Digitalization is growing across all types of industries at a fast rate giving rise to many opportunities, helping the companies to decrease their transaction costs, introducing distinct product offerings, and restricting companies’ business models.
Distribution is considered as the core element in the success of many companies especially in China. Chinese freight companies need to continually adapt to the advancement in technology to remain competitive in the highly competitive and fragmented freight industry of China.
The COVID-19 pandemic outbreak further made it essential for the freight companies to digitalize as during pandemic, transport system is the main element for the business to run their operations.
Digitalization offers benefits but also involves risks that companies need to cater to. Digitalization refers to the use of various digital technology tools that reshape the business models and offers a new unique way of generating revenue, the value of the operations.
It involves shifting from traditional means of communication, transportation to automated, digitalized ways of operating, and offering transportation services to move, and deliver products to the business, and final consumers.
China has been one of the fast-growing emerging economies for many decades and each industrial sector is developing at an increasing rate. There has been increased adoption of technology by every business, consumers, that forces the freight industry to also adopt digital practices.
This comprises multiple factors such as an increase in trade leading to an increase in container size; this means freight companies have to deal with more inventories and also have to transport more goods to various countries.
This is a difficult task and so they will have to implement the digital practices to allow them to handle the vast amount of data and manage the on-going shipments of the goods.
Moreover, as China is moving towards being a mixed economy it is also leading to an increase in national trade due to the arrival of multinational companies which requires more enhanced freight services, which again became the reason for the digitalization in the Chinese freight industry.
Additionally, as China like another country is in the phase of the 4th industrial revolution there is increasing use of the internet by the consumers they can transmit their requirements directly, freight companies need to implement digital technologies that will help them to manage the transportation of goods.
In China, with increasing development, usage of e-commerce, along with growing cross-border trade, the freight logistics businesses are adopting more digital innovative tools to develop digital solutions to enhance logistics and supply chain operations.
A research report by Paul Zhang, Founder & CEO of FreightPaul, a Chinese digital freight forwarder explores the digital landscape among Chinese freight companies including the various digital tools used by these companies..
The report outlines the process of digitalization in the freight industry of China and how usage of digital tools such as cloud computing, data analytics, and artificial intelligence techniques is enhancing the service of transportation and speeding up the process of movement of goods from warehouses and factories to the final consumers.
The research report highlights different drivers for digitalization in the Chinese freight industry which help the freight companies to increase transparency between their networks.
About the Author : Paul Zhang is the shipping-obsessed founder & CEO of FreightPaul, a digital China freight forwarder.
He was recognized as a top shipping expect with 10 years freight forwarding experience and personally served more than 1200 clients over 80 countries.
He provides pretty practical shipping advice and amazing freight tools that people like, to simplify their shipping business from China.
I am always very cynical reading articles written by IT-obsessed people about the move to digitisation. I treat these as promotional rather than factual. And ten years freight forwarding experience is not a big deal.
I would also be very cynical about the safety and security of any data that ends up on Chinese servers.
Lastly, are multinational companies really still thinking of opening up in China given the events of this year? I would think they are looking at moving away from placing all their manufacturing/supply eggs in one basket.