When I joined the forwarding industry two decades ago, I was greeted with the cliche, "We're travel agents for people's freight." Little did I know that, within a decade, the concept of a travel agent would shift dramatically. Travel agents were hit with a technology one-two punch: disintermediation (airlines and hotels selling directly to consumers) and digital disruption like Expedia providing a more consumer friendly service at a larger scale.
With carriers like United, Lufthansa, and Air France all approaching disintermediation through platforms like Freightos, WebCargo, and Flexport going all in on consumer accessibility, forwarders are already feeling the impact of the same dynamics. These innovations are backed by new evolutions in the underlying technology that supports the global supply chain. APIs and Internet of Things (IOT) devices are putting real time information in our customers hands without the need to call or email our offices. Advances in web and mobile technology make booking a shipment as seamless as calling for an Uber.
“How do we bring new value to our customers?”
The right questions for forwarders aren’t “How do we fight this change?”or “How do we maintain the status quo?” The right questions are, “How do we bring new value to our customers?” and “What is unique about our position that we can leverage?”
To answer these questions, let’s loop back to the travel agent analogy and investigate an app that I use on my phone every time I travel.
Freight Forwarders Are Like Travel Agents
TripIt is a travel assistant application that manages my flights, hotel bookings, car rentals, and events into a single itinerary every time I travel. It’s owned by SAP Concur, one of the world’s largest travel and expense management software companies. TripIt combines multiple new innovations from the past decade into a unique set of features that are different from what I’d get from any other app or provider.
As we look at these features, we’ll see that they stitch together to create a well positioned product that is perfectly focused on a frequent traveler who manages his own travel plans. SAP Concur’s other products which include advanced fraud detection, direct booking, and high volume expense management are aimed at an adjacent market, corporate expense managers, who have a different set of problems. Had SAP Concur tried to merge all of this into one product, or just exposed a “lite”version of their internal management system to me, they’d have missed the mark completely.
Digitizing Your Supply Chain Starts With a Solid Foundation
As forwarders, we must look at our baseline operating system and see how we can use the newer technology offerings to expose the right feature set to our client’s to create a unique offering. With the explosion of focused, cloud-based software offerings in the marketplace, your job is to assemble the right ones to augment your existing operations system and build out a unique offering that matches your market position.
Intake Innovation
The first feature that hooked me on Tripit was their advanced email parsing. I forward every reservation I make to plans@tripit.com. Magically, it parses an American Airlines reservation, a Hertz confirmation, or a Marriott booking without any extra intervention. It eliminates the effort of building a manual itinerary or typing all of these events into my calendar. To reduce intake friction, TripIt hooked me early and made sure I kept using the product.
From a forwarding perspective, intake innovation is the land of the booking portals. Kontainers, Stargo, Freightos, ItsMyCargo, and others are working to reduce friction for customers that need to make manual bookings by putting that power directly on their desktop or mobile device. If your target customers are currently booking via email or phone, this is a great place to add onto your service offering with a new technology front end. If your customer base is highly automated using EDI to push bookings from their ERP, then this might not be the place you start assembling your unique product offering.
Real-Time Supply Chain Visibility
The piece of magic that TripIt exposed was real time flight alerting. When I’m on my way to the airport, TripIt lets me know about a gate change or flight cancellation and allows me to act quickly, avoiding headaches down the road. Behind the scenes, TripIt has integrations pulling this data from airlines and aggregating it together into a single set of cohesive alerts. It doesn’t matter whether I’m flying on United or Delta, TripIt has me covered. Additionally, TripIt can take this a step further than the airlines themselves by showing me alternate flights on other airlines that are within the context of my full trip.
The real time visibility APIs offered by companies like project44, Vizion, and Overhaul, provide the baseline visibility to the movement of a shipment. While shippers can buy these integrations directly, forwarders can use them to add even more value by integrating them with other data about the shipment and commercial environment.
Imagine telling a customer, “Not only can we alert you to shipments that are delayed in transit, but we’ll filter those messages based on your current inventory and only alert you when the shipment is likely to create an out-of-stock situation.” That's a unique value that only a true supply chain partner can bring. If your customers are closely managing inventory, have high value shipments with pilferage risks, or are looking for real time visibility, then these API services might be the unique bolt on that’s perfect for your unique product. If you’re handling regular routes with low variation and high on-time percentages, then you might want to start elsewhere.
Operationalize Your Visibility DataDynamic Pricing Tools
Yet another great TripIt feature (and at this point, they probably should be paying me for this article) is their Fare Tracker. This leverages the data they already have from my reservations to alert me if they find a cheaper fare on the same flight (taking into account change fees). A single use of this feature can pay for my annual subscription by itself.
As forwarders, there are a few ways to bring value in this space. Dynamic pricing tools like WebCargo can help us find the best price for our customers in real time helping us show savings and win more business. If your customers are price sensitive or consistently shopping each shipment, this can add the value you need to convert and retain more business. If your customers are sending project freight or regular shipments where schedule is more important than cost, then you can show more value with another feature.
Managing Scope & Alignment
With all these features, and all the potential travel related features that TripIt doesn’t offer like restaurant reviews and direct flight bookings, how did they end up with a cohesive product that is well targeted to me, their target customer? They exercised good product management principles, and then integrated the available technology to build out the right product for their market.
As a forwarder, you can do the same by following a few simple steps. First, have a leadership level conversation about who you are and who your perfect customers are. Technology isn’t a core part of this conversation, but IT should be in the room. Come out with a sentence like “We are the white glove service provider for low volume, high value electronics companies.” or “We’re the lowest cost provider for companies that have regularly scheduled freight from South America.”
Next, map out the one to three most important things that your unique customers need. “Our customers’ freight is time sensitive and they need full visibility to every step in the process.” Or, “Our customers’ are in a highly regulated industry and compliance is job #1.”
Finally, focus on finding a few unique software providers who love your customers’ unique needs. Find the best tracking provider or the best trade management platform or the best analytics and reporting package. Then fully integrate that tool into your base operations platform so you end up with a unique offering that is unbeatable in your operating segment.
At that point, you’ll be able to rise above the noise, presenting a unique product to your customers with just the right amount of distinct IT. Your message will be cohesive and will separate you from all the forwarders using the same old generic operations platforms.
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Adapted from an article printed in the Summer 2019 issue of FORWARD, the magazine of the Airforwarders Association.
