Differences between a traditional and online freight forwarder

Contrasting a traditional and online freight forwarder

Amid the growing calls for the freight forwarding industry to embrace technology, more and more freight forwarding startups have sprung up. Much has also been made of online freight forwarders. But why is there this urgent need to go digital? And how do online freight forwarders differ from traditional freight forwarders? In this post, we’ll be addressing just that.

According to a survey conducted earlier this year by logisTIcs, a global logistics research and consulting partner, while 68% of respondents believe that traditional freight forwarders remain relevant in today’s environment, a massive 92% of respondents indicate that digitization will add value for freight forwarders.

The need to move towards digitalization is clear. But just how many freight forwarders are doing so, and how does digitalization affect workflow and processes?

Website functionality

While most traditional freight forwarders have websites, they mainly only talk about the services they offer. Only the more advanced online freight forwarders feature documentation and rate functionalities on their site.

Quote requests

Certain traditional freight forwarders may have a “quote request” function, but chances are that you won’t be able to get in touch with them immediately. Sending in a quote request may only get you a quote via email, sometimes days later - if that. According to an iContainers survey, 40% of all freight forwarders take four to seven days to provide customers with a quote.

Immediate quotes

Perhaps only a handful of traditional freight forwarders offer immediate quotes and that’s typically for their own LCL products. They also often come in the form of a tariff where shippers would have to look up ocean freight and surcharges separately. In short, the math is not done for them and the end charges have to be calculated by themselves.

With online freight forwarders such as iContainers, for example, a quote is provided within 15 seconds with all charges broken down and included for full transparency.

Tracking

Today, only a handful of traditional freight forwarders provide tracking tools and sailing schedules. Again, these would probably only apply to their own LCL cargo. Online freight forwarders tend to have tracking tools for various types of shipments.

At iContainers, we are constantly striving to improve tracking efficiency and transparency. This year, we launched our very own Track & Trace function and automated notifications system for shippers. Not many online forwarders offer these tools and those that understand the importance of transparency are perhaps the ones that are leading the digital revolution in the industry.

Digital doesn’t mean losing the human touch

Much of the resistance to this digital change by the traditional forwarders comes from the personal touch/relationship that many shippers have with their freight forwarders and value. For them, it’s vital to know that there’s a human presence behind the pile of paperwork, to have someone they can depend on to make sure things progress along smoothly.

Shipping a container in this complex industry can be very taxing, especially when things rarely ever go as planned. A traditional forwarder maintaining this personal touch has the vision and experience of calming the situation and placating the customer.

That’s however, not to say that online freight forwarders are not able to fulfill this role. Many seem to have the misconception that online freight forwarders lack a human presence and that’s certainly not true. The basic principles are the same. There are physical people working on ensuring a shipment goes as planned. The difference is in the intervention and method of execution.

At iContainers, our operatives step in only when needed to reduce the amount of to and fros and speed up efficiency. If things were to go wrong, shippers can be assured of an operations specialist helping them out.

The long road ahead to full digitalization has been mapped

The flag may have been waved and the revolution may be slowly picking up steam. But it may still be while until traditional freight forwarders drop their habits and adapt to this change.

“I reckon it will still be a long way, and by that I mean a few decades to go before traditional freight forwarders are phased out. Right now, the digital companies are just starting to make their presence known.”

-Klaus Lysdal, Vice President of Sales and Operations, iContainersBold

The digital pacesetters

The big players in the industry have begun work on improvements. Their success with new platforms will largely determine how quickly others will follow suit. If they succeed, mid-sized forwarders are likely to emulate their digital footprints. Smaller forwarders will find themselves having to team up with others, form freight associations, or depend on neutral NVOs to have a shot at competing.

“The big guys are essentially the ones setting the pace. If they don’t nail it with their upgrades, the mid-sized and smaller forwarders will certainly not feel pressured into making the same investments as they won’t be too impacted.”

-Klaus Lysdal, Vice President of Sales and Operations, iContainersBold