What you will learn in this article:
Who the known and big players in the logistics industry are
Who the new kids on the block are
How you can choose a logistics service to match your needs
Globalisation and the increased use of technology are changing customer expectations. Digitalisation has helped disrupt and push innovation in industries for many years, and it has also reached the logistics sector. As new technologies enable greater efficiency and more collaborative operating models, new start-ups and the industry's own customers and suppliers are changing the ways of working and co-existing next to the traditional freight forwarders and carriers.
The known and big players
First and foremost, there are the significant traditional freight forwarders. Freight forwarders are businesses that manage shipments for individuals or corporations from the manufacturer to a customer, or a final distribution point. Companies such as DSV, DHL or Kühne & Nagel are amongst the biggest and have existed in the market for many years. They are established logistics providers and invest in digital solutions. There are clear advantages when shipping your cargo with these players:
They have a global network and many years of logistics experience
They provide strong procurement power
They offer end-to end services under one point of contact
They are well known and established brands
While these traditional forwarders can do a lot, there are some things they can't do and it’s important to be aware of these when picking the right partner for your cargo:
Freight forwarders rely on asset owners and do not own assets such as vessels. That means they don’t have any operational influence on vessel schedules, loadings and contingencies.
If you are using a freight forwarder as a small company with a small number of shipments, your needs might not be prioritised.
Using a traditional freight forwarder can mean that you don't have control over all details of your shipment as you'll be leaving them to a third party.
You will face increased costs when using a freight forwarder as they calculate the margin on top.
The new kids on the block: digital logistics providers
The market for digital freight forwarders exploded following the birth and exponential growth of e-commerce. Digital challengers can’t replace every step in the value chain, at least for now, but they will nonetheless transform it over time. Sumit Varma, an entrepreneur and logistics and supply chain professional, has defined a digital logistics provider as: “Any company who uses less manual intervention (on calls/emails) and can automate as much exchange of information on a single transactional cycle from pick up to delivery is a digital solution.”
The logistics industry is very complex and when customers use online channels to find forwarders and to book and manage their shipments, they face many obstacles. For example, 40 percent of carriers and forwarders still do not offer online registration – and the percentage providing online quotes is even lower. These obstacles – paired with slow processes in traditional freight forwarding and a lack of visibility across the logistics industry – explain why so many start-ups (and some investors) see huge potential in disrupting the logistics business. Many have already taken important steps along the path to digitization.
Many start-ups have successfully digitalised one or more parts of the supply chain, such as quotation and invoicing, but none of them cover it in full, except for simple shipments. In the case of the latter, users can place a booking with a few clicks, offering track and trace and one single dashboard to manage all shipments. Traditional freight forwarders offer information on rates, available capacities, and routing options via phone or email. Digital platforms on the other hand provide this kind of information faster and at lower cost, since there is less human interaction involved.
Twill is one of these digital solutions – and alongside us are other innovators such as Flexport, Freightos or Forto. But also Cogoport or iContainers are examples of digital providers which challenge the status quo of the logistics industry:
Flexport: A digital freight forwarder and customs broker
Freightos: An online freight shipping marketplace & platform
Forto: A supply chain platform
Cogoport: An international logistics data-driven marketplace, specialised in routes between Asia and Europe
iContainers: An online freight forwarder
What is the key difference between digital logistics providers and traditional freight forwarders?
Digital innovators are trying to improve the end-to-end flow using technology to further enhance the customer experience. They do this by increasing transparency across the entire booking flow and introducing notifications and alerts, so customers are always informed about the status of their shipment. Digital logistics providers often include customised dashboards and guidelines to ease the booking process. They are also aware of the relevance of social media channels and provide customers with important and relevant industry updates via their platforms and blogs.
In recent years, digital transformation has been accelerated. Companies are struggling to create effective risk plans for future world events that disrupt supply chains. There is a revolution happening enabled by blockchain technology to bring transparency across the supply chain and TradeLens, a joint venture between IBM and Maersk, is a good example of this.
Who's next? Potential incubators:
But what is the future of traditional freight forwarders as well as digital innovators? The logistics industry will most likely get even more disrupted by big digital players such as Amazon, Alibaba or Uber.
As customer expectations towards speed are increasing, their e-commerce orders are being delivered within hours. Plus, they request complete tracking information at every step of the parcel's journey. This has spurred the digital players such as Amazon or Alibaba to build their own logistics digital platforms, handling the surge in volumes, as retail moves towards e-commerce.
Alibaba, for instance, has created a digital platform in collaboration with Freightos where you can compare, book and manage freight. Amazon, on the other hand, owns strong technological capabilities and is eager to gain control of the complete online customer experience.
How does Twill fit into the overall landscape?
There are many types of players bringing a digital experience to the industry, and Maersk is one of them with its innovation Twill. It is built as a start-up, offering a new logistics service for new ways of working. Twill has embraced digital technology in customer-facing and back-end processes while reinforcing it with the insights and knowledge of real logistics experts.
At Twill, we provide you with an easy-to-use design interface, multiple ways of transportation and additional logistics services, while typically reducing your administrative logistics costs. We do that by reducing your paperwork, giving you the possibility to check rates on our platform and providing you with a simple-to-use dashboard.
And we have some more unique features for you:
Transparent pricing options – you choose between our monthly fixed rate or our instant rate – whatever fits your business best
As we are supercharged by industry leader Maersk, we provide you with access to a global network – so you can take your business from local to global while you benefit from the industry knowledge of more than 115 years
“We believe that the trend of increasing interest in innovation the logistics and supply chain space will continue in the upcoming years as technology matures and enables further efficiencies in what has till today remained largely manual industries. We firmly believe that technical solutions such as Twill and other market innovators will lead the change in the industry and drive the supply chains of tomorrow in a more efficient, transparent and simple way. They will further reduce the complexity and ambiguity that today surrounds supply chains.”Emelie StarkSenior Investment Analyst at Maersk Growth
How can you choose the right logistics provider for you and your business?
To find the right solution for your business, be sure to compare and challenge the important items to you. You can choose between these options:
Having a reliable logistics network and many years of experiences within the industry
Getting a fast-developing partner with an innovative mindset and focus on simplicity and ease for non-logistic experts
A third option, such as Twill, which combines a reliable and global logistics network with strong experience as well as the digital setup and an innovative mindset – easy-to-use for entrepreneurs as well as small and medium-sized businesses
It is up to you what you prefer and choose. There are multiple players in the field, and you should decide based on your business needs. After all, it is all about finding the right logistics services for your business.