It’s common knowledge, for any logistics professional who has spent 10 minutes reading about the logistics industry, that traditional freight forwarding will continue to commoditize amongst the thousands of freight forwarding and logistics companies in the world (International Federation of Freight Forwarders Associations alone has 40,000).
That may be a bit harsh, but the truth of the matter is that logistics customers – shippers – are constantly seeking ways to squeeze costs out of the supply chain while improving performance - particularly in inventory and transportation.
3PLs Digitizing Supply Chains
What this means for logistics providers is that you can either enter a battle to offer a lower freight price than your competition or you can differentiate your service offering by helping shippers manage their logistics smarter and more efficiently. You don’t have to be an MBA to know that pricing is not a sustainable competitive advantage, which is why I’m frequently shocked when I come across prospects failing to embrace this change, asking questions like “Why would I want to give my customers visibility? That would confuse them. We sell freight, we’ll leave the technology to someone else." Sigh.
Thankfully, for my sanity, not all sales conversations go this way. And there are many logistics professionals at organizations small and large leading the charge to digitalize their business. These leaders are putting in place a technology backbone that will allow their company to become more than just a provider of freight or logistics services, but a guide to their customers logistics and supply chain operations - helping to automate and digitize processes that will enable their customers to have network wide visibility and achieve greater operational efficiencies and cost savings.
Benefiting from Digitized Logistics Management
One example of a logistics provider who has a forward thinking mindset is Whale Logistics. Whale is a full-service freight forwarder and since being founded in 2015, have built an enviable reputation as a leading provider of innovative and cost-effective supply chain solutions through the Asia Pacific region.
With Gravity’s cloud based white label solution Whale is offering their customers:
- enhanced offshore supplier collaboration
- streamlined purchase order management
- real-time inbound to warehouse visibility
- powerful reporting and exception management capabilities
Ryan Cummings, Founder and Managing Director of Whale describes the business as a “freight forwarder of the digital age”. It’s this mindset that is setting the Whale brand apart from other traditional freight forwarders.
Embrace Change or Embrace Failure
By connecting their global supply chain networks through cloud technology, Whale’s customers will enjoy a single global view of their suppliers, data, and movement of goods. For Whale, this means adopting a new sales approach which elevates their service offering above traditional freight forwarders . Now they can sell on visibility and transparency so the customer forgets about whether he’s going to pay fifty dollars more or less between Melbourne and Shanghai.
If you are working for a traditional freight forwarder stuck in the old mindset of competing on freight costs, there’s still time, however the next two to three years are critical for the business. A handful of Gravity’s existing customers started their search for a visibility solution only after losing a major customer. And I’m sure you’ll agree, that’s much too late. So break away from the familiar and embrace the change that is undoubtedly happening in the logistics industry. Even if it’s painful to put up the time and political capital, it’s necessary if you want your business to be around in 2020.