Guest Column | February 20, 2023

5 Benefits Of Digital Freight Forwarding

By Emily Newton, Revolutionized


Supply chains today face many disruptions, but not all of them are bad. Digital disruption promises to make the logistics sector more accurate, agile, and cost-effective, and as more organizations embrace it, it’s changing the face of the industry. One of the pioneering aspects of this shift is the rise of digital freight forwarding companies.

The digital freight forwarding market was worth just under $7 billion in 2022 and could surge to nearly three times that size by 2027. If this trend continues the way it’s heading today, these digital-first business models could transform the future of logistics.

Conventional Vs. Digital Freight Forwarding

Digital freight forwarders serve the same purpose as any freight forwarder but center around the use of digital tools. That includes the Internet of Things (IoT) tracking solutions, cloud computing, back office automation, data analytics, and machine learning.

As Industry 4.0 initiatives rise, the lines between digital freight forwarders and older, “standard” forwarders are starting to blur. Automation, data analytics, and digital communication are some of the largest 3PL trends today, so they’re becoming a more common sight across organizations. The key difference is that while traditional forwarders may adopt a few of these technologies into their workflows, digital forwarders center their entire business model around them.

Digital forwarding companies developed their companies around these technologies from the beginning. As a result, they use them to a greater extent and are often more familiar with how to capitalize on them.

Benefits Of Digital Freight Forwarding

Because this practice has grown so quickly, it can be difficult to see through the buzzwords to understand what it actually offers. To clarify the situation and help you make the most informed decision, here are some of the leading benefits of digital freight forwarding.

1. Transparency

One of the most significant advantages of digital freight forwarding is its visibility. IoT tracking provides real-time information on shipments’ location and, in some cases, quality. These timely insights enable you to plan more effectively and respond to developing situations before they cause widespread disruption.

Similarly, digital forwarders’ use of cloud platforms means you can review shipments, carriers, rates, and other critical information from virtually anywhere. You also can share this data with key stakeholders easily, enabling more cooperation across the supply chain. This boost in communication further increases your adaptability and can help form better carrier, supplier, and downstream partner relationships.

Accessing more information about your supply chain partners also can help avoid unintended customer fallouts. Failure to uphold ESG values erased half a trillion dollars in public companies’ value between 2015 and 2019. Increased transparency makes it easier to ensure all partners meet higher standards, letting you prevent scandals and related losses.

2. Faster Responses

Centering operations around digital technologies also helps freight forwarders respond faster. Because these services consolidate up-to-date information from carriers into a single platform, you can generate and compare quotes almost instantly. Because they automate back office processes like paperwork filing, they also can connect you to 3PLs faster.

Using a centralized cloud platform to manage your shipments means you can see a lot for yourself without requesting information. You can use these online solutions to pull up the same data a forwarder employee would traditionally have to find and send you.

Digital-native freight forwarders are also more likely to use automated tools like chatbots to respond to customer requests. These bots can offer quick, informative answers without customers waiting for an available service desk worker. They also can analyze the severity of more complex requests to prioritize them appropriately for human workers to address.

3. Lower Costs

Digital freight forwarding also can help lower operational costs. Being able to compare quotes from various carriers instantly helps find the best deal. Some technologies use machine learning for a given shipment. This insight ensures you always find the most cost-effective solution for each job.

Digital forwarding’s extensive automation can lower expenses, too. Automated systems don’t require a salary and can accomplish repetitive, data-heavy tasks far more efficiently than human employees. Consequently, highly automated forwarders can provide the same services as conventional alternatives with lower overhead, resulting in lower costs for the end user.

Similarly, cloud-based, heavily automated systems reduce the administrative burden and paperwork on your end. That can free your employees to focus more time on value-adding tasks, effectively lowering operating expenses by focusing on more cost-effective work.

4. Scalability

Over the past few years, repeated disruptions have emphasized the need for more flexible supply chains, and digital forwarding provides the scalability necessary to achieve that. Because these forwarders rely on digital technologies and processes rather than manual and on-premise solutions, they can scale up or down more readily.

Digital forwarders can add new carriers or services to their database quickly, thanks to the cloud’s ease of access and agility. Similarly, they can instantly integrate new clients or remove old ones from their system. This scalability translates into greater convenience on the clients’ end.

These cloud-based tools also let you scale your operations, reviewing and adjusting your carrier relations as necessary as your supply chain grows or shrinks. This agility is essential for an adaptive supply chain, which is becoming increasingly important.

5. More Accurate Forecasting

Digital freight forwarders’ extensive use of digital tools means they and their clients can access more data points. With more digital data, you can employ forecasting tools like predictive analytics more effectively.

Data discovery challenges are the leading barrier to gaining actionable insights from analytics processes. Digital forwarding addresses this by digitizing much of your usual supply chain operations, generating usable data around these systems and workflows. You can then use this information to gain a more accurate understanding of your supply chain and the trends affecting it.

This wealth of data, combined with the cloud’s accessibility, makes it easier to spot emerging trends sooner. Consequently, you can generate more reliable forecasts to form a more flexible, resilient supply chain.

Digital Freight Forwarding Is The Way Of The Future

As more organizations realize these benefits, more freight forwarding companies will embrace these tools. Widespread digitization will make every forwarder a digital one eventually.

While digitization may be inevitable to some extent, capitalizing on it early can help supply chain organizations experience these advantages sooner. Understanding what digital freight forwarding can offer is the first step to modernizing your supply chain.

About The Author

Emily Newton is the Editor-in-Chief of Revolutionized. She regularly explores the impact technology has on the industrial sector.