What is digital freight forwarding?

Digital freight forwarding is the practice of coordinating and controlling the shipment of goods using digital technologies. By automating involved tasks, digital freight forwarders are able to offer a more efficient and cost-effective service to shippers. Companies that need to ship goods, whether it is a regular shipment or urgent, can manage the entire booking process by themselves. They can get a view of the available loading capacity without the need of a third party. Shippers insert their transport request, receive solutions and prices within minutes, and instantly select and book the best solution.

Difference between traditional and digital freight forwarding

The main difference between traditional and digital freight forwarders is their way of interacting with both shippers and carriers. Traditional freight forwarders act as a middleman between shippers and carriers. They mainly use phone calls and emails to communicate shipment quotations, bookings and status updates. The freight forwarder compares quotations of carriers and offers the best one to the shipper. This process can be time-consuming and more prone to error. When the shipper agrees upon the quotation, the freight forwarder needs to react fast to book the transport solution. Next to that, traditional freight forwarders often rely on the manual process of creating freight documents.

Digital freight forwarders use technology to deliver a seamless customer experience and to optimize business operations. By eliminating the need for intermediaries and automating manual processes, shippers can interact directly with carriers. This enables faster and more efficient operations. Digital software systems such as freight forwarding platforms offer instant quoting, transparent pricing, and online booking. In addition, these digital tools often offer automated documentation, visibility on real-time capacity and shipment tracking. Shippers and carriers can upload and share all documents on one single cloud-based platform, providing easy access for all stakeholders.

What are the benefits of digital freight forwarding?

Digital freight forwarding can be faster and more efficient than traditional freight forwarding, and less prone to errors:

• Efficiency & fast response time: by automating the freight forwarding process can help reduce time to request, book and track shipments, as well as integrating financial systems. Quicker quoting processes, seamless documentation handling and automated invoicing improves efficiency.
• Cost reduction: less need for manual labor and time can save on labor costs. Also switching to electronic documentation and invoicing can contribute to a cost reduction.
• Customer service: be able to provide real-time and up-to-date information to end-customers about their shipments 24/7. It provides transparency in available solutions and prices.
• Visibility: real-time tracking information improves the visibility of each shipment. The shipper stays informed about each stage of the transport. The recorded data can be used for reporting and business analytics. Analyzing data can provide valuable insights for better forecasting.

Digital freight forwarding in time-sensitive delivery

When it comes to urgent and unforeseen transport needs, speed and reactivity are crucial.A digital freight forwarding platform can support shippers and carriers in overcoming logistic disruptions. If you’re looking for a digital freight forwarding platform that is specialized in handling time-sensitive shipments, check out our Shipper Portal. With over 40 years of transport experience we’ve developed a seamless platform that adapts to the custom needs of your shipments. Feel free to contact us, we’re happy to provide you with a short demo and answer any questions you might have.

Businesses and nations are looking for ways to become more resilient and secure their supply chains. The global disruptions of the past 2 years shows the fragility of offshoring. From semiconductors, to farming materials and food supplies, shortages affected all industries. In an attempt to prioritize supply chain resilience over costs, many corporations are looking into reshoring: nearshoring and friend-shoring. What do these terms imply, and will these fix the weaknesses in the supply chains?

Offshoring

It all started with offshoring in the 1960s by which companies started to transfer the operating activities (mainly manufacturing) to other countries or overseas. With this business operations model, corporations moved partly or completely their operations abroad in order to reduce costs and increase profit margins. The reason to offshore was mainly because of lower labor costs (access to larger workforce), closer proximity to raw materials and more favorable government and regulatory policies. This was the start of economic globalization in which businesses produced and bought products where costs were low. And in a world where goods can be moved faster and cheaper. Will the opposite now be set in motion due to the numerous supply chain disruptions that occurred in the past 2,5 years?

The mentioned disruptions have shown the disadvantages of offshoring – with long and complex supply chains. In order to overcome these vulnerabilities, many businesses as well as governments are trying to regain resilience via policies, incentives and by reviewing current processes. According to an article by Deloitte many businesses are looking into reshoring their critical supply chains.

What is Reshoring?

Reshoring is also known as nearshoring, inshoring and backshoring. It is the opposite of offshoring. Reshoring emerged as an alternative strategy for companies by bringing operations back or close to the core country – shortening their supply chain and mitigating risks. Shorter supply chains are easier to manage and more durable. Bringing at least part of the manufacturing back home or changing to local suppliers provides more flexibility and control. Companies are eager to increase their resilience, even if it lowers efficiency.
But not all supply chains can be reshored. For example, critical scarce resources that can only be sourced at a few locations in the world, such as lithium for batteries of electric vehicles. Or specialized knowledge and equipment for manufacturing semiconductors. And some industries are just too complex to replicate locally, such as electronics.

Friend-shoring

It is important to mitigate risks of supply chain cuts from single source countries and rebuild strategic relationships. Therefore nations seek to establish a network of trusted suppliers from friendly and stable countries (with similarity in strategic and geopolitical interests) called “friend-shoring”. By completing national supply chains with a diverse set of trusted international suppliers, nations can improve their resilience. According to an article of the Wall Street Journal countries around the world are looking for friendly supply routes. It is described as “a new kind of global trade, one that confines commerce to a circle of trusted nations”.

Are reshoring and friend-shoring the solution?

In general, changes in supply chains happen continuously. According to an article of ING, the past global events show a trend towards more self-sufficiency. Also the recent regulations, such as the Supply chain due diligence act prepared by the EU, seems to favor the concept of friend-shoring.

However, in general there seems to be a shift towards supply diversification. It has become more important to extend the amount of suppliers in different countries for security reasons. Even if it implies more costs and losing competitive advantage. 

According to the ING, there will be more self-sufficiency initiatives taken in Europe and the US for risk reduction and diversification, mainly in strategic sectors. Supply shifts from China to other Asian countries are occurring, as well as more inventory building strategies relating to the “just-in-case-model”.

What can companies do next to diversifying their suppliers?

Companies and governments can take the following steps to build resilience:

• Collect supply chain data:  gather and monitor data of your supply chain from beginning to the end to improve visibility. Evaluate the suppliers from the sourcing of raw materials until the end product or service.  This overview will help you to expose where possible weak spots lie and makes it easier to take precautionary actions. 
• Make use of multiple transport suppliers to spread the risk and secure flexibility. Cover both your regular transport needs as well as your  time-sensitive shipments. Make use of specialized time-critical transport services.
• Embrace digital platforms: to assist in digital and real-time monitoring and transparency. Digital platforms enable you to search and compare the available transport solutions in real-time. At the same time,  you can collect relevant data on your past shipments creating transparency and full visibility.
• Just-in-case inventory management: build up precautionary stocks or diversify suppliers to be prepared for times of scarcity and disruptions.  

If you are looking for an easy to use digital platform that allows you to find, compare and track transport suppliers, please check out the services of our Shipper Portal. The platform provides visibility and flexibility for your supply chain, regardless of changing strategies or global developments.

A combination of phenomena has driven up the prices of European freight transport. It includes the shortage of equipment and drivers, rising labor costs and a sharp rise in fuel prices and other commodities. ‘Several economic instances and analysts predict that we have not reached the peak yet. We miss a common insight and certainty of factors that will regulate themselves versus the ones that are here to stay’, says Gianni Maes, Chief Sales Officer.

We can compare the industry with an ecosystem with several stakeholders going from Shippers over Forwarders to Carriers and their Drivers. During a period of economic prosperity there has been a huge focus on cost optimization. The lower levels of the ecosystem have suffered the most from this.

As a result, the profession of being a driver has become less attractive. This has lead to a driver shortage of nearly half a million within the EU. Carriers are confronted with other operating cost increases stemming from fuel prices at the pump, increased costs related to their equipment and newly implemented legal requirements compliant to the EU Mobility Package.

Due to the mid-long term uncertainty of these effects, how can we support shippers and carriers? We are convinced that only through constructive and close cooperation between Shippers and Forwarders, we can get through these challenging times. A shippers’ main concern is to keep their businesses going. We have recently seen a shift to spot shipping in order to secure capacity at the best possible price at this moment in time. 

How can Redspher support Shippers and Carriers now and in the future? 

On Redspher’s platform Shippers get direct access to compliant and traceable carriers. These carriers offer their solutions within minutes after publishing the request. Shippers can make the choice outweighing price vs transit time.

Within Redspher’s Private Marketplace Shippers can add their own existing forwarders to the invited pool of vendors to obtain even more solutions. This month to date over 70% of all requests got more than one solution offered. In 84% of the cases the request also turned into a booking.

With these two business models,  Redspher facilitates in a seamless manner a fast and efficient process to Shippers to know their options at the blink of an eye  for their unexpected delivery needs.