The world's leading forwarders have made huge advances in their online sales capabilities in the last year but face increasing competition from digital forwarders and container shipping lines, according to the latest secret survey by Freightos.
Of the world's top 20 freight forwarders secretly assessed by the online marketplace, C.H. Robinson, Kuehne + Nagel, DHL and DB Schenker stood out for prioritizing user experience and ease of use.
The report found a "dramatic improvement" in how top forwarders help customers procure freight online, with 11 of the 20 forwarders now providing dedicated ‘request for quotation,' or RFQ forms, three of which instantly generated quotes. In contrast, in 2015 only three forwarders provided ‘request for quotation' forms.
"By promptly responding to all quote requests, instant quoting forwarders are much more likely to win the sale than their manual quoting counterparts," said the report.
Equally, in 2015, the majority of forwarders (11) expected new customers to use their general enquiry form. This has now dropped to about one-third. "Two forwarders still do not have forms, down from six in 2015," said the report.
Container Line Incursions
The survey also found that leading container shipping lines are now an online threat to forwarders by finally taking digital connectivity seriously. Of the top five carriers surveyed, all but CMA CGM features its request to quote form prominently on its homepage.
"All five had RFQ forms – compared to only three of the top five forwarders – that were straightforward to use," said the report. "Hapag-Lloyd quoted instantly and Maersk quoted in less than an hour."
The request noted that "MSC responded within 68 hours, but could only quote port to port."
In addition, "CMA CGM didn't respond to the mystery shopper quote request, but it does instant quote for approved customers. Overall, carrier response time was much quicker than the freight forwarders."
Digital Forwarders Come Forth
The report also details how digital forwarders are expanding their reach. In the 2018 survey only two digital forwarders could quote for China-U.S. door-to-door. In this survey the number doubled to four – half of the eight surveyed digital forwarders – although two only supported the common addressable market of Fulfilled by Amazon (FBA).
"As with the last survey, digital forwarders were more customer-focused [than the top 20 traditional forwarders] and scored much better for automation," said the report.
The Secret Survey
The annual survey by Freightos is designed to assess the online sales capabilities of the 20 largest forwarders. It is conducted in secret with a ‘mystery shopper' posing as a rapidly expanding U.S.-based e-commerce importer requesting quotes for a door-to-door shipment from a major Chinese city to a major U.S. city via a website form or, failing that, by email.
"Requests for FCL, air and less than container load (LCL) quotes were spaced over the course of one month," explained Freightos.
Three components of the user experience were then assessed – requesting a quote, receiving a quote and the overall sales process.
Website Sales Gain Ground
According to the survey, websites are gaining increased importance as sales channels. For example, of the 20 companies surveyed, eight quote request forms were found in less than five seconds, four forms were found in less than 15 seconds, while eight forms took 15 seconds or longer to find or did not exist at all.
"Only one forwarder failed to confirm the quote request, an improvement from 2018's survey where five forwarders failed to confirm the quote request," Freightos reported.
Forwarders Now Focus On "Buy Trends"
The report also details how consumer ‘buy trends' are now shaping top forwarders sales strategies. For example, DB Schenker lets customers browse available sailings and select one based on transit time and cost, while CEVA offers a ‘required service' question which enables users to prioritise services based on pricing, transit time, equipment and space guarantee.
"Air cargo more readily breaks down to different transit time/price combinations, like Kuehne + Nagel's instant quote including the choice of KN Express, KN Expert and KN Extend," added the report.
The Way Forward
Eytan Buchman, Freightos Group CMO, told FreightWaves he was confident freight forwarders would continue to progress their digital procurement offerings.
"We're definitely past the tipping point of an imperative for digital freight sales and service; with half of all forwarders selling online, as well as the new tech drive from carriers and forwarders alike, things are certainly changing," he said.
"It's particularly exciting because as digitization and transparency – both in terms of price and service – help customers choose better, the real competition ground will shift over to who can provide the most reliable service with the best customer support. That means lower touch shipment handling, faster, more trackable shipments, and less time spent on dealing with underlying supply chain issues.
"The bottom line is that as technology becomes more ubiquitous, it will be less about the software and more about customer service. And that's a very, very good thing."
Freightos Group Founder & CEO Zvi Schreiber previously predicted that online sales by forwarders would reach a tipping point in 2016. "That was a radical viewpoint then," he said. "But in retrospect it proved itself – between then and now many forwarders have finally adopted digital self-service sales.
"There's much more to freight digitalization, of course, than online sales. But online sales is a great start. And now we're hoping to see more automation and efficiency in back office processes and customer service too."
The full report is here.
More FreightWaves and American Shipper articles by Mike
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