Is digital transformation a threat for Freight forwarders?

08/03/20170 CommentsSEO SEO
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Last January, the giant e-commerce company Amazon took a step further in the implementation of its plan of expanding its services as an ocean freight forwarder, in an effort to cut down on costs of third-party providers and improve efficiency on its delivery operations.

According to the Wall Street Journal, Amazon has acted as a logistics provider for at least 150 containers of goods imported from China.

Once the news was known, a debate took place in the logistics sector about if these new moves from the e-commerce company would affect and even boost the disappearance of traditional freight forwarders, but the opinions are divided.

Wesley Chan, managing director at start-venture capital firm Felicis Ventures, said at a logistics conference in Long Beach that few shippers would want to hand over the sort of product data they would need to if employing Amazon as their freight forwarder.

This is the same opinion of Ryan Petersen, chief executive officer of Flexport -a San Francisco-based freight forwarder- who commented that Amazon’s new services would be more attractive for Chinese sellers than to American sellers because the latter were unlikely to expose key data like wholesale pricing and supplier names to a rival.

On the other hand, there are some technology enthusiastic who think that online platforms can replace manual processes. Graham Parker, Kontainers’ co-founder and chief strategist, said to The Loadstar that the artificial intelligence of Kontainer’s system was capable of dealing with all kinds of exceptions, like weather issues “even before a traditional freight forwarder would even know there was a problem,” even if certain issues would still require a human element.

Other companies in the shipping sector such as Maersk Line and CMA CGM have joined the digital trend and signed cooperation deals with Chinese e-commerce platform Alibaba to provide online booking services for Chinese exporters.

“The initial launch …allows existing Alibaba OneTouch (registered) users to lock in the price of required cargo spaces on selected routes by pre-paying a deposit amount,” said a Maersk spokeswoman.

Amazon has also created an in-house air transportation network through lease agreements with Atlas Air and Air Transport Services Group. A fleet of 40 Amazon cargo airplanes will carry some of its international and express packages. The company is also testing the use of drones for last-mile deliveries of merchandise. According to CityGroup these solutions would save Amazon

What do you think?  Are online platforms replacing freight forwarders in the future?


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