Freight Forwarding plus Online Innovation Equals a Win/Win Outcome

By Salman Mirzaei

Port of Los Angeles

Port of Los Angeles

“I fear the day that technology will surpass our human interaction.” – Albert Einstein[1]

Fast growing digital technology can help many industries such as freight forwarding and logistics. However, a Silicon Valley initiative to create internet-based forwarding for overseas shipping is causing concern within the freight forwarding industry. Freight forwarders fear that the increased dependence on online processes might lead to competition with a competitor who does not have a substantial amount of experience and expertise.

For example, Kuehne + Nagel Chairman Karl Gernandt said in an April 2015 interview with Journal of Commerce, “This kind of innovation is bringing competition from people that maybe don’t have an expertise in forwarding but who understand digitized processes and might grab business from us.”

The day has come that technology is surpassing human interaction. Nowadays, technology is taking part almost in every aspect of our life from legal issues,[2] to banking, online shopping and virtual education. International trade, particularly in the area of freight forwarding, is not an exception.

There are online platforms for placing air freight orders, which decrease the time spent for obtaining quotes, placing bookings and tracking shipments such as KN Freightnet, which was developed by logistics provider Kuehne + Nagel. According to Gernandt, KN Freightnet reduces administrative procedures from a period of days to five minutes, thus saving shippers a considerable amount of time. “You can imagine how much efficiency gains could be harvested if you started to concentrate more on this process. The more efficient we can make that, the more efficient it will be for our shipper customers,” said Gernandt in the same Journal of Commerce interview.

To sum up, in the age of speed, there is no way for a company to survive if it does not upgrade its technology and go online. In the words of investor Warren Buffett, we have to “fight off the ABCs of business decay, which are arrogance, bureaucracy and complacency.” Time consuming bureaucratic procedures in international trade will only result in a company not being able to compete.

Online innovation should not be viewed as a threat. Rather, online innovation should be seen as an opportunity for cooperation between freight forwarders and new technology that can only lead to a win/win outcome.

 

Salman Mirzaei is currently a student in the International Trade and Commerce & Import/Export program at UCLA Extension. He received his M.A. in international law from Islamic Azad University Central Tehran Branch.

 

[1] Albert Einstein is credited with saying this quote, although some question whether Einstein actually made this statement. Either way, the saying resonates with the trends that we are seeing today, as discussed in this piece.

[2] There are a lot of Online Dispute Resolution (ODR) websites that deal with different legal issues.

The views expressed in this piece are those of the author and do not necessarily reflect the opinions of International Trade Examiner.

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About Dr. Sarita D. Jackson

is the President and CEO of the Global Research Institute of International Trade, a think-tank/consulting firm that examines trade policies and their impact on domestic businesses. Prior to heading GRIIT, Dr. Jackson was a tenured associate professor of political science in North Carolina and worked as a trade policy consultant for an Arlington-based consulting firm. She has participated in trade policy projects and conducted research on free trade negotiations in Botswana, Antigua and Barbuda, Dominica, Dominican Republic, Mexico and Panama. Dr. Jackson has also traveled to Chile and Argentina to study their political systems and economic integration policies.
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