Value-added digital services like payments solutions and trade financing gain favour
The global multi-modal logistics player and the world-leader in less-than-container-load (LCL) ocean freight consolidation, ECU Worldwide (wholly-owned subsidiary of Allcargo Logistics), has launched an in-depth survey ‘Freight Forwarder Survey Health Improvement report 2023’. The extensive report covering nearly a thousand commercial freight forwarding companies underlines the urgent need for value-added services and digitalisation to boost their profitability.
Tim Tudor, CEO, ECU Worldwide, said, “Pressure on margins is here to stay as new challenges emerge. The industry-defining second edition of this study is ECU Worldwide’s attempt to focus on the ways forwarding companies can create value along the supply chain for their shippers, safeguarding their profitability. A tech-powered ecosystem will unlock transparency, new financial solutions, and dependability in global supply chains.”
To stave off these pressures, the study delineates two key differentiators: Offering a central console for digital quotes, booking and end-to-end shipment visibility, and ancillary services such as trade financing and payments solutions.
Key Findings:
- By the end of 2023, 70 percent of freight booking is expected to be done through apps and portals, compared to the current 35 percent.
- Nearly 50 percent forwarders still serve trading and manufacturing industries, but e-commerce is catching up as a major shipper category.
- Ocean freight dominates the category, offered by 96 percent forwarders, and air freight by 60 percent of forwarders.
- Declining freight prices last year have led to lower arbitrage profits and greater margin-pressure.
- Around 25 percent of the forwarders view value-additions as important to their business, and digital quotes and bookings, and tracking solutions remain the top two valuable services for forwarders.
- Trade financing and payments solutions have gained in prominence as value-added services for small forwarders in 2023.
- While app and portal for customer interface are the future, almost 50 percent of freight bookings are still done through emails, hence, email integration with booking systems is important.
- Small and medium forwarders lack the wherewithal such as knowhow, training, capital, and infrastructure to graduate to digitalise and move up the supply chain for their customers.
Philip Blumenthal, CTO, ECU Worldwide, said, “Our study analyses the latest trends in Freight Forwarder operations and the challenges they encounter in their day-to-day activities. The complex coordination between carriers, shippers, logistics providers for ocean freight can be improved by adopting technology for visibility, bookings and quotes for freight forwarding, making for an efficient supply chain, both downstream and upstream.”
Digitalisation’s transformative power can be seen in ECU Worldwide’s proprietary and brand-neutral platform, ECU360, which delivers end-to-end logistics support and tracking, cost-effectively to freight forwarders and SMEs to unlock growth.
The ‘Freight Forwarder Survey Health Improvement report 2023’ report reached out to 963 commercial freight forwarders across the Americas, European Union, and Asia-Pacific for a comprehensive understanding of the pressing concerns of one of the key support systems of global logistics. The key takeaway, this year, is how crucial digital bookings and value-added services are becoming to help maintain margins for such companies, irrespective of size.
