In the article, we summarize some of the key insights from our interview with Chief Digital and Transformation Officer at Agility GIL, Biju Kewalram. We discussed whether or not tech will disrupt forwarding, what the most impactful technologies will be, Amazon’s impact and more.
As part of our Future of Freight interview series, we sat down with Agility GIL Chief Digital and Transformation officer, Biju Kewalram.
In previous episodes we heard from logistics technology insiders and ocean carriers on how tech is changing the industry. This time we got a top-tier global freight forwarder’s perspective on digitization.
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Here are his top insights on how forwarders can leverage tech into the future.
Lesson #1: For forwarding, tech is an enabler, not a disruptor
At its core, freight forwarding relies on a global network of physical assets and relationships. It’s not just bits; it’s also boxes.
Success means delivering consistent service across geographies and reacting quickly to all the volatility of the supply chain.
So no matter how digital a 3PL is, tech will always be one layer on top of the core physical network. The value proposition remains the same.
“I’m not seeing a pure tech play that relies on some sort of virtual network that results in a disruption that completely changes how the industry works.”
To be sure, ‘legacy’ forwarders have to learn from digital startups on how tech can be leveraged to make forwarding an efficient, web-based and customer friendly industry. Those that don’t will be at a disadvantage as customer expectations shift.
But, enterprise forwarders still have an edge that no newcomer can compete with – their established global networks. Within this context, it’s worth remembering that Flexport, a prominent digital forwarder, ended up shifting into the physical realm quite quickly, with both airline charters and warehousing.
In Biju’s view, enterprise forwarders that can layer the best of tech on top of their physical assets and expertise, can move fast and compete.
Lesson #2: Mind(set) over matter
And what do legacy players have to do to embrace innovation and change business as usual?
Introducing agile frameworks to enable innovation at large, ‘legacy’ organizations is critical (yes, this came up with Hapag-Lloyd’s Chief Digital Officer too). But teaching, certifying teams and implementing the frameworks won’t be effective – won’t finish the journey of continuous improvement – without the right mindset.
To bridge the gap between tech and ‘physical networks’ like forwarding, Agility works hard to establish an organizational mindset – the aggregate attitude of the leadership – that recognizes innovation as a key to success. Most impressively, they actually put together a training program that teaches this to new employees.
By setting the tone from top down, agile frameworks become second nature.
Lesson #3: Fly like a BIRD through the perfect tech storm
The growing maturity of computing power, communication speed, and data storage have all converged to increase the level and value of data realization possible in logistics.
Blockchain, IoT, robotic process automation, and data science (acronym: BIRD, get it?) will be the most impactful technologies for solving key problems in logistics by, respectively, making information trustable, visible, automatically accessible and actionable.
Lesson #4: Don’t fear Amazon, learn from them
Amazon’s moves to build its own logistics network are not a threat to forwarding (even though Amazon has serious logistics chops), according to Biju.
The ‘threat’ is the customer expectations that Amazon’s customer experience and level of service have set.
Forwarding needs to learn from Amazon’s dedication to frictionless online transactions, and commitment to standardization and smart data structures in their relationships with their partners.
“First, Amazon raised the expectations of service levels for online transactions. And second, they created an expectation for a digital layer, a standard interface for partners. They’re forcing a rapid adoption of a standardized digital interface for their SME and logistics partners.”
Amazon’s global reach is changing how smoothe people and businesses expect transactions to be, and some of that is due to enforcing standards that let partners interface seamlessly.
Forwarders who internalize these will at first differentiate themselves, but then it will become the industry standard. And those who don’t learn the lesson will lag.
Lesson #5: Learn from a crisis
Forwarding is about resiliency: the ability to be flexible and agile in response to disruptions.
The pandemic demonstrated that in the modern supply chain, information is the basis for resiliency.
When COVID-19 hit, the shared organizational mindset meant that Agility’s various teams were able to mobilize, and collaborate to quickly add a dynamic and expansive online updates resource to give customers what they needed most: information, visibility and reassurance.
But even with the latest tech solutions, relationships still matter.
“It takes a crisis to realize that years spent in relationship building matter a lot.”
Agility’s ability to react and offer solutions in the face of volatility still had relationships – with trusted partners and trusting customers – as its foundation.
Finally, the crisis showed that a new normal is always possible.
Thanks again to Biju for taking the time to chat with us and share these insights.
Remember to join us for Episode 4 of the Future of Freight, where we explore how the world’s largest B2B sourcing and procurement platform, Alibaba.com, views logistics innovation. We’ll talk to Jamin Dick, the Head of North America Supply Chain at Alibaba.