© Daniil Peshkov man vs computer
© Daniil Peshkov |

Digital disruptors are whittling away at the skills base of traditional forwarders, without providing a suitable alternative.

This is the view of Tuscor Lloyd’s general manager Neel Ratti, who was speaking on a panel at Multimodal 2018 last week.

“We are definitely de-skilling the market – but do any of us think for one minute that Amazon has replaced everyone with computers? No,” said Mr Ratti.

“There is a need for human interactions that we are forgetting as we have become overexcited at the prospect of digitisation.”

Mr Ratti added that digital forwarders and online booking platforms should not be seen as a panacea.

Instead, he said they should focus on “simple” shipments requiring instant pricing.

But Freightos chief executive Zvi Schreiber questioned the way forwarders traditionally do business.

“For modern, younger shippers there’s no longer a want to deal with the sales teams,” said Mr Schreiber.

“Nor do they want to play golf with anyone. They want to go online and book the shipment. That’s all.”

But this mindset, said Mr Ratti, ignores the needs of many shippers who have more “bespoke” shipments where a “one-size-fits-all” solution would not work.

“What about these more bespoke options? The example I use is a travel agent – there are some things you can’t get when booking a holiday online,” he continued.

“Sometimes, you need someone on the phone, so for me, the idea that these platforms are disrupting the market is inaccurate: they are augmenting it.”

SWG chief executive Steve Walker struggled to refrain from slamming digital forwarders, who he believes have shown traditional forwarders a “fundamental” lack of respect.

Furthermore, he implied that Flexport and its ilk, and the online-only business model, had been “found out”.

“Flexport is almost morphing backwards into a 3PL as we begin to see it acquire both assets and offices to handle the needs of its customers,” said Mr Walker.

“A big issue is disruptors thinking they’re changing forwarding, with a disrespectful attitude that reminds me of P&O’s 1980s claims of doing away with forwarding for good.”

Mr Walker, in particular, highlighted the prevalence of this attitude at Flexport, which he said seems to have a “need” to “continuously slam” traditional forwarders.

He added that the problem is not helped by forwarders failing to sell their strengths at a time when venture capitalists are “rushing” to invest in tech start-ups.

“Venture capitalists are flooding the market as they recognise the size of the logistics sector,” Mr Walker continued.

“They know that most companies spend about 5% on logistics and for the investors, this is fertile ground.”

Mr Schreiber said while his company “respects” forwarders, the traditional industry model does not adapt to the needs of its younger customers.

He suggested that – at least as far as Freightos is concerned – any comments made were merely to “point out defects” rather than to cause insult.

“We may point out defects in the present operating models, but I would say it is in no way disrespectful to do this,” said Mr Schreiber.

“It’s important that they understand what the younger generation are asking for, and sometimes this needs pointing out to them.”

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  • Miles Varghese

    May 11, 2018 at 3:12 pm

    Typing used to be a skill. Now it’s a standard. And not done on typewriters anymore even though that also can get the job done. It’s lack of efficiency and modern personal computers that killed the typewriter.

    Technology is a democratizing force in general – lowering costs and allowing more access.

    When was the last time someone used a travel agent? I’m 31, and I’ve never done so in my entire life. I have used Priceline, Travelocity, and the other OTA’s though. And of course there will be fringe cases – there will always be fringe cases where they’re valid, and that’s what the industry faces now.

    Either specialize or get disrupted is a mentality all forwarders should adopt. Differentiate or die. And if you’re a corporate, innovate or die. Startups only “start up” once they uncover a gap in the market between what the incumbent providers have been doing and what the new market wants. It’s on traditional forwarders to understand their market and their customers, and if they don’t, they will lose their business.

    It’s certainly not a “lack of respect” or the “venture capitalists” themselves smell the massive opportunity and investing in these organizations. That’s false blame.

    Mr. Schreiber’s points are the most valid in this article in my opinion.

    (Please Note: This is personal opinion. I am biased towards tech in that I work for young maritime innovation company focused on modernizing port terminal operations.)