Air freight and the world of digitization

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This recent article by McKinsey touches upon many of the challenges and disruptors that are affecting the world of supply chains. There are some very accurate and noteworthy points within the text, and admittedly, I agree with many of them. Disruptors are everywhere, especially in the world of freight forwarding. 

These new companies are appearing in the form of technology-based business models that look to break into the forwarding world by offering technology products and services, like rating and routing optimization and e-booking capabilities.

In other words, they want to bring Travelocity and Orbitz to the freight world.

The article also highlights some other important aspects of how it is difficult to go fully digital: Freight is more complex than passengers ("self-loading intelligent cargo"); Physical cargo requires physical handling; Humans are still needed to resolve issues and deal with delays and other supply chain complexities; Traditional forwarders can still take advantage of bundling freight and using economies of scale to offer lower freight rates to shippers, something digitization has not yet mastered. So looking ahead to the future, I believe the true winners will be those forwarders that can offer shippers a hybrid model combining the best features of digitization along with the best features of traditional forwarders.  

Cargo Plane

For as much as air freight technology has improved, with better planes, better warehousing technologies, and industry movements like e-AWB and e-manifests, there is still a lot that has yet to evolve. Industry regulations surrounding dangerous goods, governmental regulations and requirements, handling requirements for complex products like pharma / perishables, as well as ever-evolving regulations for things like lithium batteries, will always take some level of human expertise and interaction. Traditional forwarders must embrace technology in both back-room processing as well as customer facing. Today’s world relies on smartphone apps and quick click websites to find the best deals and most up to date information, and traditional forwarders need to embrace the same type of mentality in designing their own technology.

At the same time, traditional forwarders must also remember the human side of the business as well. Having an actual person answer the phone when a customer calls, physical handling and consolidation of cargo, issue resolution knowing that "cargo never takes a vacation," and intellectual capital for complex regulatory compliance, are all things that will always be at the heart of traditional freight forwarders' offerings.