Freight forwarders have come a long way over the past three years to adopt digital processes in anticipation of the e-commerce revolution, but for those companies that haven’t gone digital yet, now is the time to start thinking about it. A recent study by Forrester Research analysts for logistics company Freightos found that some freight carriers will have to go out of business in the next decade if they don’t focus on and respond to immediate customer needs.
As today’s technologies give shippers greater choice and higher expectations for information exchange systems and on-demand delivery of information, logistics service providers without the appropriate capabilities will have a hard time competing with more advanced logistics companies, and accordingly, they will “in the next ten years are more likely to be critically endangered,” said Nigel Fenwick, vice president and principal analyst at Forrester Research.
“And even if you notice this trend, you may not have enough time to save your company,” he added.
Forrester analysts assessed the online performance of 20 of the world’s largest logistics companies, determining the penetration rate and extent to which companies adopt digital technologies for process automation. Analysts acted as shippers for a company in the fast-growing US e-commerce sector and made inquiries about terms for door-to-door LCL shipping from a major city in China to a major city in the US.
The delivery of goods from Ukraine to China and the USA, from China, the USA to Ukraine is successfully carried out by the transport and forwarding company Militzer & Muench Ukraine GmbH.
Over the past three years, freight carriers have taken their companies digitalization from zero to 25 percent, according to the study. In addition, three of the top 20 freight forwarding companies — DHL Global Forwarding, Kuehne + Nagel and UPS — are now giving customers instant door-to-door air freight shipping rates, and two more companies are ready to providing similar services. Experts say that in the field of air transport, more significant progress has been made in the field of digitalization of freight transport than in maritime transport.
However, analysts noted that carriers’ inability to meet customer expectations is holding them back. While business-to-business digitalization has taken off at a rapid pace, only 15 of the 20 freight carriers surveyed had a feedback form on their website, 9 of them provided an express form or a custom quote request form — three more than last year. The other 6 request forms were too general. Four companies offered templates, while the remaining five companies provided only their contact details, namely email addresses.
Five transport and logistics companies reported that they still use manual calculations, and on average they need 57 hours to respond to a cost request, which is an eternity in an industry that requires real-time service. 72% of carriers surveyed were unable to provide estimates at all. Errors in the application of manual calculations were widespread. “One carrier erroneously listed air freight instead of LCL, and two carriers omitted to provide ancillary services,” the study says. The gap in prices was 58%, which indicates the need to ensure full transparency of the process.
The results of the annual study of the implementation of digital technologies in the processes of logistics companies are positive, but, according to experts, many freight carriers still have a long way to go in this area on the path of progress.