The on-demand economy has wrought changes in the way consumers and businesses both buy and sell. Digital marketplaces have reset users’ expectations for pricing and fulfillment. Yet some of the biggest industries in the world fail to take advantage of the promises made by digital business.
One of those markets is freight, which moves trillions of dollars’ worth of goods around the globe. The electronics industry relies heavily on ocean and air transit to and from the Far East where many components and subsystems are manufactured. One small manufacturer’s experience with overseas shipping prompted the formation of Freightos, an online marketplace for freight services. Among companies that import infrequently – four to 10 shipments per year– almost half spend more than $10,000 per month on international freight, a Freightos survey found. Many of these businesses still rely on spreadsheets to manage their shipments, said Eytan Buchman, vice president for marketing at Freightos.
“In the era of Facebook, Netflix, and Amazon Alexa, businesses can (and should) expect better,” said Buchman. “Freight is frequently viewed as a pass-through cost so there's less of a drive to dramatically overhaul processes. It's incumbent on providers to upgrade their processes but it's also the responsibility of customers to push for change.”
Not only are customers low-tech, but freight forwarders themselves are inconsistent when it comes to technology. Larger importers clearly have access to more sophisticated technology — about 25% of large importers (100+ shipments/year) said their forwarders are more advanced than other service providers, while only 7% of small importers said the same. Only 11.7% of large importers feel their freight providers are technologically advanced.
Companies should take advantage of accessible digital tools to improve visibility and transparency, said Buchman. While they may not be aware of them, there's a wealth of new platforms such as Freightos Marketplace to gain visibility into live market rates, the ability to compare, book, and manage shipments and tools for invoice auditing.
“Businesses should be utilizing every tool at their disposal when it comes to getting products on the shelves,” Buchman said. “Integrating more advanced technology will allow for accurate tracking, effective price comparison, and efficient booking.”
It’s not only up to businesses to improve. Freight forwarders would do well to integrate more sophisticated technology into their offerings. This is a work in process but it is happening, said Buchman. “Over the past five years, we've seen nearly a quarter of the major logistics providers shift to providing online freight quoting. Providing visibility into movement of shipments, and real-time updates on freight status will prove invaluable to their customers, who rely so heavily on them.”
Getting goods across an ocean from China to the U.S. is only one aspect of global trade, Buchman added. “Businesses need to be mindful of the many moving parts and processes that need to take place, such as last-mile fulfillment and finding the right oversees factory,” he said. “There are many companies working to alleviate the stress of handling the minutia, but at the end of the day, transparency should be paramount when selecting a logistics tool.”
Two options Buchman recommends are ShipBob for managing and fulfilling online orders, and Sourcify, for comparing and selecting international manufacturers. “Businesses should look for companies that provide visibility into every variable – prices, speed, shipment location, etc. If businesses have all the necessary information at their disposal, their operation will run much more smoothly – and that’s money well-spent,” he concluded.