Exclusive: “Digital Disruption” Being Met with Innovation in Supply Chain Forwarding Sector

A recent flurry of mergers and acquisitions in the global freight forwarding arena means it is now aligned with the “digital disruption” industry analysts have been forecasting for some time.

Along with new forwarding players and suppliers, supply chain managers are embracing digital technologies to develop a variety of innovative business models that will dramatically improve the shipper experience and eliminate entrenched operational inefficiencies.

Indeed, these digital business models have the potential to overturn the dominant position traditional forwarders have long held in the industry.

Cathy Morrow Roberson, president of the research firm Logistics Trends and Insights, notes in this exclusive interview the major transformational impacts.

Supply Chain Management Review: Is it safe to say that e-commerce is driving this change?

Cathy Morrow Roberson: Without question. The global forwarding business is changing in a number of ways thanks to the growth of e-commerce, rising demand from emerging markets and changing global economic and trade conditions. To meet these demands, the forwarding business is investing in technology to improve efficiencies and to respond faster to a quicker changing environment as well as changing needs of customers.

SCMR: How are freight intermediaries meeting this challenge?

Morrow Roberson: Forwarders are investing in technology in several ways – partnerships to test new technologies such as blockchain or AI; upgrading existing technologies and/or creation of forwarder-specific online platforms and also participating in third-party online platforms such as Freightos.

SCMR: What do shippers need to know about theses digital services/platforms?

Morrow Roberson: Shippers need to know they have more options in terms of the type of forwarder and services offered by forwarders. For example, Agility Logistics introduced their online platform, ShipA Freight, focused on the small-to-medium sized business. For B2B e-commerce, UPS partnered with eCommerce technology company Inxeption to allow businesses to market and distribute products on multiple online channels from one secure place. In addition, in 2018, UPS launched Ware2Go, a new company that provides an online platform linking businesses with available warehouse space and fulfillment services. The platform targets B2B eCommerce companies.

SCMR: Anything else you care to add?

Morrow Roberson: Meanwhile, perhaps one of the most innovative 3PLs and forwarders, SEKO Logistics, recently introduced OmniReturns, a returns service for retailers, etailers and consumers that allows customers to have greater visibility of the logistics operation. Last year SEKO fully acquired its partner, Omni-Channel Logistics which is focused on cross-border e-commerce and global e-commerce returns solutions.

SCMR: How do they differ from traditional services?

Morrow Roberson: Digital services/platforms can be bundled, tracked and managed easier and quicker than traditional services. Visibility and transparency across the bundled services is seamless in many cases.

SCMR: So what's changed?

Morrow Roberson: Traditional forwarding was often considered the procurement of space and management of freight via air or ocean and often required emails and phone calls with customers. Customers had little insight into progress, rates or possible exceptions and a lot of times the forwarders did not have the insight either unless they contacted the carrier directly. Today, forwarders have expanded their services and in a lot of cases mirror 3PL service offerings.

SCMR: What are the benefits for shippers to put them to work?

Morrow Roberson: The ability to monitor, book, change etc. 24/7. Digital services are not restricted between 9:00 and 5:00. There's also savings in terms of time and perhaps cost. But a big benefit in my opinion is the visibility and data that digital services offer. If a customer is taking advantage of a bundled service, there is no drop off in terms of visibility. The data from such digital services can be utilized by both the forwarder and customer in terms of new products or tweaking existing ones or improving time in transit or even mode of transportation.

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