What Is a Digital Freight Forwarder?

More shippers are looking to reduce costs and increase value-add from supply chain partners. Find out where a digital freight forwarder comes into play and what it does for shippers now.

The conversation surrounding freight forwarding has evolved. Along with discussing new regulations and rules, companies are also looking for ways to reduce the time-drain associated with traditional freight forwarding, and a digital freight forwarder is the solution. More importantly, digitalisation is on the horizon, and as explained by Boston Consulting Group, all freight forwarders will move into the digital age. However, making the switch can be hard, so shippers must understand the basics of freight forwarding, the differences between traditional and digital companies, and why a digital solution is superior.

What Is Freight Forwarding?

Freight forwarders are supply chain entities responsible for managing logistics processes that transcend the boundaries of a third-party logistics company, distribution managers, importers and exporters, and shippers. They perform a variety of duties, including managing shipping processes, documentation, and regulatory compliance for companies involved in international shipping explains Business Dictionary. While they may share characteristics as software vendors or 3PLs, their diversity continues to expand.

What Separates a Traditional Freight Forwarder From a Digital Freight Forwarder?

The distinction between a traditional and digital freight forwarder is not intricate. Imagine handling all processes listed above manually, including contacting carriers to negotiate rates, scheduling ocean container shipping, managing paperwork, and taking on liability for freight from shippers. Unfortunately, the complexities mean traditional freight forwarders could spend an hour or more trying to schedule and plan a single shipment.

Given the rise of e-commerce, ultra-competitive retail environments, and the rise of global trade upheavals, these processes represent a significant opportunity for improvement. More, global freight volatility undermines the efficiency of freight forwarding; however, moving into a digital frontier, using automated and integrated platforms, reduces redundancies, and maintains cost control.

Benefits of Working With a Digital Freight Forwarder

The digitalisation of freight forwarding is essential to global supply chain success, and it offers stark advantages over traditional processes. In fact, 92% of industry experts predict digitalisation to add value to freight forwarding companies threatened by the disruption caused by carrier-initiated freight forwarding capabilities, says Container News. A few other benefits that accompany a digital freight forwarding partnership, include:

  • Better buying experiences for customers, knowing more information about what they will pay for in regards to shipping and when to expect its arrival. An informed customer is a loyal customer, and with more customers willing to pay a premium for faster shipping, it is in the best interest of all companies to offer immediate access to freight rates and delivery schedules.
  • Increased tracking and traceability, promoting transparent process management. After selecting a shipping option, tracking and traceability throughout transport will ensure customers stay informed and help supply chain leaders manage the process. More information about a shipment’s location also enables better load planning for subsequent activities while in transit.
  • Improved documentation management and compliance. More countries, including the U.S., are actively involved in international trade, and with the rise of fraud in all industries, regulations are taking hold to reduce its damage. Unfortunately, accurate documents and proper management of records represent added complexities that reduce efficiency. A digital freight forwarder eliminates this by allowing the sharing of documents and providing immediate access to information.
  • Integration with existing platforms and new modes, including air freight, to maximize value and reduce costs, reports McKinsey & Company. Integration between platforms further automates processes, reducing the need to speak with a real person and enabling faster freight forwarder tendering, which also keeps costs under control.

However, the impact of the benefits of such relationships is so significant that they warrant a much longer and in-depth explanation of the challenges they solve and how they affect operations.

Bring Freight Forwarding Into the 21st Century With the Right Partner

Digital freight forwarding is not a nice to have; it’s a must-have in today’s digital age. Shippers that continue working with traditional freight forwarders will see higher rates and longer delivery windows. Fortunately, a digital freight forwarder can tackle these challenges and even reduce the need to speak to someone in person to tender freight forwarding, if preferred. Find out more about how your organization can get started and how it will benefit your company by contacting Shypple and requesting a demo today.

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