Freight Forwarding Frenzy: The Future of Freight Forwarding is Now

by | Industry

From port congestion to changing customer expectations, a number of factors are changing the face of freight forwarding. Here’s what you need to know about the freight forwarding frenzy at hand, and some ways you can navigate the challenges.

Nearly 24 months of pandemic pressure have spurred more changes in the freight forwarding industry than the last 24 years combined — and it isn’t over yet. As research firm Deloitte points out, even as freight forwarders and shippers look toward recovery, “the COVID-19 pandemic has laid bare many of the long-standing vulnerabilities and risks lurking in organizations’ supply chains.”

In some cases, these challenges have created opportunities for digital growth and connectivity; in others, they’ve forced companies to make hard choices about where to invest and where to cut back. The result of this constant change and uncertainty is a freight forwarding frenzy: organizations are looking for ways to meet evolving consumer expectations, overcome unforeseen challenges, capitalize on new technologies, and stay ahead of the curve.

Is your company ready for end-to-end industry evolution?

The New Face of Freight Forwarding

While some industries are beginning to sense a relative return to normalcy, this ship has sailed for freight forwarding and logistics companies. A recent Bloomberg article describes the new normal of freight as “supply chain hell” and notes that “logistics managers are battling the pandemic, a labor shortage, and huge demand to get goods to your front door.”

Five factors are now changing the face of freight forwarding:

  • Evolving purchase habits

With brick-and-mortar stores shutting down at a moment’s notice during both 2020 and 2021, and shoppers concerned about exposing themselves to the virus, consumer purchasing habits have naturally shifted. The most obvious example of this impact comes from e-commerce giant Amazon — profits for the online seller have increased by nearly 200 percent since the pandemic began. Similar shifts have happened across more specific market verticals from food to household goods to clothes and electronics and persisted even after restrictions lifted as consumers saw the benefits of both on-demand shipping and the safety of no-contact delivery.

  • Ongoing staff shortages

Even as customer behavior pivoted to online purchasing, many logistics providers were losing staff. In short: demand is up, and capacity is down. Initially, employee losses were tied to pandemic shutdowns, but as controls eased and freight forwarding ramped up, limitations on the number of staff working in close quarters and the need for widespread quarantine measures if any workers became infected were only a piece of the puzzle. Government assistance also made it possible for some workers to pivot into new fields, leaving logistics roles unfilled and employers scrambling to find skilled warehouse and dock staff.

  • Continuing port congestion

Port congestion (or downright gridlock) has also evolved into a full-fledged problem for freight forwarders. Here, two components are critical: The increasing size of container ships and the evolving nature of customs and compliance regulations. According to FreightWaves, 2020 ordering was dominated by “megamaxes” — container ships with cargo capacity of 18,000 twenty-foot equivalent units (TEUs) or more. These massive ships require more space in ports and take longer to unload, in turn increasing port congestion.

On the other side of the coin are customs and compliance changes; governments across the globe are instituting more robust cargo checking and confirmation policies to ensure manifests match actual freight. As a result, shipping and delivery times aren’t always a sure thing.

  • Increasing competition

The advent of digital freight forwarding solutions and the ability to compartmentalize operations has led to increasing competition across the industry. By leveraging cloud-based and mobile tools, young startups can compete with far more established operations, in turn making it critical for those established logistics companies to find new ways to stand out from the crowd.

  • Changing customer expectations

Businesses employing the services of freight forwarding firms are now looking for increased flexibility and transparency. Customers are not interested in making phone calls and having drawn-out conversations; instead, they want on-demand access to information about shipping rates, shipment locations, and delivery expectations anywhere, anytime.

Making the Change

For freight forwarders, effectively making the change requires a multi-point strategy that addresses key challenges across the supply chain. In practice, this means deploying robust and reliable freight forwarding software solutions capable of delivering improvements across four key functions:

  • Centralization

Efficiency is everything in the new freight forwarding framework. If companies can’t keep track of what’s happening, where, when, and why, they may find customers choosing other logistics firms to handle their cargo. This starts with centralization; forwarders need solutions that ensure ease of data access across the organization from a single source of truth. Next is digitization — the use of platforms that easily enable the conversion of physical documents and files into standardized digital formats. Finally, firms need automation tools that can replace resource-intensive manual processes with accurate and agile operations. For example, forwarders can save significant time and effort by integrating automated solutions capable of quickly and accurately collecting and documenting cargo dimensions.

Magaya Supply Chain is your starting point for centralization. Equipped with integrations for freight forwarders that let companies easily create bookings, capture shipment data, and manage end-to-end operations with a single source of the truth, logistics firms are better equipped to meet the new challenges of today’s freight forwarding environment.

  • Interaction

Freight forwarding clients are now familiar with on-demand, immersive, and interactive online environments and experiences delivered by popular e-commerce platforms, and they carry over this expectation to freight forwarding functions. This means they’re looking for solutions that deliver connected experiences from initial quoting to eventual delivery. This starts with an accessible, easy-to-use customer portal that provides critical data at-a-glance.

The Magaya Digital Freight Portal gives your customers a branded, interactive digital experience that includes all the functions of a digital forwarder in a single application. Key features include online quotes, instant bookings, and continual data reporting to ensure your team is always up-to-date on current shipping workloads and your customers have the visibility and control they crave.

  • Visibility

Clients don’t want to wait for a response — they want timely, accurate data about current shipment locations, potential delays, and eventual delivery dates. Without this kind of on-demand observation clients can’t provide accurate information to their customers, in turn putting relationships in jeopardy. Best case scenario? Shipments are slightly delayed and your clients are frustrated. Worst case? Clients opt for another freight forwarding firm that can better meet their needs.

Container Tracking by Magaya makes it possible to keep your clients in the loop. With real-time visibility and support for more than 100 ocean carriers, clients always have access to the latest information about shipment progress and can update their customers accordingly.

  • Information

If there’s one constant in the freight forwarding industry, it’s change. This is evident from current conditions around staff shortages and customer expectations, but it’s also tied to information about rate data and tariffs that could impact the overall costs of shipping.

Magaya Rate Management lets companies stay on top of their rates, surcharges and tariffs across air, ocean, rail, and road logistics providers. Rate data is updated regularly using a database of more than 45,000 surcharge values, while centralized FMC filings makes is possible to create a quote in seconds. What’s more, the built-in Digital Contract Exchange enables fast, secure and accurate exchange of rate data between forwarders, shippers and customers.

Even better? With easy integration across all Magaya solutions, freight forwarders can achieve centralization, interaction, observation, and transformation on-demand.

The Future of Freight

Evolving pandemic pressures and changing market forces have combined to create a dynamic future for freight forwarding. Customers are no longer satisfied with opaque, disjointed, manual processes and generalized assurances — they want transparent, on-demand access to accurate shipping information, delivery data, and freight forwarding quotes.

The result? Forwarders can’t afford to rely on cumbersome and outdated operations. Agile, scalable, and automated solutions are now critical to capture customer loyalty and capitalize on the future of freight.

Ready to digitize and modernize your freight forwarding operations?

See how Magaya can help.