To ensure smooth, efficient operations, freight brokers and 3PLs must utilize innovative strategies to engage with customers and carriers.
FREMONT, CA: It has taken forwarders and brokers to their limits over the past two years due to global supply chain pressures, including the e-commerce boom, worker shortages, geopolitical conflict, price squeezes, carrier capacity crunch, and customer expectations of a more data-driven digital experience. To survive, they must change their strategies, tactics, and technology.
In the face of future supply chain complexities, the forwarder and broker community continues to adapt their practices, processes, and technology adoptions to manage them better.
Shifting industry landscape: According to the Seventh Annual Broker and Forwarder Benchmark Survey by Descartes, pricing pressure remains the biggest industry challenge (55 percent). In the survey for 2022, however, carriers' capacity shortage (52 percent), digitization, and customer self-service (39 percent), two new industry issues identified as the second and fourth biggest challenges, respectively, destined to have the greatest impact on the industry in the coming years, were cited as the second and fourth biggest challenges, respectively.
As a result of the pandemic-driven e-commerce boom, the forwarding and brokerage community has felt the effects of the freight management landscape over the past few years, along with industry challenges shaping freight management. According to 66 percent of respondents, B2B and B2C e-commerce customers are using real-time shipping tracking and automated business processes, a 163 percent increase. In particular, the digital shift toward automation had a 72 percent greater impact on Top Performers (i.e., companies with the best financial performance) than on Bottom Performers (62 percent vs. 36 percent, respectively). Direct-to-customer shipping services have also increased with the online shopping boom, impacting many industry players (57 percent) and increasing slightly from last year (53 percent).
Preparing for change: According to the survey, the majority (77 percent) plan to invest in technology to prepare for macroeconomic, regulatory, and industry changes. Over the past seven years, technology investment has been the top and dominant strategy, a 10 percent increase from 2021. Top Performers (85 percent) are even more focused on technology investments than organizations with the worst financial performance. For the purpose of being able to capture a larger share of the B2B and B2C e-commerce market 43 percent of forwarders and brokers are investing in e-commerce technology.
Fueling growth: Despite changes and disruptions in the marketplace, companies can drive growth by streamlining and accelerating forwarding and brokerage processes with automated solutions. Therefore, forwarders and brokers increasingly invest in technology, with 39 percent of respondents describing technology as "fundamental" to their growth strategies.
