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Survey: Automation Coming to Shipping, Enhancing Customer Service

The digitization of pricing and payments for freight shipments, while meant to shave costs, will also have the somewhat unintended consequence of greater customer service.

That’s the synopsis of a recent survey of 70 major freight forwarders conducted by freight pricing provider Freightos focused on the digitalization trend and its potential impact on the global cargo market.

Among the key findings of the survey were that while freight forwarding is predominantly a manual business today, in five years, 74 percent of those polled believe it will be largely automated, similar to personal banking.

Roughly 57 percent of respondents said shippers are driven by price in choosing forwarders today, but by 2022, they believe that will decrease to 35 percent, while the importance of customer service in selection will grow from 11 percent to 28 percent.

The  survey asked respondents to drill down on what service differentiation means to them. Two of the four factors were value-added services and the other two were customer-service oriented. According to the results, relationships clearly matter. Forwarders rated the value-added services as less critical for differentiation than customer service.

Forwarders defined “service differentiation” as customer service (77 percent) or seamless operations (63 percent), not the scope of actual services. However, this differentiation doesn’t necessarily relate to personal touch. For instance, while 77 percent of those polled agreed that the personal touch is critical to the freight market today, they believe it will decrease to 54 percent by 2022.

Digitalization paves a cost-effective path to customer service–as evident in the U.S trucking sector, according to those polled, where customer convenience has driven cost cutting.

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According to the Freightos poll, new technologies like tracking and monitoring can transform traditional freight transportation firms into “omniscient consultants.” That role may expand to collaborating with shippers’ other partners across the entire supply chain.

“Many people have the impression that freight digitalization is about IT, conjuring up images of projects that drag on for years, over-promise, and under-deliver,” said Zvi Schreiber, chief executive officer of Freightos. “IT has since shifted to faster, cheaper and easier implementation, such as the cloud and software-as-a-service applications. But freight digitalization isn’t about IT. It’s about truly understanding core business processes and then optimizing them. For the most part, this means eliminating manual intervention where time is wasted on tedious processes.”

A new procurement market report from global consulting firm Technavio, shows category managers are enlisting the services of freight payment providers that can offer industry-specific expertise and technology platforms that help track shipments easily, ensuring visibility across the supply chain. This report also indicates that the global freight payment services providers are investing in proprietary technology platforms that help to store payment data and generate insights that reduce risks associated with managing large and complex supply chains across different geographies.

Some of the top takeaways from Technavio’s report are that global freight payment services providers are investing in proprietary technology platforms to help store payment data and generate insights that reduce risks associated with managing large and complex supply chains.

Extensive analysis of the demand-supply shifts in the global freight payment services market by Technavio shows that buyers demand automation software for transportation management systems and warehouse management systems to better manage shipments, track utilization, analyze shipping patterns and maintain scorecards on service quality and help reduce the transportation overheads.

Suppliers are also leveraging big data and IoT to develop new services that enhance productivity and reduce cost for freight shipments.

In addition, shipment tracking software will be assessed going forward for more “transportation visibility” to overcome challenges with losing control of payments.

Big money is at stake here, according to industry data, especially in terms of the cost savings potential thanks to digitalization.

Technavio recently quantified potential savings from data analytics, e-freight, web portals, and cloud-based systems, noting that enhanced operational efficiency, on-time delivery, and improved satisfaction could yield up to 12 percent potential savings for forwarders.

Similarly, the World Economic Forum projects logistics savings of up to $789 billion by 2025 as a result of those trends.