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FREIGHT FORWARDING

4 Benefits of Digitalization for Freight Forwarders

Date Jul 20th, 2023

Time 7 min read

Digitalization is rapidly reshaping the freight forwarding industry, offering numerous benefits to enhance efficiency, sustainability, visibility and customer experience.

Here are four clear benefits it can provide and how and why they are important.

1. Reduce manual processes

Digitalization is crucial to reducing the high number of time-consuming and error-prone manual processes in freight forwarding. This lack of automation typically drives up costs for freight forwarders while the adoption of digitized processes can lead to significant reductions.

“Our operations people had to go to the website of the shipping lines and airlines and then inform our customers. It was time-consuming and, moreover, the information wasn’t particularly accurate.” Lionel Tristan, General Manager at Fracht France and President of the West African Fracht Offices.

The Boston Consulting Group estimates that the automation of repetitive operational tasks, which reduces errors and improves efficiency, can potentially cut costs by up to 40%. By embracing digitalization, freight forwarders can streamline their operations, enhance their competitiveness, and focus their efforts on offering value-added services to customers.

2. Streamline activities

The Cooperative Logistics Network, which represents freight forwarders globally, says enhancing the customer experience should be a top priority. Digitalization is an excellent way to do this because it allows customers to search, book, amend and track bookings easily. Automation can also be used to accelerate the quotation process, providing customers with estimates almost immediately. This value-added service can significantly improve customer experience. Despite this, Accenture reports that investment in customer-facing automation is currently the lowest priority in the industry.

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3. Offer greener routes

With transportation activities responsible for 17% of global greenhouse gas emissions, sustainability is an increasingly important issue.

According to an Accenture study, 93% of logistics companies are actively seeking to integrate sustainable and green logistics capabilities into their service offerings. This aligns with the values of their customers, with 47% of logistics companies prioritizing the need to operate in a sustainable manner in order to meet customer demands. Sustainability is not just a matter of environmental responsibility, it is a customer requirement.

Digitalization offers a potential solution by enabling freight forwarders the ability to monitor emissions and identify where they can reduce them. Precise shipping routes that consider things such as transhipments, the weight of goods, fuel types and other factors, can help forwarders to make better decisions, and to optimize their operations for more environmentally friendly outcomes.

4. Anticipate and manage delays

Real-time tracking and monitoring of shipments is an increasingly important factor for freight forwarders and their customers, yet it remains a challenge for many logistics providers. Being able to anticipate and respond to potential disruptions like port congestion or adverse weather conditions before they occur requires sophisticated IT and operational expertise, which can be a significant competitive advantage.

Customers now demand authentic and visual data to monitor their shipments, identify supply-chain bottlenecks, and reduce avoidable costs such as demurrage and detention fees. Having access to high-quality, near real-time data, tracking, and monitoring can facilitate better communication and collaboration, making it easier to plan and complete forwarding tasks. Two out of three logistics professionals expect better visibility into shipment status and improved overall efficiency from their suppliers.

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