Ferry Heilemann, CEO and co-founder of FreightHub, continues our series on how digitisation will effect freight transport.
An ongoing debate regarding the demise of freight forwarding has brought to light many interesting points. At FreightHub, we believe there is no ‘us’ versus ‘them’ but rather everyone working together including shippers, 3PLs, carriers, forwarders and the new breed of forwarders/technology providers to ensure shipments arrive at final destinations safe, on time and at the best price for both the shipper and the carrier. Depending on the shipper’s needs and requirements, everyone has their purpose.
Automating forwarding processes such as rates, route recommendations and customs allows for major savings. Full cost transparency helps customers calculate their true cost of service as some forwarders tend to hide their profit after the fact or via shipment surcharges such as drop off charges or similar ‘surcharges’. In addition, as forwarders look to differentiate themselves by moving further and further up the chain and offering value-added services such as fulfillment and warehousing and trade management consulting – technology and automation will play leading roles towards forwarders’ success.
While the need to differentiate is important, so too is transparency within forwarding processes. We’re all familiar with transparency throughout shipment tracking but how many times have you as a shipper questioned an invoice from a forwarder? What’s the true rate versus the mark-up from the forwarder? And how about the additional charges such as demurrage, surcharges and taxes? Automation is providing the much needed transparency that’s been missing in forwarding processes including tracking along the whole supply chain including on-carriage. Eventually it is likely that fulfillment and last mile will also be included.
According to Kate McCauley of Tuscor Lloyds, “People still value people. They appreciate knowledge as value in the supply chain and lean on expertise. This is something technology can never really replace”. Indeed, Ms McCauley is so right and through the use of technology and automating processes, people will be freed up and able to take full advantage of knowledge and expertise logisticians bring to the table instead of time spent searching for the right rate, the right mode of transport and capacity, the right lane pairing and more.
Imagine the possibilities if logisticians including forwarders could fully collaborate with shippers and other partners within supply chains. New services and geographic opportunities, identification of additional processes to streamline and/or automate for cost savings and efficiency improvements as well as additional opportunities from analysing data garnered via automation.
Even though we do not take an ‘us versus them’ view of the forwarding market, we do believe in the importance of technology and automation and its role in improving efficiencies and transparency. Shippers are under more and more pressure whether it’s from their shareholders or their customers to reduce costs, to improve margins, speed up delivery times and more. Automating forwarding processes as well as utilising logisticians’ knowledge and expertise will go a long ways to achieve the results shippers are looking for.