January 15, 2020

The Future of Freight Forwarding centers on Customer Experience

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com
future of freight forwarding

Freight forwarding is a complex and high-stakes industry. Missteps in the documentation, waiting for a second too long to book a shipment, juggling countless communication channels with partners and carriers, and the current global trade environment make it difficult for forwarders to keep up and stay competitive – especially when operating with much of the traditional manual and analog approaches to the business. 

However, the future of freight forwarding is bright. It largely focuses on the forwarder advocating for and constantly improving how their shippers and partners interact with their organization. More specifically, embodying this approach by transitioning from a traditional, analog approach to a more digital one. Maintaining success in the future of freight forwarding depends on retaining this mindset, organizational culture, and building positive customer experiences. These experiences often include modern digital tools and solutions that improve end-user experiences and reduce costs through more  effective collaboration with carriers, shippers, and partners

What Are the Challenges of Freight Forwarding Today?

For the independent, small and mid-sized freight forwarders, preparing for the future begins with recognizing the challenges in the industry today. Such challenges include:

  • Handling the globalization of the supply chain. Strong growth in e-commerce and the proliferation of the internet continue to push the logistics boundaries of what’s possible – allowing for all supply chain members to better conduct day-to-day business. The Amazon Effect has created a new consumer paradigm that compels all businesses to ship faster while also trying to lower total costs to stay competitive.
  • The lack of available, easy-to-use-and-implement freight technology for independent forwarders tallows them to differentiate against peers and compete against bigger competitors.
  • An inability to quickly provide quotes and book shipments on behalf of their shipper customers.
  • Disjointed, and lengthy back and forth conversations and key document storing. Response time is more important than ever as m
  • Limited ability and significant enough volume to enforce contract terms with carriers.
  • Reluctance to embrace digital systems and collaborate with others within the industry. This includes the use of APIs where massive gains can be realized if only parties worked better together Instead, the “this is how we always do it,” mentality continues to dominate the logistics and shipping industry and its players.
  • The overall rising complexity of the freight forwarding and global logistics industry as shippers demand and expect more from their partners.

Complexity alone is not the only issue facing logistics today, reports Forbes:

Adding to the intense complexity, there are countless nonstandard documents in circulation worldwide, not to mention customs requirements vary from country to country and product to product. The result is an antiquated customer experience for businesses moving goods across the globe. With legacy freight forwarding processes, customers have had limited visibility and insight into the status of their critical and time-sensitive shipments as they travel from origin to destination. Additionally, freight transit times are unpredictable, and costs can easily spiral out of control. All of this causes frustration and sometimes even fiscal damage to their businesses.”

The Future of Freight Forwarding Enables Positive Customer Experiences

Take a moment to think about the cornerstone of any successful business today: the customer experience.  How often do you go back to a provider of a good or service who has not fulfilled your expectations?

Positive customer experience enables and promotes business continuity, but just one negative customer experience can render a thousand positive experiences meaningless. As Warren Buffet states, “It takes 20 years to build a reputation and five minutes to ruin it.”

When it comes to the clients of freight forwarders, they are generally quite savvy in understanding the need for digital transformation. They’re often providing a relevant product or service that’s in demand and embracing their modern, consumer mindset in moving those goods.  As shippers look to digitize their own business, they can quickly discern which freight forwarders that have not embraced digital solutions and kept up with the times. They want to do business with the companies that can similarly offer an unparalleled experience thanks to the benefits of enhanced service and collaboration with the use of technology.

If the forwarder does not show a similar commitment to their own customers like SaaS-based freight forwarding platforms, shippers preclude them from vendor selection and repeat, long-term business. Thus, forwarders who do not embrace digital tools to enhance the customer experiences and outcomes of their shipper customers will fail to compete. These forwarders behind the curve will continue to bleed revenue profit and will find it increasingly difficult to keep the lights on Eventually, the future of freight forwarding is one in which modern technology reduces the complexity of processes,  enhances compliance, and streamlines operations. It is incumbent upon the independent freight forwarder to embrace their shippers’ customer experience – the customer experience. 

According to a Research  & Markets survey of global freight forwarders, it’s not the quest of cost reduction, but rather a focus on innovation, i.e. the focus on digitization, that led to cost reductions and better customer experiences for their shipper customers:

“The drive to enhance customer experience is also leading innovation. The 2018 survey saw ‘reduction in costs’ equal with ‘customer experience’ in driving innovation, but this year the latter gained 30% of the vote, while cost reduction was key for 29% of companies. Interestingly, it was laggards, or poorly performing companies, that focused on cost reduction. Some 20% of companies, meanwhile, said they innovated to ensure a competitive advantage.”

How to Put the Customer at the Heart of Your Freight Forwarding Processes

The best path forward for forwarders looking to compete and improve customer experiences is creating consumer-centric freight forwarding processes with a focus on using innovative digital tools. After all, freight forwarders have a vested interest in building the best, long-term business-to-business relationships possible. 

To make things easier, freight forwarders should follow these freight forwarding best practices and tips to secure a stable future and center the focus on customer experience:

  1. Hold carriers accountable with data. It is difficult and cumbersome to manually capture and analyze data. Digital platforms for freight forwarders that help manage their business will allow for easier data analysis around carrier compliance. This key data improves relationships with carriers that are fact-based instead of anecdote or gut feelings.
  2. Rate with all carriers, not just the preferred list. When you are able to effectively rate the carrier universe as a forwarder, you’re presenting the best available options for shipper customers. Customers in all procurement situations want visibility into rates to make the best decisions for each shipment. The goal is to yield a positive experience as the shipper is armed with more confidence that eir shipments will arrive on time, damage-free, and at a price that fits the budget. Relatedly, keep in mind that if strong digital customer experience is in place, some shippers may be more willing to pay a premium for the forwarder’s services.
  3. Rethink the priorities of your customer, not the business. Utilizing digital platforms puts the customer at the heart of everything the forwarder does. From documents to freight communications, everything around the freight forwarding process is improved. The better one can advocate for their customer’s business, the higher the likelihood that the customer will be more loyal.
  4. Automate freight forwarding processes. Have you tried automating processes in freight without the use of some sort of freight technology? It’s nearly impossible. Automating processes not only saves time, but it also reduces errors, overhead, and allows the forwarder to put the focus on the strategies that drive enhanced customer experiences.
  5. Put out the fires before they start. When a freight forwarder is proactive, the customer feels like they have the best advocate and a true partner. The added benefit of utilizing digital tools for freight forwarding is that the technology is intuitive, exposing the key trends and analytics critical to your business, i.e. better awareness outcomes or providing real-time alerts of shipment status while the shipment is in transit. A proactive forwarder is one that proves that they are looking out for their client.
  6. Make quoting easy-peasy. With the use of APIs to get instant quotes from available carriers, quoting is a less lengthy, manual process and a more enjoyable, simple activity. Nobody has time to wait for hours for a quote. Shippers need to give their customers accurate total pricing, including freight charges and when a forwarder can aid a shipper in accomplishing those goals, the shipper’s experience is enhanced.

Build Your Customer-Centric Strategy to Win the Future of Freight Forwarding 

Consumer-centric strategies are critical to modern business, and freight forwarders must evolve their existing operations to streamline operations and optimize workflows. Fortunately, new startups, such as CargoLogik, are working to develop digital tools via their platform helps deliver and restore competitive advantages and help more freight forwarders thrive in the digital age. Begin building your customer-centric freight forwarding processes by partnering with CargoLogik and utilizing our freight forwarding management software platform. Join the private beta queue by visiting CargoLogik online today.

To get the most out of our platform, book your free, personalized training call with our Success Team

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