Traditional Freight Forwarders Remain Successful in the Market

Digital platforms promote market transparency and can contribute to the efficiency of logistics processes in selected sub-markets of logistics. However, they will not dominate the entire logistics market. This was the conclusion reached by the highly attended expert panel of the virtual forum ‘Platform Economy – Freight Forwarders of the Future’ organized by the DSLV Federal Association of Freight Forwarding and Logistics at this year’s leading trade fair transport logistic.

(Berlin) For the success of platforms, in addition to a high volume of shipments and loads, uniform data formats, standards, and industrialized processes are fundamental prerequisites. It will not be easy for rapidly growing and financially strong digital freight forwarders to enforce these unilaterally in logistics markets against the shipping economy from industry and trade. The market is too shaped by a multitude of logistics service providers offering individual solutions to their heterogeneous customer groups. The transport and logistics market is far too fragmented for monopolistic structures to be established, as the unanimous discussion result indicates.

The strengths of established freight forwarders remain their experience in supply chain (event) management – that is, flexibility and knowledge that technology alone cannot replicate and on which platform operators will also depend in the future. The freight forwarding world of the future will not be an either/or, but rather a combination of both worlds. Established freight forwarders and digital market companions can learn from each other. Freight forwarders will not become obsolete in the future. Rather, they can expand their business models through platform solutions with additional service offerings.

High Degree of Digitalization in Logistics

“Digitalization plays a crucial and market-relevant role in logistics – it is growing evolutionarily and almost silently. Established freight forwarders are increasingly evolving from pure software users for scheduling and route planning to logistics service providers with largely digital processing of most business transactions,” describes Frank Huster, Managing Director of DSLV, the current situation. He continues: “The degree of digitalization in the logistics industry is already high and continues to grow. Those freight forwarding companies that can combine market knowledge, specialized know-how, and individual customer proximity with digital performance capabilities will remain marketable – in other words, hybrids. In contrast, purely digital freight forwarders and platforms will primarily unfold their strengths in standardized and automated transport processes, such as in FCL markets with cargo traffic, and gain market shares here.” However, this also creates the greatest pressure on the traditional freight forwarding and transport world. The capital strength of new market players combined with automated scheduling processes not only changes freight rates but also the margin structure.

A Long Way to Go for Platforms

The path to cross-platform freight ecosystems, which could contribute to overall economic solutions such as avoiding empty runs and CO2 emissions at the European level through data collection, is still considered to be long. The lack of trust in the protection of one’s own company and customer data significantly hinders the interoperability of platforms. Additionally, the absence of standards and the heterogeneity of logistics processes remain obstacles.

On May 6, 2021, the relevance of platform models for the future of the freight forwarding world was discussed at the DSLV forum with Silke Fischer, Head of Global Product Management | Sea Freight at Lexzau Scharbau GmbH, and Kerstin Wendt-Heinrich, Managing Director of TOP Mehrwert-Logistik GmbH, two executives from established freight forwarders. David Nothacker and Maximilian Schaefer are co-founders and managing directors of the digital freight forwarders Sennder and InstaFreight, while Dominik Dieckmann (Senior Manager / Key Account Director Freight & Logistics at Accenture) acted as a neutral expert on the panel. The forum was moderated by Frank Huster, Managing Director of DSLV.

The forum can be viewed here until May 21, 2021.

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