FREIGHT FORWARDING: ONLINE V/S TRADITIONAL – AN ANALYSIS
Freight Forwarding companies broadly occupy a prominent part in the Indian Industrial sector. It is actually the foundation of all manufacturing & trading activities in our economy. Not only has it played a crucial role in processing the smooth movement of goods from its point of origin to the point of its consumption but it ensures that everything is delivered at the right time, right place and to the right customer. In a developing country like India where demand is always high and consumption is emerging, the stakes in the freight forwarding industry always remain high for both consumer and supplier.
According to Global Logistics Research, digitization has added a lot of value for freight forwarders as the online services helped to improve supply chain transparency and efficiency while potentially reducing costs as well. Online Freight Forwarding services seek to optimize the freight forwarding process paving the way for advanced growth and profitability. As a result, the ability to analyze customer’s needs became simple and they could be provided with the differentiated and advanced logistics solutions.
CHALLENGE FOR MODERN FREIGHT FORWARDING:
Technology is doing to freight forwarding what it’s done to just about every other industry – making it reconsider its pinch points. Shipping is largely a commoditized service due to which freight forwarders are fighting to market share with very few tools in their belts. On the top of that, fragmentation of the marketplace is the main issue in freight forwarding sector. Falling fuel prices and an overabundance of capacity have pushed prices down. This kind of scenario is the cause due to which these freight forwarding companies have no other choice other than offering something innovative or out of thee box.
One important strategy to counter this challenge is to use balance sheet strength to acquire niche players in important trade routes and geographies, especially in emerging markets. As trade routes become more competitive and as freight rates fall, the industry’s traditional bargaining power with its shipper’s volume would be challenged. That will require better IT tools to improve internal process and efficiency to generate analyses that result in deeper understanding of customers industries and business processes.
TRADITIONAL FREIGHT FORWARDING:
Presently, only a sprinkling amount of traditional freight forwarders provides the same level of visibility as digital experience offers. Technology is undoubtedly the best key when it comes to quickly sharing the information or transparency in the entire process. Doing things in an old-fashioned way works only for certain industries and when we talk about freight forwarding companies, there is an issue of up to the minute rate availability, as well as RFID identifiers for containers which alert shippers about their cargo at all times, avoiding the dreaded black hole of invisibility.
One of the main cause due to which the traditional freight forwarders are facing a down shift in technology is that only a handful of traditional freight forwarders provide tracking tools and sailing schedules. Online freight forwarders tend to have tracking tools for various types of shipments. Those who can grasp the importance of transparency are the ones who are leading.
On the other hand, there are still 68% of people who believe that traditional freight forwarders are still relevant today. Now the reason for this is the personal touch that many shippers have with their freight forwarders. For some people, it’s vital to know that there’s a human presence behind the delivery of goods and to have someone they can rely on to make sure things progress along well. That’s however not possible when it comes to online freight forwarder.
Though traditional forwarders risk falling behind the technology curve, we’ll wind up with the conclusion that the future of freight forwarding companies is really hard to ponder upon as it is facing more uncertainty with the dynamic economic changes happening now.