„Many forwarders don’t realize it, but they are holding loaded dice – a lucky four-sided dice – that will land in their favor if they throw it now” says Steve Walker, a former DSV board director and advisor to many BCOs, Forwarders and online freight companies. According to him, the four-sided dice represents data, innovation, compliance and embracing technology. Big Data is the most critical asset! “While forwarders will hold decades of their customers’ trading data, it is almost inevitable that they will have done nothing with them or have any plans to exploit them” he continues. But how do forwarders make use of big data in shipping? “All we have done is offer our TMS track and trace function, often with information or reporting gaps that have been overcome with back-office data-entry”. We interview Steve Walker to find out how you can leverage big data in shipping to stay ahead of the competition.
Historically, the forwarders success was largely defined by the relationships it developed with the shippers and carriers! How has the situation changed?
Unlike days gone by, when the shipping department was an undervalued operation, which struggled for any internal recognitions. The shipping and supply chain function of today is valued by most business owners as a critical function, which can create competitive advantage. This advance in the supply chain profession has largely mirrored the advance of digitalisation and the transparency of information, which means that shippers have never been so professional, or well informed.
This is a challenge and opportunity for forwarders. A challenge because the sharp practices and lazy solutions the old-fashioned forwarders thrived on, are no-longer feasible, or desired by a forwarding community that is itself far more transparent and professional than ever, which gives rise to the opportunities. Professional customers recognise and value multi-layered solutions to complex issues, which provides forwarders opportunities to deliver more value, create new revenue streams and bind customers closer. The forwarder, carrier relationships have not undergone any profound change, but carriers are once again working actively to encroach on the forwarders territory and deal with shippers directly. Most obviously through digital rate and booking portals.
How do forwarders meet to make usage of big data in shipping in order to stay ahead of the competition?
Forwarders have the customer shipping data, and there is real financial value in that data, but there is no collective voice for transforming this data. Without direct action by FIATA forwarders needs to forge links with a neutral body such as Container xChange, or create their own moderated forum where forwarders, Customs, banks, shipper organisations and governments can work together to define an acceptable platform for secure data.
How can SMEs identify where the real innovation and ROI is going forward? Should they invest in their Transport Management Systems first?
It is very hard for SME’s to see what ROI they may achieve by implementing supply chain management tools, or digital interfaces, or online rate platforms. By integrating their TMS with readily available 4PL software, they can add defined revenue streams and guaranteed margins, by offering their customers complete digital control of their supply chains, encompassing all carriers.
With all the millions they received in funding, digital forwarders attack traditional forwarders for their market share. Who do you think will win?
Ultimately it is the customer that will win, as they have more choice. All forwarders are digital really, it’s simply that some new entrants have a lead with their software offering. But that advantage will quickly fade, as their offer is copied and, inevitably, another entrant will emerge, with even better software. It’s simply competition, that good products, branding, customer service and marketing will overcome.
Newly established Digital Container Shipping Association tries to create data standards in shipping. What do you think needs to happen to achieve data standards in transport and logistics?
The EDIFACT standard from UN/CEFACT is still the de facto standard for data exchange. A mix organisations are working on the next generation of standards including openshipping.org, UN/CEFACT, Smart Containers, and the EU funded CORE project. Leadership to build consensus will ultimately be the critical success factor.