A shipper may choose to contract independently with the truckload carrier, a customs broker and an expeditor for emergencies — in fact, many do — but the forwarder pledges to take on the burden otherwise. A supply chain manager must worry about S&OP and excess inventory, why should they have to file customs documents, too?
Yet the emergence of new, convenience-driven technologies has raised a troubling question: If the process becomes more efficient, will the forwarders’ job become obsolete?
Why freight forwarders are not threatened by automation
The answer to that question is, not anytime soon, both traditional and next-generation forwarders told Supply Chain Dive. At the end of the day forwarding is a service, not a task.
Take a typical supply chain: An automotive manufacturer based in Detroit may have buyers in Mexico, Canada and Japan. Without a forwarder, in each case the manufacturer would have to determine the best intermodal route to send shipments to each country:
Under what circumstances would air freight make more sense?Should the shipper send the shipment by rail to Seattle or Los Angeles?Would it make sense to truck the goods, and if so, which carrier could provide the best rate?When a crisis strikes, how can the shipper ensure production continues?
Adding to that, questions of contracting versus spot rates, customs filing for each good and the need to ensure pickup and delivery cause the job to quickly become overwhelming.
Until technology can offer the same level of customer service and relationships, freight forwarders will not bat an eye
Yet the freight forwarder deals with these questions on a daily basis, so when the shipper calls, answers and recommendations are available. In addition, they may have divisions for pursuing better contract rates due to long-standing relationships with carriers, or for ensuring customs compliance is up to date.If shippers have trusted freight forwarders for decades, it is not only because they can get a product from point A to point B, but because they can dedicate to doing it exceptionally well. This in turn frees the shipper up to manage more complex, strategic issues. Until technology can offer the same level of customer service and relationships, freight forwarders will not bat an eye.
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How technology will optimize the forwarding process
If the forwarder is not at risk of being replaced, then what’s all the buzz around the new platforms, marketplaces and uber-for-X apps constantly promising to disrupt the industry? Conversations with these companies reveal it is not the freight forwarder’s role they are looking to disrupt, but the forwarding process altogether. In fact, some so-called next-generation forwarders are looking to sell software to forwarders themselves.
The reason? The forwarding process has yet to reach the digital age. A recent survey by online freight-marketplace provider Freightos revealed that just 1 of the top 20 global freight forwarders could provide an instant quote online for an anonymous prospective client.
Antiquated systems within the relationship business has created significant market inefficiencies due to a lack of transparency and access. Why would the spot market rate be lower than a contract rate? How would a shipper know?
From load boards to Big Data-enabled route or rate calculators, new technologies promise to improve access, reduce delays and increase visibility for those who choose to use it.
