It’s been an exciting -- dare we even say thrilling -- year in freight. A year that started with the shuttering of a major carrier also set container freight records in ports around the world, inspired massive new investment in ocean freight startups, and saw significant progress in logistics’ push towards digitalization. We’ve been writing each week about these developments and exploring what they mean for the ocean freight industry. This week we distill them down to what we think are the five of the most fascinating trends in cargo freight in 2017:
The Digital Revolution Is Accelerating (In Unexpected Ways)
A few weeks ago, ocean freight giant Maersk announced it was expanding its digital procurement capabilities. Meanwhile, freight forwarding startups using technology to manage logistics (like us) continued to draw investor interest and press coverage. The Journal of Commerce’s Container Shipping Technology Matrix showed just how many companies are trying to solve freight problems with tech. In many ways, it was a banner year for the continuing digitalization of freight forwarding. 2017 made it pretty clear: digitalization is the future of logistics.
And then in September the logistics world was rocked by news of a massive $110 million investment in Flexport, a next-generation technology-driven company that combines several functions in the supply chain. The transaction valued the company at approximately $1 billion. And when venture capital flows into one tech company in a space, other deals are sure to follow. So keep your eyes on future investments in the startup world -- it will surely be the birthplace of even more innovation in 2018.
Our take on this topic: Looking for Logistics Innovation? Keep Your Eyes on Startups
Tech Security Becomes an Ocean Freight Concern
With the all the benefits technology is bringing to logistics and ocean freight, it also has a downside: the threat of crippling cyber attacks. That’s what happened to Maersk in June, when the infamous Petya attack caused worldwide disruptions in their tracking and port-management systems. It was the most high-profile attack on ocean freight operations to date, and made one thing very clear about the quickly developing technology dependence in logistics: investing in cyber-security has to be a part of any serious growth and development plan.
Our take on this topic: What the Cyberattack on Maersk Means for your Logistics Business
Trade in the Trump Era
When Donald Trump was elected president, most weren’t sure what it would mean for global trade. On one hand, there was optimism in the world of finance at the prospect of a pro-business administration. On the other hand, many worried that tough talk on trade, combined with a possibly divisive foreign policy would stymie imports.
Regardless of your opinion on Trump’s approach to trade, U.S. imports grew by almost 7% in 2017 compared to 2016, providing a strong showing despite the political uncertainty that colored import predictions at the start of the year.
Foreign policy will remain influential in determining import growth moving forward. President Trump’s recent visit to Asia had important implications for one of the U.S.’s biggest trade partners [LINK]. Asia remains very influential with respect to American import growth: this past year, Asian factories amped up production ahead of Chinese New Year, directly contributing to a 5% gain in import traffic to kick off the year. Keeping Asia happy will be an important task for the Trump administration.
Our take on this topic: Trump, Asia, and Trade: What You Need to Know
Retail is Winning Logistics
2017 was the year retail made serious moves to take over the last mile in logistics. Major retailers including Amazon, Walmart, Alibaba, and Ikea turned last-mile logistics into platform-specific services.
And other big retailers have taken notice. Target is investing heavily in their supply chain infrastructure with an aim to turn brick and mortars into local warehouses. Meanwhile, Best Buy has started bundling last-mile initiatives (in-store pickup, installation, no shipping minimums) as complimentary customer service perks for their e-commerce consumers. Retail is leading the way on getting products from checkout to home as quick and cheap as possible. They’ve become the leaders in last mile.
Our take on this topic: Game Over! How Retail Just Won the Last Mile
Freight Forwarders Matter More Than Ever
Container traffic at many of the major ports around the world set new records. U.S. import traffic rose throughout the year. Billions of dollars are traveling the world in shipping containers. And Freight Forwarders are their only way to make it from warehouses to store shelves.
This year proved that the value-added services Freight Forwarders provide are indispensable. It’s why so many startups in the logistics space are trying to emulate Freight Forwarder responsibilities: not to replace them, but because they recognize the key role a forwarder plays in any freight transaction.
If there was concern for the role of the Freight Forwarder in the future of logistics, rest assured: forwarding is as important as ever.
Our take on this topic: Why Forwarders and NVOCC’s Matter More Than Ever
What do you think of our list? Did we miss anything? Let us know in the comments below or tweet us @CoLoadX.