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Threatened by AI and Block Chain, should the freight forwarder feel threatened or embrace the digitization?

mario      0

Threatened by AI and Block Chain, should the freight forwarder feel threatened or embrace the digitization?

Get shipping quotes in a matter of minutes. Book your FCL or LCL online with a click of a button. Ur a digital hero and want to do it yourself, what can go wrong right? Good luck to you.

As a freight forwarder I have noticed a few new disruptor companies entering the marketplace this year only. We’re talking about new companies that like to eliminate the freight forwarder and want customers to book their container direct from whoever, think Uber among ocean shipping or perhaps Airbnb among container transport. Not sure what they think or have been smoking.

Customers skipping the freight forwarders by booking their own cargo for transit is just one aspect that the freight forwarder manages for you. While digitization can make for a smoother and more efficient information transmitting process, the industry still faces many challenges in trying to automate the complete freight forwarder tasks and obligations.

Why I think digitization is harder with freight forwarding.

The freight forwarding industry is a more complex industry than for example travel agencies, a commonly cited example of a field that successfully transitioned to digitization.

A consumer can book a flight from one city to another, but the only “party” involved is the airline and the government of that country you would like to enter. With freight forwarding, everyone can book a shipment from one port to another port, but there are many more parties involved, like a truck collecting empty container from the port need access to the highly secured container yard, picking up the goods, tariff filing agency, customs declarations or duties through export customs broker, import customs broker and delivery to the final destination and returning that empty container to the yard. “The whole process can be extremely complicated,” with multiple vendors makes is almost impossible to automate the process in one software solution, plus each country has its own rule and regulation.

No way that new tech companies would easily cover all of global shipping while some carrier employees have no clue what they are doing. Virgin Shipping recently tried obtaining standardized quotes from a few of the major online platforms and was surprised by its outcome. (One example includes a 109-year delivery time, thanks to a technical glitch). And one was aimed only at smaller companies, standard services and sizes, nowhere near suitable to disrupt the FF agent.

Yet the freight forwarding role doesn’t go away just by clicking on a “book it” button. You still have to do the work behind the scenes, arranging the ocean freight, trucking and customs clearance. The online software companies are merely the front end, the customer-facing software to make the process easier, but who do you think processes your documents based on the online form you filled? Or who will ask you for clarification if key info is missing? And everything in shipping is key info believe me. Correct, your freight forwarder is still in the background and you are paying for it.

The challenge: eliminating the freight forwarder and linking truck broker, governments and carriers to the shipper

Shipping is, let’s face it, complex. A shipper using an online booking system to book a container, in this digital age, makes sense, if only their needs were simple, and they know precisely what they want and they’re familiar with the routing and they skip the countries that have maritime regulations in place.

Routes like Guam to Durban, for example, have so many players on the route that it’s impossible to get a solid bid as it requires transshipment and therefore multiple different carriers and multiple quotes. If only the needs are simple and it’s just a port-to-port service without trucking, tariff filing and customs issues or strange duty requests, then this is a time when you might go with an online system with a freight forwarder behind it who has a limited number of activities but get to charge you regardless.

When a shipper is new to the market or has complex shipping needs, online platforms aren’t able to handle the many variables. Shipping terms include various “what ifs” based on customs exam costs, or trade offs in shipping to a cheaper port, bunker and demurrage. Having an agent to deal with different time zones and reducing potential costs adds value, this service actually cost time, money and hassle. lots of hassle.

With the current tools used for shipping it is only possible with total buy in from all players and government to digitize the freight forwarding process and eliminate this beautiful profession. Another method would be to disrupt the classic modes of cargo tools such as container, yard, truck, and ship and make them autonomous and the commodity readable and traceable only then is when there will be no need for a freight forwarder.

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Threatened by AI and Block Chain, should the freight forwarder feel threatened or embrace the digitization?
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Threatened by AI and Block Chain, should the freight forwarder feel threatened or embrace the digitization?
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As a freight forwarder I have noticed a few new disruptor companies entering the marketplace this year only. We’re talking about new companies that like to eliminate the freight forwarder and want customers to book their container direct from whoever, think Uber among ocean shipping or perhaps Airbnb among container transport. Not sure what they think or have been smoking.
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Logistics Trader
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