Will technology kill the freight forwarder?

Is supply chain technology advancing
faster than freight forwarders can keep
up?
New online forwarding e-business
models – that could change the way
companies buy international shipping
services – are being developed, leading
to fears that freight forwarders may be
replaced by the freight equivalent of
travel booking sites such as Expedia,
according to a new Drewry Supply
Chain Advisers White Paper.
E-commerce giant Amazon has
already filed as a non-vessel operating
common carrier (NVOCC) and global
trade platform, Alibaba, has announced
a US$16-billion investment in its supply
chain.
Drewry associate, Philippe
Salles, says these developments for
both established and new freight
forwarding companies are “wide and
varied”, presenting both threats and
opportunities but certainly forcing the
need for change.
But, he adds, there is confidence
amongst logistics decision makers
and freight forwarders about the
continuing role of forwarders and third
party logistics (3PL) service providers.
“There is also some healthy scepticism
about new entrants to the market
offering logistics booking platforms as
international freight is not as simple as
booking a one-off plane ticket or hotel
stay,” says Salles.
He agrees that freight forwarding
requires trust, orchestration and
troubleshooting and that functions such
as Customs and compliance remain
complex and sensitive issues but warns
forwarders against complacency, noting
that change is inevitable.
“Shippers expect a more agile supply
chain to meet the new ‘on-demand
economy,’ with shorter contracts and
spot rate requests,” he comments, noting
that this trend has been encouraged by
the current freight rate volatility.
Salles points out that another
development that is forcing change is
the rise of cross-border e-commerce.
“The cross-border sector is estimated to
have reached 15% of global e-commerce.
Shippers can sell to their overseas or
regional buyers with built-in online
freight services powered by independent
forwarding platforms or by forwarders
as part of their e-commerce suite.”
According to Salles, transactional
forwarding will move further into
commoditisation. “And there is no
future for complex pricing models.”