The logistics industry gets little credit when it comes to the adoption of technology. It seems like there is a new technology startup appearing every day promising to “disrupt” the $3 trillion shipping industry – while at the same time criticizing shippers and logistics companies everywhere as luddites.
Maybe the perception comes from the tough nature of the work logistics companies do. Freight can be a dirty business, literally and figuratively. The attitude for most people in the industry is that, in the end, all that matters is the delivery gets made and style points don’t. Or, at least they didn’t in the past.
This idea is perhaps also a broader statement on the industry itself because at least parts of the shipping process remains manual and paper-based for everyone – through no fault of the service providers or shippers. There has clearly not been a compelling enough reason for things to change more than they already have.
If shippers had demanded more, providers would have to make more changes to make the process better – like adding technology. The bottom line is that up until now the pain being felt by anyone has not been great enough to inspire change for everyone.
Today, we argue that the industry has reached a tipping point and this is no longer true. Freight forwarders and other logistics companies who have not invested in or using technology are now feeling a negative impact on their business – and this is finally inspiring action.
There are several reasons it’s happening. For one, companies leveraging the correct technology operate more efficiently – this is a pretty simple idea. Track and trace, rates and cost data, and other information flow through their operations and to customers better. A thing as seemingly simple as how technology can eliminate the need to rekey important shipment information saves time and eliminates errors. It also helps to create a more consistent, repeatable workflow that enables easier sharing.
The benefits extend beyond just operating better too – Read About That Here: Logistics Technology Is About More Than Process Automation
Freight forwarders using technology are able to provide a higher level of service and customer experience. The aforementioned benefits of track and trace, as well as reporting are two important examples. From the customer’s perspective, forwarders using technology are simply better to do business with.
Technology also makes forwarders better customers themselves. They are able to provide more accurate and timely information to their carrier partners. This is rewarded with more competitive rates and preferential treatment when problems come up – and they always do. We are talking about shipping after all.
As a final note and speaking of issue resolution, technology digitizes much of the paperwork in the shipping process which is especially important to international logistics. Documentation that gets lost is replaced faster when it’s digitized and available through a central technology platform.
The perception that the whole logistics industry is behind the times when it comes to using technology is often over blown. Yet, there are a lot of companies that could be doing a lot better – many of them freight forwarders. These companies would be smart to start seeing technology as a requirement of doing business and a key way to serve customers better and make that part of their own ROI equation.