News / E-commerce will benefit the smaller, local forwarders that can deliver

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E-commerce has become the biggest driver of change for freight forwarders –some seeing estimates of 30% growth, year on year.

Head of the WCA e-commerce network Alex Allen said the sector had mushroomed over the past five years, far exceeding the growth of traditional freight movements.

“Growth has been happening over the past 10 years, but gaining real traction over the last five, with incremental growth as a global aggregate roughly 30%,” said Mr Allen.

“The emergence of cross-border e-commerce will provide opportunities to all players in the field, provided they have made, or are making, the necessary changes required to evolve.”

However, Mr Allen said with the majority of a complex cargo industry “quite fragmented”, it tended to be reactive to changes. He believes this will lead to supposed “slow movers” being left behind in what he describes as the race to enter the new economy that will lead to longer-term survival.

“The biggest challenge the industry faces is not understanding the exact needs of the clients – the guys causing the shift and generating new e-commerce volumes,” explained Mr Allen.

“The e-tailers measure success around the first delivery, especially when it comes to the likes of Amazon Prime which talks of delivery within hours of receiving the order.”

This presents smaller operators with opportunities, while Mr Allen suggested that the more mature providers were still struggling to understand the market.

In particular, he said, there is a chance for forwarders to provide cross-border solutions with a “local flavour” and expertise in their own regions to capture gaps in the market.

“They are closest to customers in a majority of cases and can provide flexibility in scale and service better than the big players,” he added. “This will have a positive impact when e-tailers and industry seek to engage with a logistics provider in specific markets in an effort to better service their customers.

“In turn, this creates an opportunity for all kinds of cross-border shipment-processing requirements for a forwarder to provide as value-adds to grow ecommerce business.”