Freight and logistics benefit from digital technology just as much as any other area of manufacturing and supplying. Lowering costs and reducing turnaround time offers a host of benefits and makes everyone happy all around. From APIs to automation, see how technology advancements can future-proof the freight forwarding industry.
What is Freight Forwarding?
Freight forwarding is the service used by most importers and exporters to arrange freight shipments. These are licensed and qualified experts who have a unique understanding of the end-to-end shipping process, so they can act in the client’s best interests.
Some freight forwarders specialize in air or ocean shipping, others in trucking and rail. Some only limit their services to certain countries also. Still, others will handle any of the logistics necessary to get items from Point A to Point B.
A freight forwarder essentially handles all the bookings, paperwork, and payments necessary for shipments. They will act on their client’s behalf with various parties, such as customs, cargo carriers, and other logistics providers. They will also troubleshoot any issues that might arise with a shipment.
According to global consulting firm Kearney, the $200 billion freight forwarding industry is highly fragmented, with just five global companies controlling only about 30 percent of the business. The remaining 70 percent is divided among thousands of niche and regional providers. So it’s a competitive market but also a complex one. Many of these businesses are setting themselves apart through technology innovation.
How Technology is Future-Proofing the Freight Forwarding Industry
If you work in logistics, it’s likely that your business will look very different in a few years. That’s because technology is rapidly revolutionizing the way we work and communicate. Businesses in this sector will soon discover that the window of opportunity for playing catch-up is getting smaller. If you fail to innovate, you may be left behind by your competitors.
The good news is that this technological revolution is much more accessible than past ones. You don’t need hundreds of millions of dollars worth of equipment to stay competitive. The emphasis is on working smarter and delivering a better client and employee experience.
Optimizing planning, workflows, and visibility have become vital in importing and exporting. When your business streamlines these areas, it will naturally experience better profit margins. Here are five ways technology is future-proofing the freight forwarding industry and helping businesses continue to move in the right direction.
1. The Internet of Things (IoT)
The Internet of Things (IoT) means connecting any item equipped with communicators or sensors to the internet, giving freight forwarders the ability to see it and sometimes control it remotely. IoT is making a significant difference in logistics, whether it be in warehouse automation systems using RFID tags, last-mile delivery, or ports of every shape and size.
One of the biggest challenges this industry faces is a lack of visibility throughout the supply chain. More and more shippers and suppliers are implementing RFID tags, short for radio frequency identification. These tags are placed on parcels and can be scanned automatically as an item passes through a checkpoint (some even have GPS tracking capability). This gives the freight industry access to real-time data about its shipments, which can be shared with clients.
2. Advanced Machine Learning
Another way to future-proof a freight forwarding business is to learn how to work smarter by leveraging all available data. Advanced machine learning makes this possible. Humans no longer need to sit down with spreadsheets and complex formulas to figure out what’s happened or what to do next. This technology automatically collects and analyzes data to identify patterns and trends.
Machine learning technology will provide a business with detailed insights about performance as well as industry-wide data. This information can help a business make decisions with respect to growth and more efficient operations. Machine learning can also be used to determine the most efficient routes for freight due to weather, marine, or other changing conditions.
3. Connected Devices & Applications
The freight industry requires an efficient and reliable means of transmitting data. Fortunately, there are now a variety of technology applications helping businesses stay organized. The freight industry has strict standards and formats when it comes to data transmission. But advances now allow for more secure and real-time connectivity of devices and applications. For example, mobile apps can capture data on the road or in the warehouse and share information in real-time with supply chain partners.
4. Cloud-Based Solutions
It’s incredibly inefficient to rely on antiquated technology to manage a shipping business. If someone needs information, they have to travel to the office to log in to the system. With cloud computing, a freight company can place and store its data in a virtual space, i.e.- the cloud.
Instead of having to scale up technology as the business grows or reposition equipment, a business can take advantage of cloud-based storage and cloud-based software-as-a-service (SaaS) solutions. Combined with mobile apps, this enables freight companies and managers to be connected to systems at any time and from any place.
5. Blockchain
Cyber threats are something to take seriously in the logistics industry. Reputable companies conduct regular testing and security audits to ensure data and systems are safe from vulnerabilities.
Blockchain is being used more frequently in this industry to improve efficiency and security. By integrating blockchain with existing processes, all parties can securely access consolidated ledgers to judge the authenticity of data and review records.
These are just a few of the technology solutions allowing freight forwarding companies to lower costs, reduce turnaround times, and improve the client experience. There will certainly be more innovations in the coming years. Freight shipping firms must remain current with the advances and trends to remain true to their commitments and business associates. It won’t be the big forwarders that dominate this industry in the future but rather the digitized forwards that control the market with client-friendly solutions.
