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   Vol. 15  No. 68
Tuesday September 6, 2016

Why Disruption Doesn't Mean Destruction

Why Disruption Doesn't Necessarily Mean Destruction

   A recent FlyingTypers article profiling Freightos noted some valid points about technology and logistics. Here at Freightos, we're the first to recognize the complexity of the trillion-dollar freight industry. And, as noted, "there is no magical digital solution."
   But a lack of a magical solution does not mean that there is no solution.
   Technology put a man on the moon, made global markets accessible, and can (almost) drive cars better than humans can. The true solution to the industry's significant challenges—dropping profitability, dead space, and inefficiencies—must incorporate technology as a central aspect. That needs to be a collaboration between technology companies and logistics companies, not drawing sides.
   Every year, over $19 trillion dollars of goods are shipped globally, much of it by forwarders who are conducting the world’s most complicated orchestra. Freightos has an incredible amount of respect for logistics providers. Which is why when we set out to change the industry, we did so by teaming up with forwarders. By providing in-house freight rate management technology enabling instant freight pricing and routing, we helped generate over 4,000,000 instant freight quotes for a thousand different forwarders. Only by working together to develop this expertise, could we launch our online marketplace in a way that benefits both forwarders and shippers.

Buys WebCargoNet 
    Freightos purchased WebCargoNet for an undisclosed sum.
    “The acquisition,” Freightos said, “creates the world’s largest online freight rate database.
    “Freightos now enables any company—from SMEs importing goods infrequently to mass retailers that need to import a small shipment quickly—the ability to conduct business online with ease.”

   Make no mistake, Freightos does want to change the industry. It takes shippers an average of 90 hours to get a spot quote. About $700 million dollars are wasted every year on invoice errors. Slow responses, manual processes, and lack of automation hurt carriers and forwarders as much as they hurt the shippers they're servicing.
   But disruption doesn't mean destruction.
   Unlike other platforms, Freightos is not disintermediating forwarders. We're helping forwarders automate internal operations so they can focus on landing new customers and providing outstanding service, instead of wasting time on manual data entry and cold calling.
   Like it or not, the industry is changing. Tech-enabled forwarders, like iContainers, leverage better processes to beat out traditional counterparts. Enterprise forwarders are increasing online sales activity, best typified by K+N's FreightNet. Carriers, like Delta and Lufthansa, are continuing their quest for direct-to-shipper quoting. And tech giant companies like Amazon and Uber are moving ahead with plans to increase logistics market share.
   Forwarders that work manually and slowly adding cost and delay may be casualties of this increased efficiency. Shippers want better service and, one way or another, they will get it. But the forwarders that provide value, leveraging experience, reliability, and new technology to help shippers, in an efficient way, will only benefit.
   Technology and freight are both vital components for industry disruption. According to Phil von Mecklenburg-Blumenthal, a Freightos director who was previously a DB Schenker executive, “only those willing to innovate, and who have the management skills to do it well, will survive.” Leaders in the freight industry need to get onboard with disrupting the industry themselves. Working together with technology platforms like Freightos is the best way to do that.
Zvi Schreiber

If You Missed Any Of The Previous 3 Issues Of FlyingTypers
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