Why Is There the Perception that Freight Forwarders Are Slow to Adapt to Technology?
It’s common to read about how the entire global supply chain is behind the times when it comes to using technology. It’s as if everyone is still relying only on phone calls and faxes to get their jobs done.
While this isn’t true for the whole industry, there is unquestionably a big part of it playing catch up when it comes to taking advantage of what logistics technology can offer. These are companies either resistant to the idea of change or unsure of how to add automation and digitization to their operations.
It is, however, important to not point fingers at individual forwarders and other LSPs (Logistics Services Providers) for being completely at fault for creating the perception. In many ways this is a broader reflection on the industry. After all, it’s the whole of logistics and shipping that has allowed itself to operate with so many manual processes for so long.
It’s the industry itself (LSPs and shippers alike) that set the expectations for the service forwarders provide. If customers had demanded more, forwarders would have been more compelled to make changes like adding technology. In other words, the pain felt by any of the players from a lack of technology was not great enough to inspire change for everyone.
But this was the past.
It’s apparent that the industry has reached a tipping point, and companies not keeping up with technology and modern ways of operating are getting left behind. Here’s a few of the ways how.
First, forwarders and LSPs leveraging technology are always more efficient and can offer better pricing to their customers. Rate and other information flows through their systems and processes better, and as a result they have less operating costs. Technology, like interarc.co for example, eliminates the need to rekey important shipment information. This saves time and eliminates errors. It also creates a consistent, repeatable workflow that helps speed up key shipment data capture and makes sharing easier.
Customers of forwarders who use technology are happier too. They benefit from the lower freight rates those forwarders are able to offer, while also having access to faster and more accurate data (like track and trace information, and reporting). From the customer’s perspective, these forwarders are simply better to do business with.
Carriers prefer working with LSPs using technology too. For them, communication is smoother and shipment coordination and paperwork is more reliable. These carriers can in turn give these forwarders and their customers preferential service and treatment, not to mention the better rates.
In the end, technology helps avoid many of the inevitable problems that are simply part of logistics, or at least gets them resolved faster. For example, digitizing paperwork (such as Bills of Lading or customs documentation) makes it easier to share while maintaining better accuracy. And, when paperwork's lost it gets replaced faster.
The sad state of logistics when it comes to technology is often over-stated but there’s no question there is room for improvement. Forwarders and other LSPs are now seeing technology as a requirement of doing business, and not just a nice to have.