Digitization trends in Freight forwarding

Digitalization in freight forwarding industry

In the modern day, digitization has entered practically all commercial sectors. It still serves as one of the main engines propelling the expansion of the modern economic system. Similarly, the global freight forwarding industry is making considerable changes to its operations to keep up with emerging consumer demands and market trends. One can witness the growth and expansion of digital freight forwarding alongside the development of the e-commerce business. Here in this blog, we will explore digitization trends in freight forwarding and its benefits.

Before digging into online freight forwarding, let’s first acquire a fundamental grasp of what freight forwarding is and some of its services.

What is Freight Forwarding?

The strategic planning, coordination, and shipment of goods from one location to another by air, sea, land, or rail transport carriers are known as freight forwarding.

A freight forwarder is an individual who serves as a mediator between the business that ships the goods and their final location. They can be described as people/companies that specialize in providing logistic services to their clients. Forwarders are not responsible for moving the goods and act as logistics experts. They contract with carriers or multiple carriers to move the goods from point A to B. The carriers can expand shipment modes, which include ships, aeroplanes, vehicles, and railroads, and often use ways for a single shipment.

The network is an essential aspect of freight forwarding and shipping container companies. The more the network of companies, the more they become substantial players in the freight forwarding industry. Freight forwarders often have multiple offices across the world. These international freight brokers may be representatives of one company or several businesses that have mutually decided to cooperate to serve the needs of the global freight forwarding market. International freight forwarders generally have a network of offices worldwide that manage shipments and have proficiency in preparing, processing customs documentation, and performing all other activities required in international shipments.

Some freight forwarding services are mentioned below:

  • Assist cargo owners in moving goods from one place to another.
  • Negotiate freight rates with different carriers on behalf of shippers.
  • Some forwarders also provide short-term warehousing services.
  • Track cargo on behalf of cargo owners.
  • Handle custom clearance and other import-export documentation.
  • Reviewing information like industrial invoices, shipper’s export announcement, bill of lading etc.

What is digital freight forwarding?

Simply put, it refers to the use of technology in the freight forwarding sector. It eliminates paperwork and laborious procedures by uploading and sharing essential data on the digital platform, enabling straightforward access and seamless communication to all stakeholders. Using digital tools, freight forwarders maintain seamless communication flow among all container trading stakeholders. With the help of a complete transparent cloud-based system, the forwarders can easily compare shipping rates and provide the best deal for their customers.

The benefits of digital freight forwarding services are:

  • Door-to-door instant quotations
  • Online shipments
  • End-to-end visibility (tracking and tracing your goods)
  • Easy documentation
  • Evaluating analytics and maintaining customer relationships

Factors leading to the growth of digitization in the maritime industry

Expansion of the e-commerce sector

Following the COVID-19 epidemic, there has been a significant movement toward digitization, as seen by the explosive increase in online purchasing patterns. Factors such as easy accessibility, convenient browsing experience, heavy discounts and offers, etc., are responsible for the e-commerce industry’s development and a significant digitization trend in the freight forwarding industry. Today’s e-commerce is not simply confined to a few locations. Instead, it has moved to far-off nations, increasing the demand for skilled logistic services. Thus, online freight forwarding is rising owing to its many benefits to e-commerce companies, such as instant quotations, cost-effective shipments, transparent pricing, cargo tracking, and web-based documentation.

Free trade agreements

Trade across borders has become more straightforward thanks to globalisation, and numerous import and export-related industries have significantly increased. It has become challenging for manufacturers/shippers to keep track of all their domestic and international trade efficiently. This reason has become a leading factor in the expansion of digital freight forwarding. Furthermore, signing free trade agreements facilitates trade activities and boosts the logistics industry’s development. With free trade agreement comes numerous benefits like eliminating or reducing tariffs, property protection and fair treatment of investors. All these factors provide the nation’s economy with countless logistical opportunities to prosper.

D2C e-commerce

The development trajectory for e-commerce enterprises has been steadily rising since consumers continue to appreciate the security, comfort, and convenience that online shopping platforms offer. Direct-to-consumer, also called D2C e-commerce, is a kind of online selling business model where the producer/manufacturer sells their commodities directly to the customers via a web store. It eliminates the need for a middleman/agent, allowing companies to connect directly with their consumers. Digital freight forwarding is growing along with D2C e-commerce as it guarantees that the shipment arrives at the consumers’ doorsteps as swiftly as possible. In addition, with the help of a transportation management system (TMS), one can quickly digitize different operations of business owners and consumers. These numerous advantages of digitization for D2C e-commerce will further boost the international digital freight forwarding market in the coming years.

Top market digitization trends in freight forwarding

A highly competitive market

Digital freight forwarding has endless players, making this industry highly competitive and fragmented. Every digital freight forwarder (DFF) now provides more comprehensive logistical services than the market by utilising a digital platform. DFFs develop their main value proposition around a smooth user experience of shipping goods from one point to another while collecting information on one platform with a single user interface.

Rise in e-commerce

Online shopping is among the most admired and popular virtual activities worldwide, and domestic and international e-commerce is rapidly growing in developing markets such as China, India, and Indonesia. This includes not just direct-to-consumer retail but also shipments of electronics, pharmaceuticals, and consumer packaged goods. With growing access to the internet, manufacturers of products are also gradually moving from traditional freight forwarding to digital freight forwarding.

Artificial intelligence (AI)

AI plays a significant role in automating the manual process, thus providing an intelligent solution which allows forwarders to save time and money by forecasting demands. Forwarders may streamline cargo routes and prevent bottlenecks with the use of AI. Other perks of AI that apply to freight forwarders encompass planning for supply and demand, estimating fuel costs, and efficiency improvements.


The ongoing development, exploitation, and adaption of information and communication technologies by many business sectors are becoming paramount for operational and managerial performance and hence competitiveness. Many conventional forwarders worry about disclosing sensitive information. Complete transparency of online freight forwarding can be attained using blockchain technology and can introduce virtual channels between the parties to improve their trust and collaboration.

Internet of things (IoT)

The network of physical products, or «things,» that are implanted with sensors, software, and other innovations to communicate and swap data with other devices and applications through the internet is known as the Internet of Things (IoT). With the help of IoT, any item equipped with the sensor can be controlled automatically by connecting it to the internet. With the service of IoT, freight forwarders can provide the utmost visibility to the customers as they can easily monitor the state of cargo. Moreover, it offers real-time data that freight agents can use to mitigate risks due to a lack of visibility.

Cloud computing

Distributing computer services through the Internet (the «cloud»), including servers, storage, databases, networking, software, analytics, and intelligence, enables quicker innovation, adaptable resource allocation, and scale economies. Cloud computing is a technology forwarders use to place and store their data online. More software programs increase the complexity of handling logistics business. Cloud-based freight management technology enables forwarders to search only a few places simultaneously.

This is the period of digitization, and digital technology is here to stay. Manual labour will ultimately become obsolete worldwide and be replaced by automation. Keeping up with the new market trends is essential to meet ever-growing customer expectations. Freight forwarders must quickly implement digital strategies to boost their company’s productivity and profit margins and stay one step ahead of the competition. The freight forwarding business is expanding rapidly due to factors like the growth of e-commerce, the introduction of D2C e-commerce and many more. Adaptation of AI-based technologies, blockchain, cloud computing, and IoT is the major upcoming digitization trend in freight forwarding.

Found this blog informative? Check out LOTUS Containers’ services to help you advance in your shipping business.

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