The notion that logistics practitioners want a pure self-service model for procuring and managing their freight is running into a wall — a human wall that wants automation in some areas and not in others.
That’s not to say the logistics industry isn’t seeking progress on the automation front. Rather, the industry is moving toward a more nuanced approach, balancing the current needs of shippers and forwarders with efforts to provide automated single-click software options.
At the JOC Emerging Tech Summit in New York on Jan. 15, a range of speakers across international and domestic freight disciplines highlighted the spaces where automation can fit into existing company structures without disrupting previous investments in people and systems.
As Jenna Brown, co-founder and CEO of London-based technology provider Shipamax, noted, automation works best when it is least disruptive to the systems on which logistics professionals currently rely. Her company has focused on extracting and normalizing shipment data contained in emails. Rather than try to get users to adapt to a new environment, Brown realized there would be more traction in meeting its users on their terms — that is, in their email applications.
Already in progress ...
In the arena of digital quoting and booking of ocean freight, uptake of self-service platforms is in a sense already in the works. A handful of the world’s largest container lines and most of the top 20 forwarders have the ability to quote a rate directly through a browser-based system akin to travel sites such as Expedia.
The question is whether buyers of ocean freight will use those platforms simply as price discovery tools or if they will migrate their spot capacity procurement to such environments. Or, more pertinent to the question of self-service, will they shift the ratio of contract capacity to spot if the self-service platforms are easy to use, effective, and don’t expose shippers to wild swings in rates?
At this point, it’s difficult to envision large-volume shippers making that shift any time soon, not least because they don’t see a need to. They have to reconcile not just an entrenched culture around annual contract negotiations, but also a sense that self-service platforms fail to capture the weight of their leverage in rate negotiations. Shippers have told JOC.com that the time potentially saved in procurement cycles from using instant rate options isn’t worth sacrificing that leverage.
The traction may then come from forwarders either using carrier self-service pricing tools or buying their own off-the-shelf instant pricing solutions, such as Evergreen Line’s use of software provider BlueX Trade to enable its GreenX instant pricing tool. The Taiwan-based container line said in mid-January that more than 1,000 shippers and forwarders have signed up since the system went live in November. Maersk, meanwhile, said in mid-December that a quarter of its spot bookings are now conducted via its instant pricing tool, Maersk Spot. Most of the uptake from that product is from forwarders, the carrier said.
Meanwhile, another top-10 container line told JOC.com it will be cautious when rolling out an instant pricing product externally, “given that the Maersk Spot tool — and to a certain extent the Hapag tool — has been disruptive to the market in allowing forwarders to use it for pricing, which gives them a tool to try to force down carrier rates.”
A solutions provider to the forwarding industry also told JOC.com some of its customers are struggling to manage the workflow related to providing instant rates to shippers via carrier tools while also juggling their normal provision of rates.
Forwarders are not incentivized to provide a completely self-service product, nor is such an approach practical, according to multiple third-party logistics providers (3PLs) who spoke with JOC.com. Instead, their focus is on integrations, Angela Czajkowski, director of supply chain at Baltimore-based forwarder and customs broker Shapiro, said at the JOC summit. Those integrations connect outside data sources and services — such as standalone cargo visibility providers — and Shapiro’s customers.
Rather than self-service, Shapiro is trying to use technology to connect its customers with its own systems and those of its partners. In particular, visibility is an area where both shippers and forwarders seem eager to adopt solutions that alleviate the need to manually check on where cargo is, across modes.
As Alan Ocana, CEO of ConsulHub and an attendee at the JOC summit, wrote in a LinkedIn post, “Full self-service for shippers (automating the whole logistics process) seems not to be in great demand by shipper or forwarders. Some parts of it, like pricing, booking, and tracking, yes.”
But forwarders, shippers, online platforms, and brokers all agreed that “automatizing the whole logistics process is not possible at this stage because this business has too many exceptions.”
And that may be where the future of logistics automation and self-service models lies: in filling the laborious process gaps and in helping existing players conduct their business faster.