding industry in a multitude of ways. As customer experience becomes more tedious and demanding to handle, applying digital processes to the freight forwarding organizational structure ensures visibility and transparency. Freight forwarders who still rely on manual operations such as emailing and personal hand-offs nowadays are predicted to be less flexible and responsive to a rapidly evolving external environment.