Digital transformation permeates all aspects of supply chain management and transportation. And for freight forwarders, the proper use of platforms and freight forwarding technology allows companies to do more with less, lower barriers to efficiency, and secure more bookings with fewer tender rejections.
It all trains the attention of shareholders in building a business case for technology in freight forwarding.
And as reported by Eric Johnson of JOC.com, “To remain relevant in a fast-changing freight environment, global freight forwarders need to use technology as a means to drive business process changes and reduce fixed costs associated with serving shippers. The triple threat of e-commerce retailers, logistics technology startups, and ocean carriers pushing into the logistics services space is creating pressure on forwarders to innovate in the way they adopt new technology and engage with shippers to maintain value in those relationships.”
Companies that do not keep up with the pace of innovation will eventually be left by the wayside, and if they haven’t already, begin taking steps to a more digital future. New freight forwarders need to know a few things about building the business case for that technology by following three steps.
Recognize the Fundamentals of a Successful Business Case
A successful business case must include the core components of an opportunity assessment, options, executive summary, cost breakdown, implementation approach, and recommendations, notes Supply & Demand Chain Executive. It’s a tall order, but those core sections can be best presented in a cohesive story-line. And done properly, any business case for technology in freight forwarding must focus on the short-term and long-term ROI and improvements to efficiency. Strategic thinking isn’t just a long-term approach, but a medium and short term one as well with hidden opportunities along the way to begin transforming your organization’s culture into a more digital one.
Define the Problem That Technology in Freight Forwarding Will Solve
Remember that the basic business case should put technology in freight forwarding first. However, that’s easier when the problem is clearly defined in the first place. It all begins with assessing the business opportunities and creating an objective, clear message of how technology will and will not affect current operations. Simultaneous review of the problem and its impact on the existing metrics surrounding staff performance and carrier/LSP utilization help build a strong assessment. If the talent does not exist within your organization, seek out expertise, fellow industry peers, and yes – even sales professionals – to learn more about what you will need in this regard.
Emphasize New Opportunities Created Through Freight Forwarding Collaboration
The next step is to emphasize how new technology in freight forwarding enables collaboration. The modern supply chain works together and not against other freight management parties. Even direct competitors, such as larger freight forwarders, may hold lucrative partnership opportunities in their midst.
By looking at more data and connecting with more freight management parties, freight forwarders of all sizes can achieve more profitability and reduce risks. Moreover, the increased number of freight forwarder and logistics startups is a testament to this fact.
As reported by Supply Chain Brain, “new players have stirred the competitive pot in such a way to have caught the attention of the traditional forwarders. According to a 2017 freight forwarding survey conducted by Logistics Trends & Insights, 92 percent of survey respondents indicated that digitization adds value for forwarders. Furthermore, 58 percent of survey respondents indicated that the improvement that will be utilized the most in the next five years for forwarders will be the digitization of all services.”
Deploy the Right Technology in Freight Forwarding With Cargologik
Freight forwarding is undergoing supply chain adolescence; new innovations in SaaS, cloud-based resources allow small and mid-sized forwarders to connect with more partners, reach more clients, secure bookings in real-time, avoid delays, and enable real-time performance measurement and improvement. This shift to SaaS from legacy technologies and lifetime license are real, and it’s time to start thinking more agile to effectively keep up with increasing customer expectations and demands.
It’s an exciting time for the industry, and it all begins with the right business case for technology investment. Start by ensuring your business case includes the three core areas listed above. And remember that maintaining a competitive advantage in freight forwarding depends on balancing technology and people to drive results. Sign up for Cargologik online to explore more about how your company can add value through digital freight management.