Freight Forwarder Trends: Top 5 Challenges Facing Small to Medium Forwarders Today

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Freight forwarder trends track innovation and digitalization. While the freight forwarding industry moves toward digitalization, problems in management remain. These problems are the result of a not fully understanding how a modern freight forwarder still operates behind the scenes of a digital freight forwarding platform. 

Even if the customer completes the transaction automatically, the forwarder still plays a role, explains Supply Chain Dive:

“Yet the freight forwarding role doesn’t go away just by using an online platform. “You still have to have a freight forwarder doing the work behind the scenes, arranging the ocean freight, trucking, and customs clearance. The online software companies are the front end, the customer-facing software to make the process easier, but the freight forwarders are still in the background.”

To further illustrate the facts, consider the top five freight forwarder trends and challenges facing small to medium forwarders today.

1. Freight Forwarder Trends Include Higher Costs of Forwarding

The first of the top freight forwarder challenges to address surrounds the continuous increase of the costs of freight forwarding services in the global economy. As explained by Boss Magazine:

“The USD remains the primary measure of freight forwarding rates, and it affects the freight rates as they might change at any time. Not only the prices of the freight forwarding services are impacted, but it also affects the customers as the price of goods increases. Also, when expensive payment methods are used like bank transfers, they involve hefty fees that are added to the total expense.” 

Meanwhile, disruptions to economies of scale always trickle down back to the small and medium businesses, including freight forwarders. It is clear that independent forwarders need a way to control total spend without sacrificing service.

2. Container Capacity Remains a Problem

Another related issue is around container capacity. While the industry recovered from the capacity crunches of the last decade, new disruptions have come to light. Container capacity, while available, lacks available sailings, and even public policies threaten to limit available cargo transport between international borders. However, effective management of capacity through real-time monitoring and updating of freight forwarder trends and rates can help provide a hedge against failure.

3. Commoditization of Freight Forwarding Makes It Hard to Stand Apart From Other Forwarders

As companies around the globe turned to technology to improve freight management, freight forwarders have faced a tougher challenge in gaining and retaining customers. After all, what good is a forwarder if companies can do the process themselves? So, the only solution lies in working with forwarders that offer a better customer service experience and have the capabilities to back up technology with their people.

4. Unforeseen Disruptions to Trade Cause New Challenges

The fourth challenge is the risk of unforeseen disruptions. Some might argue all disruptions have warning signs, and it is up to the company to make the decision to protect assets against disruption. However, even with planning, sudden changes in public policy or other Acts of God may lead to limited resource availability and even the need to rethink workforce distribution. Again, small and medium forwarders must rely on technology to augment their capabilities and overcome disruptions in real-time.

5. Staffing Shortages and Retention Continue to Undermine Performance

Last, staffing shortages and retention of employees, or the lack thereof, undermine the performance and success of smaller forwarders. With the modern freight forwarder trends focused on technology and its use, it’s easy to think of people as the weakest link. 

Yet, technology can help forwarders augment operations to remote locations, avoiding the risk of employees spreading pathogens, not to mention lowering overhead costs along the way. Moreover, technology and supportive systems give small and medium forwarders the ability to rapidly augment staff and leverage instant quoting capabilities to gain more clients, avoid losses, and build value.

Overcome the Obstacles With a Platform That Addresses the Leading Issues in Freight Forwarder Trends

The technologies in question that embrace the top freight forwarder trends allow small and mid-sized forwarders to maintain scalability, unlock faster quoting, book more shipments, and achieve stronger profits. Of course, finding the right technology is another process, and building it in-house is troublesome and laden with risk. Instead, consider partnering with a proven forwarder platform vendor, such as Cargologik. 

Head over to our website to learn more and reach out to learn more.

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