Digitalization Journey of Traditional Logistics Companies: To Be or Not To Be!
Digitalization is shaking up the ongoing logistics, opening the doors to greater visibility, connectivity, mobility and agility. For the freight forwarding industry, the application of these new technologies has shown huge potential to simplify and manage operations.
Logistics companies that can become “digital forwarders” by digitizing their processes will be able to survive in the logistics market. The digitalization of traditional freight forwarders is happening alongside the growth of digital forwarders.
Digitalization is the use of digital technologies to change a business model, optimize operations and provide new value-adding opportunities and revenues. The COVID-19 pandemic, which brought massive supply chain disruptions and huge growth in e-commerce, accelerated digitalization in freight forwarding. The pandemic exacerbated the need for simplification and supply chain resilience, which digitalization helped achieve.
The pandemic also supported the growth of digital freight forwarders. Digital forwarders use technologies to organize and coordinate the movement of goods, managing documentation, tracking shipments, and for quotations and invoicing.
The digital freight forwarding market is about 8% of the total freight forwarding market (annual growth rate (CARG) of 23%), according to Allied Market Research. In comparison, the global freight forwarding market as whole is recording a compound annual growth rate (CAGR) of just 4.2%.
Highlights of the “Digital Freight Forwarding:
- Visibility and transparency
- Speed and efficiency
- Scalability
- Flexibility and agility
- Augmented customer experience
- Sustainability