Death of the Freight Forwarder.. Fact or Fiction

I have written articles similar articles before, however I feel after several recent discussions, perhaps it is time to start a deeper discussion on the topic. I encourage you to add your comments and opinions on this. Lets get some debate going.

Freight Forward in its current form is already dead.

There have been many articles written over the last few years that we are approaching the death of the freight forwarding industry, and that it is a superfluous industry and will be entirely digitalised, and we will no longer require this skill. To a degree, the greater transport industry, including shipping are at risk here and themselves, guilty of driving this by devaluing their own skill levels and essentially turning the transport market into a commodity. Certainly, the current model of freight forwarding, which too often discounts the skill of the people as a value added service, is not a model that is sustainable. As such it has been doomed for some time. I do believe however that, in history are the clues to the future, and shipping and freight forwarding both have long histories that too often are forgotten, and point to something quite different.

Both industries have their origins in antiquity, where the entire process of the trade process was an mutual adventure undertaken by a variety of persons each with different, but clearly defined stakes, working together for the same postive outcome of the overal adventure. One could and should see each ship sailing as the start of a new adventure. The ships captain was usually the owner operator of the vessel and most revolved around him on a multiyear mission to take goods from his home port, sell them and return with a load of foreign items to sell at his home. This grew from coastal, to regional until we had the great exploreres seeking the routes to the east. If we move to the mediteranean, one discovers the Phoenicians, setting up trading routes and regular passages already before Christ, as far as East Africa, and one believes today, across the Atlantic itself.

The goods were essentially in care of the master, supplied by partners and investors who had interest in the trade, and the origins of the freight forwarders were lies in those businessmen and innkeepers, who would store the imported goods locally and sell or hold them on behalf of the venture partners, to allow ships captain to turn and start the next venture while his goods were still being traded in the port. Very often, these were the inn keepers with spare storage area behind their inn, or in their stables, in a European context, with this being traced in the UK to Thomas Meadows and Company Limited of London, who, rightly or wrongly, claim the title as the first to be formally called 'freight forwarders'. This a grossly simplified description I realise, but enough for our purpose here. The whole supply chain was, as I believe shipping and logsitics should remain today, a partnership exercise, with a lot of trust between the partners. Sadly however this is seldom the case today, because of the complexity of modern globalisation and the rising protectionism. But thats a different article.

While the Shipping industrys development is generally well known to those in the industry, that of the freight forwarder is not as clear or well documented. Perhaps also because of how it has evolved and changed over the centuries. It is however at its core the receiving and distribution of goods on behalf of a 3rd party. Be it the ships captain, the shipper or receiver, or even another party altogether.

Hence the roll of the freight forwarder and the shipping company, are really symbiotic and need to work closer together, yet over the last 3 decades, due to the late 20th century developments in freight forwarding, have resulted in an annimosity and conflict between the two that has, I believe, lead to the demise of at least the skills level across the industries. With no barriers to entry, other than a fat checquebook, or access to lots of cheap credit, the industry has become something of a bank for international trade, with forwarders now offering up to 180 days credit, but not themselves seeing true value other than buying and selling services on a margin and taking interest on the credit.

YET THERE IS SO MUCH MORE THERE

Discounted though it is, a good freight forwarder smooths the waves of international trade, ensuring swift clearances through the authorities, optimising the transport chain for the most cost effective and speedy transport. Thus it is the people and their knowledge who make this a dynamic and effective industry, at its core, and it is these people who must once again come to the fore, now aided by systems such as AI and Blockchain technologies.

There are many highly skilled puzzle makers out there, able to take the most complex of trades and move goods seemlessly, anticipating and solving challenges of the chain. It is these skilled people and their experience that we cannot afford to lose, and a death of freight forwarding would put them in dire risk. Lets face it, no one notices when logistics goes smoothly, which is over 85 percent of the time.

Already I have seen too many accomplished colleagues in shipping and freight forwarding simply give up the fight and become restauranteurs, bankers, or the like, in order to have some kind of sustainable carreer and positive interesting workspace. I remain passionate about the industry, I love it and get excited by each new challenge and each new project, and the disheartenment that comes from hearing that 'freight forwardering is dying' is replace by the excitement at where it is going, and what is replacing it.

The model is dying, no longer can one sustain themselves by buying and selling transport services with a profit margin through simply a strong network of contacts. What is coming is a true mature knowledge-based industry, based around strong digital platforms. It will have proper visibility through all aspects of the transport, managed by a group of Subject Matter Experts, with a deep understanding of their area of expertise. That may be a customs clearance specialist, it may be contracting ships (Ship broking ) it may be an Africa specialist or even a Mozambique specialist. It may be a refridgerated cargo specialist or a project heavy lift specialist. There are so many dsiciplines within the greater logistics industry, each of which with required who know of the discipline, region or speciality, what pitfalls to anticipate and how to avoid or mitigate them. Let no one tell you they are a 'logistics expert' ask them, 'what area of logistics?' Just as no freight forwarder can claim to be equally strong in all areas.

Is Logistcs dying? No way! Its growing and becoming more whole and intelligent. Its shedding some terms that are beyond their usage, its changing, and its converging. There is no room anymore for those who do not add or realise their value, and all that matters is really what is your value-add in the process.

Freight Forwarding is dead, all Hail End-to-End Logistics!