Your 2024 Guide to Digital Freight Forwarding

Digital forwarders are changing the logistics industry and global trade market by introducing new technology and digitizing end-to-end processes. 

But what makes this innovative business model different from traditional freight forwarders?

We’ve got all the details.  

This article will discuss digital freight forwarding, including its benefits and challenges for the logistics industry. We’ll also cover technology used in digital freight forwarding

What Is Digital Freight Forwarding?

Digital freight forwarding is the use of digital technologies to coordinate and manage the transportation of products. This includes tracking shipments, coordinating with suppliers and customers, and managing documentation using powerful software.

It streamlines the process of shipping goods and automates tracking notifications, helping businesses save time and money by decreasing the need for manual labor. 

Moreover, the digital freight forwarding market is extremely lucrative, and digital forwarders aim to increase their market share using digital tools.

But you may wonder: 

How does digital freight forwarding differ from traditional freight forwarding?

Well, the answer lies in how a forwarder manages booking processes, their shipping operations, and how they minimize inefficiencies. 

Read on to know more. 

The Difference Between a Freight Forwarder and a Digital Freight Forwarder

Traditionally, booking a transport or logistic service involved making calls and sending emails to a freight forwarder. This entails the back-and-forth of written communication and a waiting period of three or more days just for price quotes or invoices from traditional freight forwarding businesses. 

Once the goods are shipped, you get limited information on how the shipment is progressing or if there are any delays.

On the other hand, a digital forwarder uses online tools to coordinate the movement of goods — including bookings, documentation, tracking shipments, etc. It makes the shipping process more efficient and provides more transparency and shipment visibility.

So, the main difference between a digital freight forwarder and the traditional freight forwarder is how they do their work and how long the operations take.

Next, let’s see how a digital solution streamlines logistics processes:

8 Ways Digital Freight Forwarding Improves The Logistics Industry

Below are benefits the logistics industry can gain in the global trade market by using digital freight forwarding. 

1. Improved Adaptability and Efficiency

The freight forwarding industry is constantly changing. 

This requires any forwarder to keep up with workflow issues, disruptions, and the evolution of the digital freight forwarding market.

That’s where a digital freight forwarder can gain an edge. 

They can efficiently adapt to the market by:

  • Identifying and addressing any supply chain issues
  • Automating their supply processes to reduce time-consuming tasks and human error
  • Streamlining supply operations to allow for the seamless user experience and transfer of goods

2. Increased Visibility

Digital freight forwarding can help businesses increase shipment visibility. 

It enables access to real-time tracking information about the cargo, which companies can use to offer supply chain visibility to their customers. 

For example, Shipthis’ digital freight forwarding software has a track and trace feature that provides real-time visibility and accurate updates on the progress of shipments.

3. Reduced Costs

There are many ways in which digital freight forwarding can reduce business costs. 

For one, businesses can use digital freight forwarding to generate reports and analytics based on current operations. The insights from these reports help forwarders see how they can improve productivity through automation and spend less on manual labor when transporting cargo.  

Additionally, businesses can also save on the cost of paper by switching to electronic documentation, providing easy access to all stakeholders. 

Want to learn more about electronic documentation in the logistics industry?

Here’s a guide to electronic air waybills.

4. Faster Responses to Queries

Digital platforms can facilitate quick responses to customer requests, reducing customer frustration. Where a traditional forwarder might take days to respond to requests, digital forwarders can answer most queries in a jiffy — or even instantly.

Looking to boost customer interactions?

You can effortlessly form a connection and collaborate with customers using Shipthis’ customer engagement portal.

5. Enhanced Security

Digital freight forwarding can improve business security.

It lets you protect shipment confidentiality through digital signatures and encryption. Moreover, forwarding providers can even set access permissions and create Chain of Custody records that can’t be tampered with.

6. A Better Customer Experience

Digital freight forwarders can provide better customer experiences than their traditional counterparts.

Shippers and forwarders can stand out by giving customers quick access to vital information about their cargo. They can also let clients connect with customer service agents when needed. 

Top digital freight forwarding platforms, like Shipthis, have a CRM platform to help shippers and forwarders improve their customer experience.

7. On-Demand Scalability

This digital solution enables freight forwarders to scale essential functions up or down on demand. 

For example, companies can quickly add new data sources for quote information or integrate additional carriers into their current roster to provide more choices for customers.

8. Facilitate Sustainability

Per The Intergovernmental Panel on Climate Change (IPCC), freight transport makes up 8% of global emissions, and it’s expected to become the highest emitting sector by 2030. 

The good news?

Digitalization of the freight forwarding industry could help freight forwarders monitor and potentially reduce their emissions. With big data, forwarders can make better decisions and optimize operations for more sustainable and environment-friendly freight forwarding solutions.

Now, let’s move on to the challenges digital freight forwarding faces.

4 Challenges of Digital Freight Forwarding

Digital freight forwarding, whether in the United Kingdom, the Middle East, or even North America, has its challenges.

Some of them include: 

  • A learning curve: Traditional logistics providers need to understand how digital technology works to use it effectively. So, professionals unfamiliar with shipping technology, like an independent freight forwarder, might initially find it challenging to navigate a digital transformation.
  • Complex routing options: Digital freight forwarding lets you see all possible routing possibilities to let you select the best shippers and shipping routes. However, this benefit requires you to review complex data. Plus, multimodal (ship, plane, train, truck) transport adds another layer of complexity to the mix.
  • Managing vast amounts of data: A digital forwarder must efficiently store, organize, and analyze data. Additionally, they need to integrate this data into current processes to make informed decisions about shipments.
  • Must add value beyond transportation: Digital freight forwarders differ from traditional ones due to the value they add above transportation via ocean freight, rail freight, and air freight. They must also provide better supply chain visibility, efficiently manage inventory, and deliver other freight forwarding services like customs clearance.

But where does this leave traditional forwarders? 

The Next Step for a Traditional Freight Forwarder

Uber entering the logistics industry with Uber Freight (in the United States, Canada, and Europe) is a sign of the digitalization of logistics services.

And that’s not all…

Aside from Uber Freight, there are several other big service providers in the digital freight forwarding market, including:

  • Agility Logistics Pvt.
  • Deutsche Post DHL Group
  • Flexport, Inc.
  • Forto GmbH
  • Twill (owned by Maersk)

Plus, according to McKinsey, 90% of supply chain leaders have invested in digital technology since 2021 and 80% expect to use it through 2023 and beyond.

Does this mean the end of traditional freight forwarders?
Well, not quite. 

Traditional freight forwarding companies must start building their knowledge about digital platform solutions to stay relevant in the market. They also need to upgrade their mindset and company culture to make the digital transformation easier.

Conventional freight forwarders can also utilize digital tools like freight forwarding software, a transport management system, or a customs broker platform to automate freight operations like accounting, shipping, and customs clearance.

But here’s the thing:

Forwarders also need to be willing to invest time and money into incorporating and adopting new freight forwarding technologies. 

In addition to purchasing top freight forwarding software, traditional freight forwarding companies need to train and upskill employees to make the most of its features. Only then will it be able to embrace the digitization of the supply industry.

To sum up:
For a traditional forwarder to keep up with the times and transform their company profile, they’ll need to embrace the changes in the logistics industry. And a simple way to do it is adopting a powerful freight forwarding software like Shipthis

Want to know about the technology used in digital freight forwarding?

Read on to find out! 

What Technology Is Used in Digital Freight Forwarding?

There isn’t just one technology system in play with digital freight forwarding. 

The top digital freight forwarding companies use comprehensive platforms like Shipthis, which offers a mix of: 

  • Artificial intelligence
  • Transport Management Systems
  • Integrations and automation
  • Business intelligence integration for big data
  • Cloud-based logistics and more
Step Into the Future With Digital Freight Forwarding

Digital freight forwarding presents many options for improving supply chain processes. 

But it does come with its challenges. So, you need to carefully consider everything before choosing a digital platform that works best for your forwarding business. 

Ready to give your freight forwarding business a digital boost?  

You can start by employing a comprehensive digital freight forwarding platform that covers air freight, ocean freight, and road freight — like Shipthis

Sign up today for a free platform demo and see how our freight forwarding services can help transform your company profile and grow your business.

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