Is Your Forwarding Business in Digitization, Digitalization or Digital Transformation?

Amit Maheshawari, Softlink Global CEO
Amit Maheshawari, Softlink Global CEO

The freight forwarding industry is rapidly changing in the wake of new technologies. The nature of freight forwarders not being the cargo owners or transport operators has led to the perception they cannot force any substantial change in the industry. However, the way they conduct their business and serve their customers impacts the industry as a whole.


Freight forwarding companies across the globe are at various stages of adopting technologies, these levels being commonly termed as digitization, digitalization, and digital transformation. Even though the terms sound similar, they have a distinct meaning in the application. Let us try to understand the stage at which your freight forwarding business stands: Digitization, digitalization, or digital transformation?


Digitization: From Analog to Digital

Back then, business processes were analog. Freight forwarders used to store data in a paper document. To execute a shipment, they had to use a phone or fax machine for all their communications. This required maintaining and storing all the files that might include anything from the shippers’ and transporters’ details to a destination address, quotations, etc. The transition from analog to digital began when a computerized system started making all of this information available and accessible in a digital format in a process called digitization.


Digitalization: Leveraging Digitized Data

Digitalization refers to the process of utilizing the digital data in a systematic and automated format that goes beyond implementing technology to imply an insightful, core change to the entire business model and the evolution of work. Customers’ demands have advanced so much, going from just delivering their shipment to the destination to increasing productivity and efficiency while reducing costs.  They need online quotations, track & trace or electronic billing, real-time tracking, digital signature, credit control, cash flow management, proof of delivery with an estimated time of arrival, online document submission and workflow management, and much more. With digitalization, a seamless flow of information and actionable data to the shippers is ensured that helps forwarders boost their customer services.


Digital Transformation in the New Normal

The COVID-19 lockdown crisis pushed everyone to work remotely, bringing with it real challenges coming from the scattered data and documents, lack of operational control and communications difficulty in managing a remote workforce, and limited financial control. The industry needed an integrated system to bring digital transformation and tackle the challenges of remote working for every department, employee, and management.


The industry has realized that it is time for digital transformation if it is to manage all the core operations right, from operations, data, and documentation accessibility from anywhere, to employee and financial management. Digital transformation has become necessary to bring complete visibility to a single integrated cloud system and run a business successfully in the new normal.


Within the freight forwarding ecosystem, the leaders have already exploited the industry’s digital potential, while others are keenly aware of the digitalization potential and have started to integrate their operations to bring digital transformation.