March 4, 2021

How Independent Players Can Close the Tech Gap With Large Forwarders

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
large forwarders

The freight and shipping industry has always been a fairly competitive niche. With the challenges 2020 has presented to forwarding businesses, the past year only increased the focus on small and large forwarders. The overall competitiveness between forwarders of differing sizes increased and forced the need for automation. And in a sense, it’s imperative to remember that forwarders maintain characteristics like brokers, which have experienced similar problems in the past year. According to FreightWaves, “Digital or not, brokerages rely on people. But the growth of digital freight-matching (DFM) platforms… is forcing small to midsize brokers to compete by starting their own technology programs and rethinking traditional human labor. But considering that DFM [digital freight matching] platforms can flood $200 million into their technology, competing is a daunting prospect for smaller firms.” For smaller forwarders, the real independent players in global logistics, competing with the large forwarders can seem nearly impossible. That is true unless a company takes a few proactive steps, so here are a few ways independent players can close the gap with the help of new advances in technology.

Reduce IT Costs With Digital Freight Forwarding and Innovations

Small freight forwarders have one decisive advantage over large forwarders and are the ability and freedom to invest more time into their relationship with customers. The individual employee often carried a more comprehensive range of training, education, and experience than what is seen with large forwarder employees. With each member of the closely-knit team being able to do more and bring more to the table, it allows more to be done with fewer people. And that allows for more affordable upgrades and innovations to be implemented across a smaller chain than large forwarders. And according to Zipline Logistics, “Even Forbes mentioned that the logistics and transport industry is under pressure to outperform each other as demands and expectations rise in terms of deliveries. The industry is said to be in the process of transformation.  It seems to be a golden era for the freight forwarding and logistics industry. Yes, there is a strong demand and pressure to perform and come up with astounding results. The industry is seen to expand to fulfill the demand in the shipping and freight industry, but the challenge here right now is how to keep up with the rising demand and how to come up with better offers than the competition.” And that will depend on using data and keeping costs under control. 

Lower the Time Needed to Book Shipments and Manage Loads

With large forwarders, receiving, processing, loading, finalizing, ad shipping orders can be quite involved. Because of so many people being in the chain and being involved, every step takes longer and requires more people to complete. Employees at small freight forwarders can enjoy benefits not found in larger staffed companies, including greater autonomy, personal control, improved analytics, and increased knowledge of their departments. With fewer people in the company and the smaller departments, employees at small forwarding companies have greater control and more specialized experience to manage shipments. This means things can move faster than most large forwarders because fewer people need to be involved.

Prioritize Loads to Maximize Profitability Over Large Forwarders

Automation eliminates awkward human-based emotions and lowers instances of error and processing issues. Such a focus makes it easier to prioritize loads, so the most profitable and most logical loads are selected, and loads are set up in the most efficient manner possible. While large forwarders dominate much of the industry, the move towards smaller independent players continues. The shift allows smaller forwarders to gain a competitive advantage with load control, prioritization, and profitability.

Get Expert Help to Move Towards Closing the Tech Gap

A skilled and experienced forwarder management team can help independent players prepare for what the new year will bring. And part of that means having access to digital freight matching and proactive, data-driven management platforms. See how easy it can be to get ahead of the large forwarders, and close the tech gap to gain the upper hand by signing up with Cargologik today. 

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