By 2023, one-fifth cargo will be booked online globally
If the freight forwarders do not prove to be agile in their adoption of digital forwarding, they will rapidly lose customers who are seeking a range of services including visibility, quotation and easy booking which traditional forwarders cannot provide, Global Freight Forwarding 2019 report has cautioned.
A wave of digital disruption has already hit the freight forwarding market. Traditional forwarders have no option but to digitise as digital forwarding platforms are gaining traction in the global freight forwarding market.
The conclusion of the report is supported by an extensive market-wide survey carried out for the report, which found that not only had 49 per cent of participating shippers used an online forwarding platform, but also that respondents expect nearly a fifth (18.7 per cent) of all their volumes to be booked/shipped through such a platform by 2023.
As the market is still witnessing its ups and downs, digitisation has allowed ease for customers and service providers who can choose from a vast range of forwarding options. These options are available across the globe from online booking and quotation through to visibility tools and control towers.
The report says in the developing nations, the change expected is to yet to arrive. The overall landscape is broadly similar to that in the previous ten years, even though the technology has significantly changed in the freight forwarding market.
“Perhaps the most salient characteristic of the present freight forwarding market is that it has not seen a greater level of change. Markets and technologies have both developed significantly, but the overall landscape is broadly similar to that in the previous ten years and there appears to be little drive within the sector to change things fundamentally.”Thomas Cullen, co-author of Global Freight Forwarding 2019 Report
Freight forwarding industry has long been plagued by two major issues: lacklustre customer experience and lengthy manual processes. Tech-enabled forwarders could turn into drivers for change in the global forwarding market, the report finds. The question still remains as to what extent the online marketplaces, booking platforms and digital forwarders will fundamentally change the market’s landscape.
“Survey results show that, currently, shippers are making use of the more basic services provided by online forwarding platforms, such as booking and requesting quotes. While this indicates that online platforms aren’t yet widely used to process more complex tasks, it isn’t to say that their technology won’t advance and offer shippers more sophisticated visibility tools and value-added services.”Viki Keckarovska, co-author, Global Freight Forwarding 2019 Report
Global Freight Forwarding 2019 also examines the market size and growth rates, concluding that, in real terms, the global forwarding market expanded 3.9 per cent in 2018. Although this is down from 8.0 per cent in 2017, it still represents something of a high point – excluding 2017. This was the fastest growth rate since 2010.
After a bumper year in 2017, 2018’s growth rate was the result of rebalancing between inventories and demand as shippers were again more able to opt for sea freight services over air services. Growth during 2018 in the global air freight market was 3.8 per cent, while in sea freight the expansion totalled 4.1 per cent.