The movement of goods over great distances using ships has been carrying on for many centuries.. Many things have changed in the shipping and freight industry over the years, but some things have not..
Today’s business environment is facing a lot of instability whether it is in the form of Brexit, trade tariffs, highly volatile freight rates or new maritime policies..
Now, more than ever, the industry needs people with experience and knowledge to help steer the new generation through the troubled waters..
People who have been there and handled shipping the vintage way but know much more than a thing or two about the modern shipping industry..
As part of our Executive Insights series, we caught up with Steve Walker, a consultant and adviser to many BCOs, freight forwarders and online freight companies..
Steve’s long and distinguished career in senior business management, particularly in the global logistics and supply chain sector, has positioned him well for the future and demonstrates both his vision and acumen.
For businesses looking to take that next critical step, Steve’s advice and support, across all levels, are essential.
SFR : 46 years in freight, wow, that in itself is a laudable achievement in this industry.. What are some of the major changes you have seen in the 46 years that you have been in freight forwarding..??
SW : I’ve seen numerous changes during my four plus decades in freight forwarding, but paradoxically, while many elements of freight forwarding have been totally transformed – most significantly since the advent of computerisation – it is astonishing how many processes remain relatively unchanged.
While the physical movement of freight is slicker and while automation is appearing in many areas, the fundamental process is unchanged.
The most laudable change across the whole sector is the way that the customer – the shipper – has become the focus of the business and how the solutions/services adapted to serve them better. In the old days, the shipper had to adapt to the service offered by the forwarder.
SFR : If you have to list 5 major innovations in shipping and freight in all these years that changed the face of trade, which would you choose..??
SW : There are five particularly stand out innovations that have transformed freight and international trade.
1) The answer to the chicken and egg paradox is containerisation. Because, without Malcom McClean’s intermodal steel box invention, globalisation would never have happened.
The shipping container might seem an unlikely candidate for the most influential invention of the 20th century, but by slashing the cost of deep sea shipping, and massively speeding up the whole process, it has arguably had a bigger impact than the aeroplane or the microchip.
2) The globalisation of trade is not a modern phenomena, and the creation of bodies like the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), for which GATT is the foundation have contributed massively to the modern surge in globalisation, but there is no denying that the massive fall in transportation costs driven by containerisation has been the primary driver.
3) Economic reforms in China in the early 1980’s paved the way for the start of many well-established NVOCC operations and catapulted forwarding volumes, as the world’s factory opened for business, paving the way for the eventual WTO accession in 2001.
4) At the same time as the world opened for business, computerisation arrived and offered hard-pressed forwarders with a replacement for the Banda machine and telex. Today’s system are a far cry from the old IBM AS/400s.
5) And now we have the digitalisation of forwarding. Though we don’t really, as it started in the 70’s.
SFR : Some of the digital freight forwarders are promising increased visibility and control over customers shipments, transparent shipping costs, more predictable and reliable transit times using technology.. Can technology really address these..??
SW : Freight Forwarding as we know it is today is under threat from Silicon Valley, its IT boffins and IT giants that fulfill our daily shopping and transport needs.
While we need to accept the challenge to create a new model for the remainder of the 21st Century, we also need to remember that no company or technology can greatly improve on certain variables in shipping like transit time, weather, blank sailings, freight rate volatility.
But technology can assist freight forwarders to improve the services to importers and exporters and in many cases pre-alert them of possible disruptions to service based on data that is available.
The constant evolution of IT has, and will continue to have significant impact on the world of logistics and managing the constant improvements in global supply chain management can be both invigorating and daunting.
The technology to provide visibility and control over shipments, transparent shipping costs, more predictable and reliable transit times however, has been around for years in my own experience.
In fact, these features were built into the software solution my team developed at SBS Worldwide, and which is now deployed by DSV.
SFR : Should the traditional freight forwarders be worried about the pace at which the digital and technological space in freight forwarding is changing..??
SW : Forwarders are good at adopting technology, but with three caveats.
- Cost is always an issue, and for many forwarders, a critical weakness that blinds them to the opportunities that will follow investment.
- When forwarders do invest, the focus is almost always internal or process driven, when it absolutely should be pointing outward and focused on the customers.
- The biggest Achilles heel for many forwarders is that when it comes to innovation, they are laggards and follow the herd. This time the herd may be culled.
SFR : Is it the end of the road for at least some of the freight forwarders who are more relationship and client based than digital based..??
SW : Relationships and client focus will always be core for forwarders and some niche operators will continue successfully below the digital radar, but the industry is changing and those that don’t swiftly embrace the digital wave and change their business models to take account of developments like 4PL will not survive.
Businesses should not become anchored to archaic operational and IT systems which may end up doing them more harm. In my opinion, the key is to create a company DNA that constantly analyses, evolves and creates consistent USPs and is innovative.
SFR : What is your opinion on the terming of technology and technological innovations as a “disruptor” or “disruption”..??
SW : The press likes the “disruptor” handle because it makes good headlines. In reality the disruption has largely been the result of over-active PR agencies, taunting an aggrieved forwarding audience, that have been labelled as “dinosaurs”.
The simple fact is that there is no single technology, or group of technologies, that are replacing forwarders, though the myriad of rate platforms may well disrupt relationships between shippers and incumbent forwarders.
Enabling technology is far more interesting because it’s a rapid way to drive radical change, increasing the performance and capability of forwarders. The most typical example is the 4PL platforms that forwarders can integrate with their transport management system (TMS) to create new digital products and recurring revenues.
WOW !! 46 years if experience in freight industry. I I like his perspective on this subject
Great stuff here,like it.
Nice article..It was really helpful and informative one!!
Thanks for posting the interview with Steve Walker, gained some valuable insights.