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We're All Going Digital, and It's Still Not Enough

Apr 20, 2018, 10:41:21 AM / by Fauad Shariff

In this blog, we spend a lot of time talking about how important it is to digitize. But let’s be honest: many of you have already invested in digital tools like rate management software, order management systems, etc. This trend has been going on for a few years. It’s evident that this kind of technology adoption is necessary. But it’s not sufficient.

In order for freight forwarders to survive and prosper into the next era, they need to innovate, not just digitize.

What Does It Mean to Innovate Rather Than Just Digitize?

Digitization is a means to an end, and the end is true innovation. The best way to get there is by decoupling commodities (like the container space you buy and sell) from the value-added services you provide. The trick is to simplify the commodity portion of the transaction as much as possible so that you can focus on providing the services your clients value.

Of course, these services you provide already involve technology and may benefit from further automation. But configuring this automation to suit the particular needs and challenges of your clientele still requires the knowledge and experience only freight forwarders can bring to the equation.

To illustrate, let’s compare ocean freight to another industry: travel.

It’s easy to see how the proliferation of online travel aggregators has almost completely eliminated the need for travel agents. But there’s a bigger picture here: that plane ticket that you can now get in a few clicks is a commodity, just like a freight container...but it’s only one element of the travel experience. You still need to:

  1. Get to the airport
  2. Get through security
  3. Board your plane.
  4. Perhaps go through customs or immigration at your destination
  5. Pick up your bags
  6. Arrange ground transportation to your destination

That’s a lot of steps!

If you had one person or service that could seamlessly manage all that for you through some combination of personal service and automated processes, you’d probably pay a premium for that.

Well, that’s not that different from freight forwarding.

The solution is to make the commodity portion as seamless and automated as possible. That’s why we’re making the buying and selling of freight capacity incredibly simple with our CoLoadX marketplace. Our goal is to assist -- not replace -- freight forwarders. By automating the commodity part of a transaction, you can pay more attention to the high value services you offer, like completing specialized documentation, ensuring customs clearance, and navigating the hundreds of obstacles that inevitably occur when getting a container from point A to point B. And of course, there’s the personal touch. This is still a relationship business, and if you’re the one who closed the business, the clients want to know you’re always there to solve problems, not shuffle paperwork.

And that’s your opportunity to innovate. Even as you begin to compete with digital freight forwarders, there’s only so much that can be automated -- at least with today’s technology. By radically simplifying container procurement with a platform like CoLoadX, you are free to focus on innovative ways to excel at your specialty services. That's where the real money is made.

In the coming weeks we’ll be writing more about the relationship between digitization and innovation with respect to competition, profits, and our place in the ever-changing supply chain. What’s clear is that growing in this new era requires new thinking and recognizing that technology is a tool, not an end unto itself.


Topics: Freight Forwarding, NVOCC's, Freight Forwarders, Innovation, Digitization

Written by Fauad Shariff

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