Recently I met an 'aged' forwarder, celebrating its 40th anniversary in the forwarding business. Being over 60 he was proud he was still able to keep up with the latest developments. When I asked him what these latest developments were, he replied with; the electronic AirWayBill was a game-changer as well the move from the typewriter to the word-processor to finally forwarding software. Where he did admit he is using his software still as an automated and more intelligent typewriter.
Since I liked him I congratulated him with his achievement, but he also triggered my mind. If this is all the innovation he can think of in the recent 40 years, he is missing a lot. When one looks to other disciplines in the Supply Chain a lot has changed. In the 90's we did see a huge injection in technology in Warehouse and Storage solutions. TMS and in particular Road Freight transformed themselves in the 00's by using tools focused on optimizations and cost-management. They got rid of the billing machines they were in the past and focused on effective loads, optimized lanes all to increase their scarce margins.
But forwarding being regulated by the airlines and the carriers as well their global reach should be the ideal environment to enable technology to make life easier and to increase the margins. But the forwarding business is still very traditional. There is a low barrier to entry. All you need is a phone, a typewriter and good relations. Very fragmented and also a low barrier to exit. Forwarding companies come and go. Not the right climate to do expensive investments in technology.
But does technology today still needs expensive investments? With the current acceptance of Cloud solutions, technology has become secondary. There is now an affordable way to sign up for sophisticated solutions that not only help to better organize and structure its business, but does also help to connect people so they can collaborate more effectively. Internet enables companies to connect people, processes and things.
With the generation Y already arrived and generation Z about to be entering the labour market, there will be young professionals that are already depending and using technology for life and thus will request the same in their jobs.
There are also the manufacturers and retailers that will demand pro-active alerting and updates on exceptions. All driven by the methods used in other modalities. Although the forwarder thinks there is a big difference between Road (LTL, Express) and Air/Sea, the customer does not care. He just wants to ship something from A to B, regardless the mode. He is interested in the costs and the quality, not the specifics of a certain mode.
Ok, technology, right. But what kind of technology solution can be useful today then? Nowadays there are platforms available in the cloud that act as Control Towers. Offering possibilities to the forwarders to give the shippers online access to post their PO-information and publish their documents needed for transport and trade like the Commercial Invoice and others. Every action taken by the forwarder can be tracked and followed by the shipper. At the destination side, the destination agent will update their actions and both the origin forwarder as well as the shipper are getting their updates seamlessly. Any documents used, like the signed POD will also be uploaded by the destination agent and immediately made available to the origin forwarder and the shipper.
Just a small and simple example how technology can make life easier in the forwarding business, there are many others also available. But the forwarders themselves need to wake up and need to start realising that it is time to change. Innovation is already out there, adopt and use it. Those who get this message, will differentiate themselves, create more loyalty amongst their customer base and will attract more business.