‘Is the ghost of P+O still alive?’

In the late ‘90s a major container shipping line of the time, P+O, made various press releases, stating they would oversee the demise of forwarders, by actively selling against us. Well, that never became the fulfilled prophesy, and in 2005 they were acquired by Maersk Line. We all went on for another decade, building our intertwined Line/ Forwarder relationships and services. 

 Fast forward to the present day, our traditional forwarding model of buying slots and selling them on with our value-added services is under attack again. 

Only last week Maersk announced it wants half its earnings to come from Inland Logistics, a bold statement without convincing reassuring words for their customer base of forwarders.

I feel that the container shipping lines threat of removing the forwarder, and gaining greater directFCL market share, is in fact growing. And the threat is not about vessels, containers, rates, rebates or landside equipment, it is now driven by the one thing forwarders must keep control of, DATA.

Forwarders for all for their value and expertise, are probably, behind closed doors, seen as ‘low risk-taking pariahs’ by margin hungry, asset-heavy Lines. 

The Lines do not have the forwarder skill set, but with the move towards a seamless cloud operation, they are positioning themselves to expand their direct FCL business. 

We presently hold all the shipping data for our customers, and we offer it back through Track and Traceand  bespoke systems - but so to do many other forwarders - for the same shippers. 

Has anyone ever thought how many data portals a shipper could have for all their modes of transports into one DC?

How many have considered offering a 4PL solution to manage all this data, for small parcels, trucking and airfreight. Multi-modal services that are far removed from the one dimensional uni-modalLine service.

It is about de-risking this potential loss of business by controlling more data.

If we consider Blockchain, for example, the much-heralded solution seeking a problem.

Here is a concerted effort, with multiple lines under the Maersk/IBM joint venture banner, offering a secure controlled end-to-end solution, where documents are no longer exchanged physically or digitally, but instead the relevant data is shared and distributed using blockchain technology under single ownership principles determined by the type of information. These very Lines, who have been unable to give us any data, by phone (!) or online are capable of leaping decades to seek control of a potential industry standard data flow mechanism. 

And it includes us in the mix too, as apparently their branded Blockchain offering ‘includes organisations along the end-to-end journey of a shipment, including shippers, 3PLs, ocean carriers, inland transporters, terminal operators, ports, customs authorities and financial services companies’. Oh, and you can track your shipment through Blockchain too.

This is our data to our customers isn’t it? I feel we are being given a gift, one we already owned, it is just wrapped in different paper. However it shows the forwarders’ short term thinking. We have failed to capitalise on the importance of DATA delivery, and thought IT innovation started and finished with our TMS.

Ten years ago, my company at the time, SBS Worldwide created one of the first 'Control Tower’ dashboard platforms. Our Far East agent had a more functional offering and suggested, rather than waste resource in fulfilling our dashboard dream that we could use his software. One simple question dispelled that offer, and that question is still relevant here.

“Who will then own my freight paying customers?”

The normal forwarder business model surely won’t buy into supporting the Lines’ Blockchain?

However, we have to show Solution leadership and not be, like many of my new Freight Trolls last week on Linkedin, who responding to a supporting Flexport software article, offering just sniping vendettas when they know so little. We are all forwarders, traditional and online and we need the younger thought process in our industry to shine through.  

Forwarders do not invest in such things as collective industry technology, preferring to take the best in the class offering, white-label it, and bolt it on to their leased/owned transport management systems (TMS).  

We prefer to let others go ahead to prove the model, then we will accept the services, with a resultant fee, which we will try to discount, before including it as a pass-through with margin, as a new revenue line on the invoice. It is here where forwarders are most vulnerable. 

The greatest concern is the leaderless void of forwarders interests. If you mention FIATA to any young forwarder, they probably think they are an events company for old forwarders. They clearly have a support role offering training, examinations, industry documents and terms and conditions, but is FIATA still fit for purpose in 2019? 

Do we still want just passive support programmes?

Where are the young dynamic leadership teams? 

When were we last represented in Data Media by FIATA?

 Why does their Twitter account only have 221 followers? 

Interestingly 15% of my most avid social media followers are freight forwarding CEO’s, but not one of them follows FIATA.

Do we need to pay more subscriptions into FIATA, to create a new division  to robustly represent the present-day threats to our industry? 

The Lines in the 19th century formed Conferences, cartels, (https://eh.net/encyclopedia/international-shipping-cartels/ ) where they agreed the rates and services each of them would offer, to control the market. With the advent of Anti Competition legislation it was disbanded and the waves of that, have had far-reaching repercussions. Now any executive or staff member is on-risk by being at the same meetings as competitors, in case it could be mistaken for collusion. 

So the Lines may no longer have a cartel on rates and trade routes, but is there a potential cartel now on Blockchain and resultant fees?

And while the Lines collectively feel free to discuss a singular Blockchain commercial innovation, forwarders remain fragmented.   

If the Lines have this control of the data platform, it must support a goal of expansion, by offering it to volume shippers. 

Who else would sell this, to make this a viable investment success? It has to be the Lines. Not actively seeking the freight movement maybe, but the friction between line and forwarder will create a competitive advantage in favour of Blockchain.

“Could a reinvigorated FIATA become a safe haven for forwarders to discuss a wider new industry strategy?”

They could facilitate the creating of not only our own Blockchain partners, but data standards, controls and future revenue streams. 

We have many advantages beyond our traditional and growing online expertise:-

 - We handle all modes of freight, unlike the Lines

 - We presently have the data and many BCO relationships

 - The online forwarders and service enhancers have done us one huge favour, they have attracted the fund managers and VCs who are desperate to invest in our industry

“Could forwarders consider through FIATA supporting K+Ns/Accenture’s platform?”

I hear instantly the negative response, but if the Lines can collaborate, in this fast-changing world, could we the forwarding community at least consider this? We do not have time to lose; we need a partner who is on this journey already.

“Would the Maersk/ IBM Blockchain allow FIATA to sit on an Independent Management Board, now that the carriers want to become one of us?”

Therefore all data would reside under the control of an independent entity. That would support the call for dynamic changes within FIATA.

The forwarding industry needs to consider unifying to form new alliances, inconceivable one year ago, that will offer further profit streams into our industry for decades ahead. 

We surely do not want to pay to strengthen the Lines digital expansion that will erode the forwarders significance in international trade.

The ghost of P+O must not be allowed to sail out of the mist 30 years on. That really would be taking liberties with the definition of Slow Steaming.