In tune with digitisation?

The Covid-19 pandemic has emphasised the world’s status as a global village … Apart from the virus, sadly, spreading to all corners of the earth, supply chain disruptions have plagued the planet. But all hope isn’t lost. Freight forwarding is set to rise and get an injection of innovation as well.

According to ResearchAndMarkets.com, the global freight forwarding market is expected to grow steadily at a compound annual growth rate (CAGR) of more than 4% from 2021 to 2026.

But it does face numerous challenges. “Being non-asset based, the sector is facing high competition from other players in supply chain and technology-based companies which are disrupting the freight forwarding market,” the global market research store notes in its report “Freight Forwarding Market – Growth, Trends, Covid-19 Impact and Forecasts (2021 – 2026)”.

“The market is one of the sectors that were hit the hardest by the Covid-19 outbreak in 2020. With the lockdown in many countries and a major focus on the production of essential products, the volumes of air and ocean freight have fallen significantly in 2020. However, the market is now recovering – backed by the manufacturing and e-commerce industries, especially the air freight forwarding market.”

The report highlights that the sea freight forwarding market is also booming, owing to the growing penetration of the internet, increasing purchasing power parity, developments in infrastructure (ports, containers, and ships with new technologies), and services designed particularly for the e-commerce industry.

“Sea freight forwarding is preferred by several end-user industries [as well], and several strategic partnerships are also likely to promote the growth of sea freight forwarding during the forecast period. The growing global cross border e-commerce market is also driving the less-than-container load volume and is positively impacting the sea freight forwarding market growth.”

It adds that, for the freight and logistics market, Asia-Pacific is the fastest-growing region globally. “This is due to the increasing logistics in ASEAN countries and the presence of major economies, like China and India. Additionally, the high government support for the logistics sector in the region is also a factor boosting the industry growth.”

China is the largest manufacturer in the world, with an increasing demand for pharmaceutical products and essentials. “China reopened its factories way before other countries. As a result, it is still leading the freight forwarding market, globally,” ResearchAndMarkets.com highlights.

“Also, leading countries in the region are observing faster technological integration in the logistics process. In India, 80% of freight moves by road, and the trucking industry is adopting industry-leading tracking technology to trace and predict the exact delivery times. Thailand is incorporating IBM and Maersk’s blockchain project to streamline its shipment monitoring processes.”

Those that embrace digitisation are also set to be in the driver’s seat as the digital freight forwarding market is expected to grow at a CAGR of around 25%, as highlighted by Reportlinker.com in its piece “Digital Freight Forwarding Market – Growth, Trends, Covid-19 Impact and Forecasts (2021 – 2026)”.

“Digitisation is continuing to be one of the key drivers supporting growth of the current economy. Companies like convoy, Uber Freight and uShip are coming up with new platforms to fill in the gaps in the logistics industry. With digital freight forwarding the manual process will be reduced.”

It adds that growth in e-commerce is driving the digital freight forwarding market. “In 2019, retail e-commerce sales worldwide amounted to around US$ 3,53 trillion and e-retail revenues are projected to grow even further at a quicker pace in the coming few years.

“Online shopping is one of the most popular online activities worldwide, both domestic and cross-border e-commerce is booming in developing markets such as China, India, and Indonesia due to that reason. This encompasses not just direct-to-consumer retail, but also shipments of electronics, pharmaceuticals, and consumer packaged goods.

“With increasing access to the internet, even the manufacturers of products are gradually moving from traditional freight forwarding to digital freight forwarding. The major benefits of digital freight forwarding include instant quotes, transparent pricing, comparison of rates and carriers, tracking and easy documentation.”

The revolution has also spilled over to the road freight industry, as highlighted by DHL in its piece “The Digital Revolution of Freight Forwarding: Not a Matter of If, but When”. “In road freight, the battle to ‘Uberise’ trucking has been ignited by the emergence of digital freight marketplaces like Saloodo!, a subsidiary of Deutsche Post DHL Group, which enables shippers to search for road freight carriers, and carriers to find cargo shipment requests, at the click of a button.”

It adds that e-commerce giants such as Amazon, JD.com, Lazada and Alibaba previously used online platforms to reinvent retail models. Now they are building their own digital platforms and logistics footprint to support the growth of e-commerce volumes.

DHL has also raised the stakes with the launch of its latest digital solution: myDHLi, the first digital freight platform in the industry that covers all modes of freight.

“The one-stop mobile portal provides customers with real-time shipment visibility round the clock, with a convenient follow-and-share option to encourage collaboration with colleagues, customers and partners.

“While most digital platforms only offer quoting and booking functions for single modes of freight, myDHLi tailors quotes and bookings, and offers competitive freight rates across all modes — a first in the forwarding market. Customers can easily access all other information, including shipment analytics and all essential shipment documents within the portal.”

By combining these services on a single platform, customers will have 360-degree visibility and the ability to manage their logistics anytime and anywhere, according to Kelvin Leung, CEO, DHL Global Forwarding Asia Pacific.

So, while the world is battling Covid-19, the freight forwarding industry is set to weather the storm and fortune will favour those that are in tune with digitisation.