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The importance of digital transformation for Freight Forwarders

Inadequate and outdated operational processes are no longer scalable or sustainable for the freight forwarding industry.

The Global Freight Forwarding industry has been challenged for decades with lack of investment in Technology. Many forwarders have suffered from old legacy inflexible systems, developed originally in the 90’s and in some cases even in the 80’s.

The freight forwarding industry runs on low margins and this influences the lack of investment in advanced technology. There is a digital imperative in freight forwarding and now more than ever the industry needs innovation to create a new normal.

Freight Forwarders that set off on a true digital journey are using innovation to work in their favour. This is creating serious benefits and a truly unique competitive advantage, whilst also setting the tone for required industry widespread change.

If you work in the freight forwarding industry, then the words Digitisation, Digitalisation, Digital Transformation are common buzz words you will be familiar with.

Digitization and digitalization are about technology whereas digital transformation takes the customer into consideration and is about digitally transforming a business and its strategies. It considers the processes and roles required for specific operations of a business.

Digital transformation is about embracing an ethos that centres around transparency and customer experience. It is a broad, strategic initiative that crosses organizational silos.

Why is it so important?

The WTO highlights that the current World Merchandise Trade is in excess of US$ 19,670,000,000,000 – that is US$ 19.67 Trillion. Patterns and trends factually highlight increases to Global trade that will force change.

It is undeniable that global trade is growing and the need for robust and advanced operational execution is emerging fast. The volume predicament means that inadequate or outdated operational processes are not scalable or sustainable for the freight forwarding industry.

Digital transformation is needed to sustain a healthy operation and a required balance between resources and productivity.

It is also hard to ignore the need to work on consistently improving your operation over time, just as much as you need to work on growth or sustainability. Improving your GP is not meaningful without improving your EBIT.

When you consider the key drivers of a Freight Forwarder, the issues with the P&L often lay below the File Profit (GP). Most are situated in the low to high 60% Personnel Cost of GP (PGP). Although the Industry is seemingly asset light, it is somehow still labour intense.

Many Freight Forwarders are still throwing people at problems instead of using technology, but the world’s most successful businesses and digital leaders embody a common collection of values:

  • Customer experience above all else.

  • Simplicity and speed taken to the max.

  • Investment in continuous innovation.

  • Fact-based decision making.

  • Collaboration & accountability as company culture.

Companies that fail to recognize that “digital transformation” is about transforming an entire organisation will find themselves on the wrong side of disruption.

At NavLab, we believe that digital transformation initiatives can begin with small investments. Extending your current infrastructure makes your organisation more agile to improve operational efficiencies and productivity across the board.

NavLab is a cloud-based quotation and rates maintenance platform that provides quick and easy access to critical data and encourages a more efficient way of doing business for Freight Forwarders.

Get in touch to unlock your digital transformation journey with NavLab and gain a personalised digital transformation roadmap.

Bernadette Habkouk

CPO NavLab

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