Post COVID 19: Acceleration in Digital Transformation - The New Normal for Freight Forwarders

The business disruptions caused by the COVID-19 pandemic opened up a new challenge for all businesses worldwide, the requirement to digitize processes. When the pandemic had just started, the everyday operations and activities of the global freight forwarding industry were tormented and disrupted. Subsequently, this accelerated the digital transformation in supply chain management and helped businesses meet many new demands thrive during the pandemic.

Andrew Tunnicliffe writing in Ship Technology says, “There have been many losers during this pandemic. It’s fair to say a plethora of global industries is, if not failing, struggling to adapt to the current environment. Among those industries are individual casualties, the businesses that simply did not have the capacity, capability, or strategies to survive. Even for those that did, this period has been one fraught with difficulty and danger.”

COVID-19 affected the industry in a way no other crisis could. The last year saw some major impact befalling the logistics industry. During the pandemic, consumers have moved dramatically toward online channels. The companies and industries that were technologically prepared with cloud technology and virtualization adapted and responded to the crisis by shifting towards interacting with customers through digital channels and managed to survive the blow.

The disruptions brought by the spread of the novel coronavirus and the shutdown of businesses, especially in the logistics industry, accelerated the digital adoptions immensely. It forced forwarders to look into new strategies and digital solutions to continue to communicate, collaborate, complete work and function remotely and continue to serve their client base. Exploring many of the changes that have impacted the businesses required freight forwarders have to embrace the digital transformation and develop a better commercial strategy will significantly help them be ahead in the new race, in the “new normal.”

Digitization has been a much-talked topic in the freight forwarding industry for a while now. Even before the COVID-19 pandemic, digitization in the logistics industry was talked about as being an essential aspect of the sector. Digitization in the logistics industry is usually grounded on three actions. Firstly, the adaptation of business models that would help ease the operations—secondly, digitization of the main business areas like documentation, communication, etc.—and thirdly, building a robust digital base by updating the systems to enable quick solutions. The growth of digitization in the industry had nonetheless been slow. However, for the first time, due to the coronavirus pandemic, freight forwarding companies have realized the importance of technological innovations and technology and the need to transform into digital freight forwarding companies. Jeff Wehner, co-founder of freight logistics automation company, Haven Inc. argues that the drive to digitization is happening now faster than ever. According to Jeff Wehner, “The big change to the market is that everyone now realizes the criticality of digitalization. With staff working from home, forced to be virtual full time, companies have realized the incredible power of technology.” He also points out that firms have now finally realized that they could no longer depend on locally saved emails and spreadsheets or systems that do not support interconnectivity. Moreover, human errors sometimes cost significant money, and big firms cannot afford this misinformation. By digitizing your operations, you can also get complete transparency to address issues you would not have known about otherwise.