Is Freight Digitalization Still An Existential Threat?permalink

This year alone, Maersk has accelerated its direct-to-shipper strategy, digital forwarders have raised massive rounds (like Flexport’s billion-dollar injection), and platforms for forwarders and carriers – big and small – have continued to pop up almost daily, at least that’s how it seems.

The issue at hand is that, the so-called traditional freight forwarders mostly SMEs, having been living under the rock. They didn’t get out of their comfort-zone to make the much awaited and delayed move to ‘digitalization’.

The digital freight forwarders at the end of the day, are just ‘traditional freight forwarders’, however they differ in their approach of offering and presenting their services, which includes more visibility and transparency of the shipments from origin to destination.

So it boils down to quality of service and satisfaction that digitalization and transparency offer. If they don’t pose an existential, I believe they however do pose a grave threat to small to medium sized forwarders, who can’t adopt to this new industry standards.

The large sized freight forwarders, are quickly adopting to this change, since they have sufficient resources, as well as, they have stronger presence in a lot more countries, which is a greater advantage to their service offering, and they can retain customers for much longer, until, the ‘digital forwarders’ grow in size, and have presence in as many countries as they do.

Wednesday, July 31, 2019