Freight forwarders: the essential partner

The role of freight forwarders has transformed over the years due to the need to provide what some call “a throat to choke” – a single point of contact for various activities. In this case, the overwhelming number of recurring disruptions has led to the need for freight forwarders to expand their service offerings to remain competitive.

According to Gartner, “Today, digitalization initiatives are pushing freight forwarders to update the way they do business. These put more pressure on traditional freight forwarders to modernize their systems and optimize their operations and costs. Sustaining operations, adding more value to their service and optimizing costs are now more important than ever. »[i]

Larger end-to-end, full-service outsourcing behemoths, such as third-party logistics service providers (LSPs), offer customers the option of outsourcing all logistics operations and certain supply chain functions. These giants are opposed by thousands of vendors specializing in services such as freight forwarding, transportation, warehousing, transportation, distribution, order fulfillment, and customs brokerage. Boundaries are blurring as carriers (owners of assets of all types) and freight forwarders (of all types) expand their service portfolios to differentiate themselves and improve customer service.

Against this backdrop, it is no surprise that demand for the services provided by the transformed freight forwarder/FSL set is strong and growing, driven by online shopping, globalization, business complexities and an increased need to focus on basic business skills.

These organizations aim to fend off disruptive competitors by creating innovative digital platforms and tools to improve efficiency, speed and visibility for themselves and their customers. Leveraging this shared value will help customers access the best of new supply chain management tools with less investment of time, resources and capital expenditure. As a bonus, more tightly integrated collaboration from a common platform leads to better operational performance.

Broader offerings to add greater value

At the epicenter of supply chain management is data and insights derived from excellent analytics. When enabled with an end-to-end TMS, tailor-made for freight forwarders, your logistics partners have a range of digital supply chain solutions to add value to customers, differentiate services and reduce costs.

In addition to core logistics services, there are three key technology capabilities that logistics service providers should focus on to differentiate themselves and deliver value to their customers:

  • Ecosystem Connectivity: Rapid network access connects suppliers, buyers, shippers, language service providers, carriers, partners, systems and data. Data sharing and collaboration are the primary goals of these connections, enabling visibility, speed and agility.
  • Planning and Execution Technology: LSPs provide customers with access to shared systems to manage transportation, warehousing, global trade, and other functions. This increases efficiency for all and inflates the LSP value proposition.
  • End-to-end visibility and control: A definitive objective of logistics management, precise and near real-time visibility of forecasts, orders, production status, shipments, inventory and locations are essential to improve business performance and control costs.

End 2022 strong

Market conditions in 2022 in transportation show increased volumes, tender rejections and costs. To ensure the continuity of their shipments, shippers must nurture relationships with their core contract carriers, partner with brokers, and prioritize their freight forwarder/FSL relationship strategies.

Not all TMS with international capabilities are suitable for the freight forwarding industry. Some are specifically for businesses that manage their own shipments. Freight forwarders and language service providers should be able to do all of the things listed above, but for multiple clients and as a paid service. This is especially important when it comes to modes of transport such as air and sea freight.

These organizations and the environment in which they operate require TMS solutions with specific features and capabilities that support international operations. They must also have processes involving many stakeholders simultaneously and across different levels of transport. Look for FF/LSP partners with the technology to help your business succeed in this competitive environment.

Gary M Barraco is AVP – Product Marketing at e2open. To learn more about TMS for freight forwarders, please visit our website.

[i] “Key Considerations When Selecting a Freight Forwarder Transportation Management Solution”, Gartner, 2019. McNeill, Will and Sanchez-Duran, Oscar.

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