Freight Intermediaries refine the art of orchestration: Part I

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While a bevy of high-tech outfits have threatened to disrupt the current freight forwarding marketplace with their digitized offerings, established players are hardly standing still as far as innovation is concerned.The modern freight forwarder must become a logistics “orchestrator” as new technologies are introduced and adapted by all modes in the supply chain, contend the thought leaders and analysts who are watching what is perhaps the most dynamic segment of global logistics management.“Service reliability, space allocation guarantees and a multi-carrier platform have become much more important to spread risks and to avoid supply chain disruptions,” says John Klompers, global head of freight forwarding for long-time player Damco, the third-party logistics subsidiary of Danish shipping conglomerate A.P. Moller/Maersk.To that effect, Damco has positioned itself to compete with scores of upstarts by introducing “Twill,” which enables logistics managers to book, manage and monitor shipments online with a simple keystroke. Analysts say that this response is well timed to address the challenges posed by an emerging class of “digital-first” forwarders, such as Flexport, iContainers, Freighthub, Kontainers, and Freightos.“The forwarding market today is characterized by innovation,” says Cathy Morrow Roberson, president of the research firm Logistics Trends and Insights. “But at the same time, it’s very fragmented. “While we see more consolidation likely, only the smaller companies that are constantly upgrading and investing in their services will continue to challenge the mega-forwarders. It’s survival of the fittest right now.”Accelerated growthThe top global forwarders are hardly idle observers while this Darwinian scenario plays out. For example, Swiss freight forwarding group Kuehne + Nagel is looking for further acquisitions to accelerate its growth even though company record profits.“The logistics business is going through a period of change with mergers and acquisitions on the one hand and digitalization, creating new competitors and new business models, on the other,” says Kuehne + Nagel’s chairman of the board of Joerg Wolle.In the case of Kuehne + Nagel, which is succeeding even in a fractured transport market, it may be easier to imagine a greater level of achievement once new efficiencies are added.“Looking for more acquisitions falls in line with our goal of boosting innovation, resilience and IT competence,” says Wolle. “The ability of older firms to recognize the value of new technology is vital. With it, we can address the demands of a customer base increasingly accustomed to instant price availability.Another example of the evolutionary path being staked out by digitization came about when DB Schenker, a forwarder founded in 1872, invested $25 million for a minority stake in uShip, an online freight marketplace. The deal between the two companies comes in the wake of an arrangement made last July, where uShip agreed to develop “Drive4Schenker,” an online trucking platform.Tomorrow: Solving the global puzzle

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