Digitalization in Freight Forwarding: The Benefits and Risks

In the new age of digital freight forwarding, e-commerce consumer reach and next-day delivery flexibility, freight forwarders need to keep pace with the latest emerging technologies and technological trends. Not only is it a necessity to meet rapidly evolving customer demands and expectations, it’s also become essential to solve the overwhelming daily complexities they face.

Every day, millions upon millions of datasets change hands within the freight and logistics industry, much of which ends up in the hands of freight forwarders. To add to the challenge of overwhelming incoming data volumes, the majority of this data is unstructured and unusable, slowing down forwarders’ response times and competitiveness within the industry.?

The only way to solve the challenge of data is through targeted and effective digitalization, not just of one process but of a forwarder’s entire operations. Digitalization is no longer optional for forwarders, it’s imperative for their business longevity. Let’s take a closer look at the concept of digitalization and how it can benefit freight forwarders.?

What is digitalization within the freight and logistics industry?

Before we examine its greater benefits, let’s first unpack the concept of digitalization, especially within the forwarding industry. So what exactly is digitalization? Simply put, digitalization is the use of digital technologies and solutions to transform an organization’s business model from an analog one to a digital one.?

In the process it creates new opportunities to deliver value, enhance existing services and grow revenue. In the age of industry 4.0, digitalization has evolved to include technologies like AI, IoT, machine learning, advanced analytics and automation.

Within the world of freight forwarding, many freight forwarders and brokers still rely on manual data management in their processes, or static systems like Excel to house their data. Here’s where the problem of overwhelming incoming data and data management becomes a problem.?

A freight forwarder still manually recording, updating and analyzing data on spreadsheets can’t respond quickly to incoming digital price requests from shippers looking to send their goods as soon as possible. Without digitalization, freight forwarding teams spend hours pouring over neverending price requests, manually extracting the data and creating RFQs to send on to carriers.?

Guess what happens during that time? The shipper finds another forwarder who responds to them more quickly and moves on. With digitalization, however, a forwarder can automatically extract incoming price request data, generate and send off an RFQ, receive a buy price back and create a shipping proposal, entirely through AI and automation. The shipper doesn’t spend hours or days waiting for their proposal and the forwarder doesn’t lose hours of productivity or potential shipping deals.?

The benefits and risks of digitalization

It goes without saying that the potential benefits and use-cases for digitalization within freight forwarding companies are endless. Through digitalization of their operations, forwarders can master their data management at every process point, without losing valuable time or sacrificing quality and/or accuracy.?

They can speed up and simplify their processes, from shipment request to proposal generation. Digitalization automates data structuring, cleansing and enriching, eliminating manual data analysis and correction that eats into team time and productivity. Though AI and ML, digitalization can provide real-time visibility and insight into operational performance, from shipment location to supply chain partner operations.?

But, benefits of course do come with potential risks too. One potential risk of digitalization is implementing digitalization with no larger strategy in place to guide it. Digitalization without identifying key areas in workflows that can benefit from it could result in forwarders failing to digitalize the right processes, losing upfront investment costs.?

Another potential risk of digitalization is digitalizing processes without having the necessary data platform to seamlessly manage these processes. Forwarders then have to invest exorbitant amounts to expand their tech stacks to ensure their data systems “speak” to each other.?

Implementing digitalization effectively with Stargo

A simple solution for embracing digitalization with all of the benefits and none of the risks is to opt for an AI-powered data management platform, like Stargo. Stargo harnesses AI, ML, and other powerful features to structure, enrich and centralize your freight data, while automating your data management processes.?

Through Stargo, you can unlock deeper business insights, identify key operational areas for improvement and deliver an enhanced, agile customer experience to shippers. Book a demo to discover what Stargo can do for your operational efficiency and productivity.?