Change is the one constant in the supply chain. Consumer and business demand has proven that the supply chain, while not immune from the effects of disruption, will always be in demand. That notion has never been truer than it seems than with the freight forwarding business industry in the biggest holiday season in history.
A wave of digital methods and platforms began to appear in the freight forwarding sector a few years ago. And now the logistics technologies that helped to improve efficiencies and build lean supply chains are back in the spotlight. These features are not just nice to have; they are now table stakes for launching new forwarder logistics services. With the arrival of the COVID-19 pandemic and the uprooting of classic methods and ideas, these new systems have been tested more than anyone could have imagined. The ultimate test for freight forwarding business platforms is here and now.
Common Barriers to Launching a Freight Forwarding Business
There are many systems and tools available within the freight transportation industry. For those embracing the freight forwarding model, there are specific barriers that need to be addressed, especially now considering the global upheaval of traditional models and methods.
According to Logistics Management, “In such a situation, container shipping’s “networked” profile is laid bare as the relationship between different ocean cargo container lines, container fleets, container terminals and land-side transport requires some degree of equilibrium.” Without insight and rapid booking capabilities, it’s impossible to determine what’s really happening and where loads/capacity lie.
Finding that equilibrium is not an easy task. It’s further complicated if startups don’t have the past industry experience to exercise caution. A few key obstacles to keep top of mind when launching a new forwarding business include:
- Limited contacts, especially early on, can put a severe limit on profit expectations over the first few years. This can also affect other efforts, such as customer acquisition and retention costs. Establishing reputation and building loyalty takes time.
- An inability to track freight efficiently remains a major obstacle for those starting a forwarding business.
- Failure to accurately track settlements in real-time and the lack of a streamlined method for securing payments may lead to cash flow problems.
- Poor performance measurement and a lack of data to analyze can turn into a blind-leading-the-blind type of scenario.
A Digital Freight Forwarding Platform Streamlines Launch
Digital processes are always superior to the archaic hassle of phone calls and even endless email threads. However, digital forwarding business advancements have turned the tables. Instead of relying on outdated systems and limited network connections, digital freight forwarders can tap the value of digital load boards and freight matching capabilities to streamline launch and begin booking loads on day one. That’s a genuine distinction in an age marred by flailing third-party service providers and shuttering freight businesses.
Added Benefits of Digital Resources During Launch
It’s essential for anyone entering the freight forwarding business to understand the scope of the industry and its impact on local, state, and global markets.
As explained by Boston Consulting Group, “Not surprisingly, venture capitalists find the [logistics] sector highly attractive. They poured more than $3.3 billion into digital shipping and logistics startups from 2012 to 2017. A considerable portion of this funding went to freight forwarding.” The amount has only continued to increase as the benefits of freight forwarding businesses become more prestigious. In fact, consider these top benefits of digital freight forwarding business software during launch or expansion:
- Less downtime and a quicker turnaround on overall ROI.
- Faster implementation of processes and changes with automated systems.
- Turnkey functionality allows for immediate implementation and use.
- Wide use tools and processes for self-managing and reporting of carriers.
- Improved performance measurement and better real-time data analysis.
- Less hassle with every aspect of the forwarding business.
Launch Your Freight Forwarding Business Faster With the Out-of-the-Box Features of Cargologik
A successful freight forwarding business depends on your ability to execute your go-to-market strategy. The best way to achieve that goal is to focus on tapping out-of-the-box, off-the-shelf digital freight forwarding solutions like Cargologik. Discover the tools and platform needed to get a freight forwarding business up and running by signing up for Cargologik online today.