Digitalization: The future role of a freight forwarder

31.03.2021
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In the last newsletter, we launched an article series about the “digital freight forwarder.” In this number, we are pleased to present an interview with Lars Jensen, one of the world's most influential maritime experts, giving his view on a freight forwarder's future role.

How has the pandemic highlighted the importance of digital technologies?

"Covid19 has shown us that digitalization was further ahead in the industry than expected and usually known for. Fundamentally I think that Covid19 has accelerated the focus on digital technologies in the market, and digitization is necessary to stay in the industry. The train is running, and one has to hurry to jump on!"

In 5 years from now, what will the market situation look like for Logistics Service Providers?

"In the coming years, technological developments will influence the market significantly. In comparison, the industry will undergo the same changes as travel companies did years ago. Shipping / Freight becomes a commodity, so the freight forwarder must understand how to automate all trivial processes (costs) and learn to innovate and differentiate their business (revenue).

As the market goes online and becomes open, freight forwarders must have an online presence. It becomes crucial to explain to customers what added value and services they as an LSP can bring, including know-how, local knowledge, exception handling, agility, etc. On these parameters, freight forwarders can make a huge difference and make customers feel safe throughout the process - peace of mind!" says Lars Jensen.

From a strategic perspective, what would you do if you were heading a Logistics company?

"I would focus on three main areas. First, I will Identify all manual processes to see which can be automated or not. What can be automated should be automated! Secondly, I would focus on value creation and how to differentiate. In an open market, this is crucial. Finally, look into the competencies and any gaps in the organization and set up educational plans. Without the right competencies, one will have a weak foundation."

How will data sharing and business integration impact the business?

"So far, it is very much a technical discussion. Integration of business systems makes sense, but many freight forwarders find it challenging to see and understand the actual value. Gradually there is a bigger and bigger push from the customers, and the freight forwarders have to adapt.

The DCSA (Digital Container Shipping Association) will become a significant player setting up the future framework and standards. Like in other industries, standardization is the key for the industry to streamline processes, and e-B/L’s will be the first significant breakthrough, I believe."

How can LSP’s improve customer experience?

"As I said, digitalization, automation, and information will be critical. In addition to transparency, the relevant information must flow, and customers will take it for granted! I believe the freight forwarders will be measured on their ability to add value and handle exceptions. That is non-systematized tasks, tasks outside the norm, or tasks that do not go as planned. Freight forwarders that are only reselling services will have difficult times ahead. If they don’t add more value than the transport itself, the price will be the only parameter, and it isn’t easy to compete. Like in the travel industry, freight forwarders must broaden their service offerings and learn to do upselling."

A big thanks to Lars Jensen, for an exciting discussion and sharing his views and insights. Only time will show what will happen, but we will all closely follow the development. Meanwhile, CON-LINQ will be happy to assist or be your sparring partner in determining your digital strategy.

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Lars Jensen - Biography   

Lars Jensen is CEO of SeaIntelligence Consulting and is an analyst and thought leader providing expert assistance in strategic decision making and analysis in the wider container shipping industry.

He has 20 years of experience inside the container shipping industry. The past ten years have been as an independent analyst and consultant for carriers, shippers, ports, and maritime technology firms.

Lars is the author of the book “Liner Shipping 2025” focusing on the changes to come in the industry and how carriers, terminals, ports, shippers, and forwards should navigate these changes to emerge successfully.

Lars Jensen is co-founder of LinerGame providing innovative training and team building in the liner shipping industry with more than 100 sessions held in the past four years across 17 countries on three continents.

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