An online resource or blog discussing logistics would not be complete without addressing the current state of the industry, as well as what is to come in the future. The same is true for both Freight Forwarding Companies and IT companies. To further complicate matters, the industry of freight forwarding is undergoing expeditious change.
As per Marketwatch: Five years from now, the maritime freight forwarding industry will mark a 7.2% compound annual growth rate concerning profit, and the market scale worldwide will hit AED 519,023.16 million after 3 years, from AED 366,585.36 million in 2019.
The industry experienced less than a 2% decline in freight forwarding worldwide in terms of volume before a couple of years. But, such statistics were compiled prior to the busiest shopping season and there is not yet an updated version of the statistics. No matter what, let’s analyze the market for freight forwarding in detail, Comprising the phases of digital transformation and what Freight forwarders should be aware of.
The President of Trade Facilitators, Dan Gardner stated:As new technologies emerge, the freight forwarding industry is expeditiously transforming. There is disagreement among experts and leaders about how digitalization will impact the market.
Among the supply chain technologies that comprise automated warehouses, predictive analytics, the aerial delivery of goods, freight forwarding agents that operate online have sparked the most discussion among industry experts. On the other hand, a couple of individuals disagree with the numerous applications for robots and drones. Views on forwarding agents that operate online differ from a storm in a teacup to an industry disruptor.
As Freight Forwarding Companies do not own cargoes or run transportation means, there is the belief that they cannot make significant contributions to the market.
In some people’s eyes, this may be true. Freight forwarding agents can generate more value for their customers by obtaining good rates, partnering with more carriers, and even transporting freight more rapidly when compared to independent shippers.
An inability to understand the worth of freight forwarding agents, especially those striving to adopt digitalization as the norm, will result in increased transportation charges for individual shippers. Meanwhile, digital transformation investment seems to be going well to set new records and doesn’t seem to be slowing down any time soon.
With conventional quoting methods, freight forwarding agencies can sustain revenue. However, B2B clients, namely shippers desire more rapid, economical quotes.
To put it simply, shippers desire instant quoting that can work with their current e-commerce platforms and completely synchronize their complete shipment handling from the moment, and shoppers tap on checkout.
The need for more rapid, effortless integration and online solutions are contributing to the small decline in the freight forwarding market in 2019. As outlined by Research and Markets, the freight forwarding industry worldwide showed a decline of 1.4%. However, a decline like that is not always indicative of a reorientation from freight forwarding. Rather, it indicates the unwillingness to adopt new technologies and skills.
Future-oriented freight forwarding agents will have the chance to expand and gain an edge over their contenders with technology as well as constant digital transformation.
In order to expand revenue margins substantially, the freight forwarding agents can use the lessons learned in the past and anticipate the future. Taking advantage of this information and attaining growth involves the following best practices:
Learn about the state of the freight forwarding software industry. Due to the novelty of freight forwarding, as a service carried out online, the total freight forwarding management platform software companies are usually straightforward to evaluate and short.
Focus on your digital investment in your marketing program to acquire more candidates. When compared to 3PLS, there is a higher success rate for digital freight forwarders in recruiting new talent.
Make the switch to digital: Increase bookings and carrier contracts via utilizing digital systems. Within the reserving and quoting cycle, response time stays important.
Utilize Data: In order to enhance your operation constantly, utilize data collected during management resources and digital operations. If you lack the data, then provide your team with resources and means to begin collecting data.
Digitalization transforms the business environment performed by the Freight forwarding Agencies and that of most of their suppliers and clients. It has an impact on important factors of its added value – Multiple shipments grouped together, charges and transparency of operations, capacities, details on routes, and more. Digitization of the industry eases work significantly via automating processes that before needed human involvement. Obviously, all of this wouldn’t have been feasible, without constant standardization and enhancement of outsourced functions namely transportation, customs clearance, warehousing, and the like.
In this situation, what used to coexist with freight forwarding tends to invade its domain- airlines, shippers, and digital platforms that provide information and bookings or other business models on the basis of the digital economy.
For maritime transport, the end shipping companies can be reached out to directly, with the consolidation of companies and the efficient deployment of the latest technologies. Ship loaders are now included in digital platforms, making them more efficient and intuitive. In contrast, with the growth of companies selling straight to consumers, the number of goods in traditional distribution networks is dwindling, to increase their own transport and distribution networks. Conventional freight forwarders are adversely affected by these volumes.
When compared to the traditional freight forwarders, the new digital ones and their business models are quite distinct. The turmoil of meta platforms or platforms at the service of these new freight forwarding agencies is also intended to be a more advanced approach that streamlines the process of matching supply and demand.
A variety of players comprise the freight forwarding industry. But, most of the market’s revenue comes from the top 20 players, who account for over 50% of the overall industry.
Since the freight forwarding industry is on the rise steadily and there are a plethora of chances, the players should adopt technologies, turn out to be way too digitized and scale up the game and efficiency of their operations.
Maintaining a solid network worldwide is vital for companies. Since the market is quite competitive and seeing bigger transformations, the companies should create specialized solutions to enhance customer experience.
For the sake of diminishing charges and optimizing operational efficiency, companies are always under pressure. As a consequence of the investment alterations and expansions of the supply chains worldwide, global investors are more and more intrigued by the ASEAN Logistics industry’s mergers and acquisitions.
Logistics companies worldwide have been diversifying in the ASEAN area owing to the rise in business activities. As a result, investment chances for the industry have been on the rise correspondingly.
About DDU Express, a Freight Forwarding Company in Dubai
Over the years, DDU Express, one of the Top Logistics Companies in Dubai has pioneered in offering a secure and trusted delivery network in the domain of logistics and supply chain. DDU Express has spread its services to Commercial imports/exports, international courier, Door to door delivery, 3PL, Amazon FBA Prep, eCommerce fulfillment, and much more to meet the increasing demands of its booming customer base. The services extended by DDU Express are custom-made and accommodate the unique requirements of its assorted customer base.