The Digital Contradiction
In the digital age, it’s easy to assume that all industries are racing to become fully digital. It’s an all-in race and the tech companies (yes, like us) are beating the drum hard. But what if, despite huge progress – dozens of digitized carriers representing over half of air cargo capacity, hundreds of thousands of real-time bookings, more and more solutions built around it – what if…we admitted that today, right now, it’s not really digital. Or, rather, only a small percentage is. Yes, a peek beneath the surface reveals a more realistic story: vast stretches of the logistics sector remain untouched by digital transformation. In some cases, there is siloed digitization (a few modes digitized, parts of the customer engagement or specific providers) and in others, analog processes are entered online (AWBs) but, in most cases, if you throw a dart at a board with a few hundred shipments, it’s almost certainly one that has many, many analog interactions.
Digitization is underway…but it happens slowly. And this isn’t a shortcoming; it’s an opportunity.
Understanding the Slow Dance of Progress
Transformation in mammoth B2B sectors is akin to turning a massive ship—it’s deliberate, meticulous, and sometimes, slow. Actually, it’s almost always slow. The massive industry benefited from early semblances of digitization, like EDI, which helped stave off more substantial digitization. Early attempts at digitization have laid the groundwork, but full-scale adoption takes time. The key lies not in obliterating the old but in complementing the old with the new. We need to recognize that we can’t wish digitization into happening or force it overnight. It takes time and happens piecemeal, across modes, geos, aspects of user engagement and many, many more dimensions.
I can’t emphasize how important this realization is. VC dollars and software can’t turn the industry around overnight…or over-year. So we can’t just herald the digital era without embracing the historical analog functions. Tech players need to ensure that the transition respects and uplifts the existing infrastructure.
Here are a few practical examples of where fully digital solutions, which require end-to-end digitization – just don’t work…and how we’ve worked both together and around them.
Custom Quoting: Embracing the Digital-Analog Mix
What it means: Not all rates are available digitally, in real-time, from airlines or ocean liners. In some cases, even contract freight rates under management don’t fit specific quote requests. In order to bridge that, we also enable forwarders or BCOs to request custom, not digital quotes that their providers can then generate. It’s a quote that leverages the digital wrapper but recognizes the non-digital rate source.
Digital innovation doesn’t always mean the eradication of older methods. It’s about finding a commercially harmonious blend. While we’ve made significant strides in digitizing with leading carriers, the reality is that a sizable segment remains analog. Carriers representing half of global capacity digitized, means that half are not and, of course, even those that are still have huge, sometimes the majority – of their pricing, capacity, and booking taking place either offline or in disparately siloed platforms. Recognizing this, Freightos’ solutions create digital footprints for traditional practices, creating structured custom freight quote requests that happen inline with the digital process. This not only enhances analytics but also empowers businesses to make data-driven decisions even when working within analog methodologies and process.
Messaging: Seamless Conversations in a Digital World
What it means: Ship happens. And since there is a huge range of what can go wrong before, during or after a shipment, the conversation can’t always be structured. Messaging enables unstructured conversations to be associated with specific shipments so that providers and customers have a seamless, single-source-of-truth views.
In a sector as dynamic as logistics, communication is crucial. Yet, every conversation doesn’t fit the digital mold. “Where’s my freight?” can be answered with a map and a milestone but freight is complex and it would be wishful thinking to try to automate everything. By fusing digital tools with analog-style messaging, we’re ensuring that every piece of information, every query, every assurance, finds its rightful place in the digital tapestry, ensuring smooth operations and enriched client relationships. All inline with the initial digital booking.
eBooking: Harmonizing Static and Real-time Systems
What it means: Global freight rates may be going digital but the vast majority of shipments that are booked still depend on negotiated contract rates. Since it’s incredibly important for forwarders to take those into consideration, WebCargo seamlessly melds contract rates with dynamic eBooking, allowing quoting across all.
While real-time digital pricing is a proven game-changer, static rates under management in WebCargo’s air freight rate management solutions increased by 33% between 2022 and 2023, underscoring their continued relevance. The message is clear: in the world of logistics, both static and dynamic systems don’t just coexist; they thrive in a symbiotic relationship where each system bolsters the other, ensuring businesses have the flexibility and toolkits they need to succeed. Freightos & Webcargo began managing freight rates for forwarders over a decade ago and we intend to be doing so in ten years. Contract rates and dynamic rates will coexist. We enable the carriers who offer digital contracts, to distribute those directly to their customers but digital pricing and booking – today – will always be a fraction of a forwarders’ job. Both are key. The balance might shift…but it’s not going away.
Copy-paste Solution: Simplifying the Complex
What it means: a digital booking typically originates from a non-digital customer request, or at least a request that doesn’t take place within the provider’s platform. This feature makes it simple for a forwarder to copy the spreadsheet row or email and just paste it into the search screen, where it is automatically converted into the relevant search terms.
One of the challenges of digitization is the translation of unstructured, analog interactions into a structured digital format. By offering technology solutions that transform such interactions, we’re not just digitizing; we’re revolutionizing. Turning an email into a structured quote is more than a technical feat; it’s about capturing and preserving the essence of traditional business interactions. This feels simple but it’s not – it’s a bridge from unstructured email communication into true digitization while enabling the human engagement to reign at the center of the forwarder and and BCO relationship.
Towards a Harmonized Future: An Action Call for the Industry
The path to digitization doesn’t have to be a disruptive force that tears down the old to build the new. It’s a nuanced journey where respect for tradition meets the embrace of innovation. For logistics firms on the cusp of their digital journey, our story serves as both inspiration and a roadmap. Prioritize understanding over haste, integration over replacement, and always, always keep the needs of your clients and partners at the core of every transformation.
Freightos Group is here to support your strategic leap into the digital first world, while enabling your teams to spend their precious hours on the most valuable task: putting the customer at the center of your value proposition.