British International Freight Association (BIFA) has defended forwarders “tarred as having a reputation as technology laggards”.
The defence follows yesterday’s news that digital freight forwarder Beacon had secured $15m in fundraising from investorsincluding Jeff Bezos, the founder and chief executive of Amazon, and US venture capital firm 8VC.
In a press release announcing the funding, Beacon accused logistics firms of being slow to digitise. It claimed that fewer than 30% of shippers are satisfied with the customer service they receive and that the industry is ripe for [digitised] disruption.
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According to BIFA director general Robert Keen, “digital disruptors will no more kill-off today’s forwarding sector than the advent of European rail did in the 1800s”.
Keen said: “Over the last five years I have read reports that suggest the rise of software start-ups spelled the end for forwarders.
“There’s this idea that if forwarders do not adapt, they will die – but you just need to look back at the sector’s history, it has always adapted.”
Turning to a real-life example of an adapter, Keen said: “One forwarder I know – a family-owned European firm – has in their archive a letter from a great-grandparent proclaiming the company’s demise with the arrival of rail in the mid 1800s… it’s still going strong.”
In short, BIFA disagrees that digital startups “will lead to the death of traditional forwarders.”
Keen said: “It’s a load of rubbish. We have strong empirical evidence showing what [our members] are up to in regards to digital transformation of their role in the supply chain.”
BIFA noted that its members are already developing and delivering technology-led products and services that will meet their customers needs more effectively, enhance their experience and cut their costs.Keen added that what “really irritates” him is software providers “preaching” about systems that will kill forwarders, without recognising that forwarders are already using a lot of them.
He said forwarders are, in fact, “incredibly adaptive” and that there is “evidence daily of freight forwarders developing systems comparable with those of digital disruptors”.
Keen pointed out another real-life example: “A company I visited recently is developing its own integrated solutions. They’re not only hiring forwarders, but software development staff – and our members large and small are making a fantastic effort to embed themselves in their customers’ entire supply chains.”
Keen agreed that there is significant change on the way, but believes that forwarders will be part of an industry-wide global solution to the digitisation process.
“We do foresee a different outlook in the years to come, and there will be changes, but I’m certain there will still be a BIFA, with a healthy membership of freight forwarding companies, in 10 years’ time,” he concluded.
