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FREIGHT FORWARDERS: MANAGING THE STORM WITH TECHNOLOGY

Agilityand the abilityto adaptto difcultcircumstances remains the No 1 attribute forfreightforwarders—butthe pandemicputthemto the test Today,the leading forwarders are investing intechnologythatnotonlyincreases efciencybutalso enhances operations and creates newglobalsolutions

The globalCOVID-19 pandemichas created a climate of uncertainlyforthe freightforwarding industryand a perfectstormof challenges, including skyrocketing freightrates due to capacitycrunches insupplychainnetworks;escalating demand forconsumergoods and ecommerce;mounting portcongestionand portclosures;increasing containershortages due,inpart,to abandoned cargo;and continuing factors suchas illness among portand terminaloperators,bad weather,and the SuezCanalbeing blocked fornearlya week.

“Simultaneously,companies are replenishing theirinventories,whichis overwhelming the oceanfreightmarketand creating a shortage of containers,”says Cathy Morrow Roberson,presidentof he consulting rmLogistics Trends andInsight “Trying to track downthose containers,getthemback to Asia,and getthemlled and to naldestinationis taking time”

Agilityand the abilityto adaptto difcultcircumstances remains the No 1 attribute forfreightforwarders—butthe pandemicputthemto the test Today,the leading forwarders are investing intechnologythatnotonlyincreases efciencybutalso enhances operations and creates newglobalsolutions

The situationis notanybetterforairfreight Mostpassengeraircraft,whichrepresents nearly50% of bellycapacity,remaingrounded “It’s returning,butnotfastenough,”comments Roberson This has resulted ina severe shortage aircargo capacity,highshipping rates,and pressure to nd space,including onchartered aircraft Meanwhile,the relationship betweenthe giantforwarders and a consolidated shipping industryhas also beencalled into question “Forwarders have found itdifcultto provide a consistentservice to theircustomers and have blamed the carriers formanyof the problems,”says JonManners-Bell,chief executive of London-based freightanalystrm Transport Intelligence(Ti)

Allindicators pointto continued challenges throughout2021;however,Manners-Bellremains optimisticand maintains the marketfor forwarders is verypositive “Demand is exceptionallystrong inNorthAmerica and Europe,”he says “Althoughthere have beensome signs thatforwarders’margins have beensqueezed byhighcarrierrates and shipperpushback,the lack of airand sea capacityhas meantthatthose forwarders withthe bestaccess to capacityhave prospered”

Inthe meantime,Panjiva researchindicates thatthe top 20 forwarders have builttheirmarketshare as cargo owners shiftto largerrms withmore exible solutions “Intotal,the top 20 forwarders’volumes climbed 463% year-over-yearinJanuaryand February2021 combined,thoughtheiraggregate share of totalUS inbound shipments was stillonly203%,”reports Panjiva

The fourthquarterof 2020 was particularlygood nanciallyforthe large freightforwarders who buybulk spaces fromcarriers yearly, thensellthemto customers throughoutthe year

Forexample,XPO Logistics revenues increased some 128% during the fourthquarterof 2020 to $467 billion—the highesteverof any quarterinits history Expeditors Internationalreported a record 55% increase to $32 billionduring thatquartercompared to the same period 2019,while CH Robinsonreported totalrevenues increased 199% to $45 billion Techdevelopments

Tech Developments

Agilityand the abilityto adaptto difcultcircumstances remains the No 1 attribute forfreightforwarders The pandemichas putthemto the test

“Earlyoninthe pandemic,forwarders leveraged theirglobalvolume and years of building carrierrelationships to getcustomers’ containers onboard ships leaving ports inAsia forNorthAmerica and Europe,despite facing rising containerequipmentshortages, uncertaindemand,and unreliable shipping schedules,”says EvanArmstrong,presidentof the third-partylogistics analystrmArmstrong & Associates Inc “Freightforwarders also started converting passengeraircraftinto cargo-carrying aircraft,expanding use of charter ights and added orchanged trade lane routes”

Forwarders are also increasinglyinvesting intechnologythatnotonlyincreases efciencies butenhances operations and creates new solutions

“Digitalizationis one of them,and the pandemicjustcranked thatup,”says Roberson “Digitalsolutions help increase the real-time global visibilityof transportservices across end-to-end supplychains,and smartersolutions keep up withconsistentchanges”

Today,mostlarge freightforwarders have customerportals thataggregate huge sums of data forenhanced orderand shipmentvisibility, improved shipmentplanning and inventorymanagement,predictive analytics,and standardized systems and processes “This helps shippers planforsupplychaindisruptions and changes incarriersupply,whichhas beenveryvolatile throughoutthe pandemic,”says

Armstrong

One example is CH Robinsons Navisphere Purchase OrderManagement(POM),whichsaw13 billiondigitaltransactions

in2020

“Whenthe globalpandemicsuddenlyhit,ourcustomers were able to stayconnected withtheirvendors ina remote working environment withNavisphere POM,”says Mike Short,presidentof globalforwarding atCH Robinson “Ourcustomers leveraged these capabilities to proactivelyminimize the impactof pandemic-related and otherdisruptions ontheirsupplychains and to keep stakeholders informed on status,risk,cause,and responsibility”

Thatabilityto track and trace shipments also helps shippers mitigate the impactof bullwhip effects inthe supplychain “Greatervisibility of potentialdisruptions upstreamand downstreamallows companies to speed up ordivertsome shipments as wellas quicklyresolve issues withsuppliers and carriers,”says Manners-Bell

Mapping outsuppliernetworks is also essentialto manage the potentialrisks to productionand deliveryschedules “Systems that provide supplychainvisibilityand inventoryvelocity,notto mentionacceleration,create the necessaryagilityto mitigate the impacts of pandemicdisruptionto the market,”adds Manners-Bell

Anexample is Kuehne+ Nagel’s newSeaExplorerfunctionalitythatwas introduced during the heightof the pandemicto help mitigate disruptions “Itprovides users a single,digitalplatformto nd the bestoptionforcontainershipping needs,including transparencyon alternative routings and sailings,”says Armstrong

Using articialintelligence and data mining,SeaExplorerprovides shippers withrealisticlead times forroutings,service updates,up-todate sailing schedules,and alternative departures forcanceled sailings Italso provides detailed informationonthe CO2 emissions of eachroute

DSVPanalpina introduced newtrack-and-trace capabilities and also implemented newroboticstorage and retrievalsystems inits warehouses to supporte-commerce operations

IncollaborationwithVerity,DSVPanalpina is implementing anautonomous drone systemto bettermanage inventoryatseveral warehouse operations Operating mainlyatnight,the drone systemcanscanbarcodes withouthumaninteractionand detectif pallet positions are emptyoroccupied This supports cycle counting and overallinventorymanagement

InMay2020, Hellmann WorldwideLogistics announced its rolloutof CargoWise,the integrated single-platformtransportation management system (TMS)fromWiseTechGlobal Itwillbe implemented forallairand sea freightoperations across its network.“The goalis to enhance operationalprocesses bystandardizing systems and databases and enabling more efcientresource usage across the supplychain,”says Armstrong

Following the completionof a pilotphase,HellmannwillimplementCargoWise across 42 countries including the US,Australia, Germany,UK,India,SouthKorea,SouthAfrica and Hong Kong Hellmannis also deploying a digitalwarehouse managementsystemfora long-standing customerinBor,CzechRepublic,thatleverages articialintelligence to bettermanage the customer’s materialows

GEODIS has developed its ownnal-mile retail digital transportation management platform dubbed GEODIS City Delivery Itenables retailers to manage the deliveryof goods suchas apparel,healthand personalcare products,and high-techmerchandise directlyto US consumers fromtheirclosestretailstore Itinterfaces withGEODIS’mobile driverapplication, GEODIS Zipline,to provide shipmentstatus updates and information

DHL Global Forwardingis upgrading its TMSto speed up and simplifyprocesses,increase responsiveness,eliminate paper,and operate more efciently It’s applying incrementaltechnologyinnovations inits operations,suchas scanners and sensors,to increase speed and accuracy,and add customertransparency The companyis piloting the use of articialintelligence (AI) and machine learning (ML) to improve route and capacityplanning,and using newcapabilities suchas chatbots,virtualreality,myDHLi,and a data analytics platformto improve customerexperience and employee training

DavidGoldberg,CEO,DHL GlobalForwarding US,describes myDHLi as the onlyfullyintegrated online platformforfreightforwarding customers “myDHLiprovides completelytransparentmanagementof freightrates,offers,transportmodes,carbonemissions,and all otherrelevantshipmentdata,”he says “The platformoffers socialmedia functions like followand share Inaddition,relevantinformation canbe accessed across organizations and trading partners Plus,itoffers online services forfullshipmentvisibilityand controlinone platform”

CEVA Logistics beganits digitalizationprocesses priorto the pandemicand is focusing onmyCEVA,a customer-facing platformthat offers real-time quoting and booking,end-to-end visibility,documentsharing and best-in-class digitalcustomerservice

“Byexpediting some of ourinitiatives and leveraging ourestablished digitalexpertise,we were able to adjustto the changing environmentto deliverresponsive logistics solutions,”says Shawn Stewart,presidentand managing directorof NorthAmerica forCEVA Logistics “Throughtechnology,we have beenable to provide these newservice offerings to ourcustomers,reduce labor-intensive processes,and collaborate bothinternallyand externally”

The myCEVAplatformmakes itpossible forCEVAto offervalue-added services like customs clearance,insurance,and environmentally friendlyoptions “Currentlyavailable foroceanfreight,we envisionthis platformbeing a one-stop shop forallourcustomers including air, ground,and contractlogistics bythe end of 2021,”says Stewart

Formanyforwarders,however,the challenge is howto advance intechnologywithoutlosing the personaltouch To address this issue, CEVALogistics has invested incustomerrelationship management(CRM) software to provide anomni-channelcustomerservice platform to unifyallcustomercommunications into a single system—fromtraditionalphone and e-mailto chatand socialfeeds

“We have also invested ina Cloud contactcenterthatleverages ourexisting voice channels to intelligentlydelivercustomer communications to the rightperson,atthe righttime,the rsttime,”says Stewart “Ourgoalis to deliverthe exactanswers rightaway”

New Chapters

While manyfreightforwarders nowsteerawayfrombeing one-stop logistics operators,transportationproviders like CMACGM and Maersk are venturing into the business Maersk has acquired customs brokers and invested indigitaltools like Loadsmartand platforms suchas Maersk Flowand Twill

Large inefciencies stillexistinthe air cargo industry,whichis stilldependentonpaper-based processes However,McKinsey&Co indicates thataircarriers could capture 15% of the forwarding marketby2030 byintroducing digitalizationinto theirnetworks and

capturing some e-commerce business

“Carriers willneed to have clearvalue propositions to succeed because forwarders provide services beyond transport,suchas end-toend offerings and tailored solutions forcustomers,”says Mark Williams,associate partneratMcKinsey&Co

Butthere are hurdles forcarriers inthis sector,adds Williams “Forwarders don’tidlysitby,and Amazonis fullin”

PostCredit: Logistic Management