For years, technology has been cast as a threat to freight forwarders. At Solvo.ai, we believe the opposite is true: far from a threat, technology—in particular AI—will deepen the quality of the work freight forwarders do, empowering them with new tools and freeing up their time to deal with aspects of their jobs that really matter.
To explore this optimistic perspective, we reached out to four leaders in the field, each bringing unique insights and extensive experience. Despite the diversity of our backgrounds, we all hit on major areas regarding how AI will empower freight forwarders going forward. Below, you’ll find perspectives from myself and:
- Will Urban, a freight industry veteran, who after a prolonged career with Expeditors, grew Flexport from $600m to $4.5bn revenue in his capacity as Chief Revenue Officer.
- Sune Stilling, ex-Founder and Managing Partner at Maersk Growth now building the first supply chain and logistics focused venture fund in Europe, Nine Realms.
- Nikolai Bozhilov, Executive Chairman of Unimasters, a freight forwarder operating in Eastern Europe.
- Vivek Vanwari, ex-VP at Kuehne+Nagel, now helping freight forwarders scale their sales operations through Founder & Thought Partner, Sales Therapy LLC.
This conversation is far from over. In fact it’s just the beginning. Please reach out to let us know how you see AI impacting freight forwarding—and where you think this exciting and dynamic field is headed.
Gaurav Bajaj, CEO, Solvo.ai
1.Operational Efficiencies
AI is increasingly being used to automate routine tasks, freeing up time for freight forwarders to focus on higher-value activities. “Data entry, tracking, and basic customer enquiries all consume a vast amount of time,” says Will Urban. “If you’re striving for efficiency, you can’t have your team working on those anymore. You want your entire team to be proactive, not reactive to inbound issues, especially when a large percentage of shipments still face some kind of delays, custom hold-up, missing data and reconciliation challenges.”
“By offloading process-oriented tasks to AI, freight forwarders can focus on real problem solving. You want your operational experts out there resolving critical bottlenecks and working with the shippers and all stakeholders in the logistics chain to get that shipment moving again. You don’t want them doing data entry and maintaining spreadsheets. By reducing the burden of repetitive tasks through AI, skilled workers can concentrate on customer engagement and solving critical issues, thereby enhancing client relationships and retention. The stuff that really matters,” Will says.
Nikolai Bozhilov, who leads Unimasters, a freight forwarder active in Eastern Europe, agrees that for his company AI is an all-of-business approach. “AI, and generative AI in particular, is becoming an integral part in several aspects of Unimasters activities,” Nikolai says. “We use it to streamline and automate processes across sales and marketing, operations and financial forecasting.”
For Unimasters, this has been an evolution, not a revolution. “We started to use digital labour for the first time 6-7 years ago with 24/7 software robots tracking shipments of our clients through shipping lines websites. Then we embarked on a machine learning project with AI business partners to identify patterns of last mile deliveries, optimise line hauls and plan our distribution networks.” In other words, forwarders with big growth ambitions like Unimasters need their teams to be focussed on drumming up business and not distracted by easy things technology can solve.
2. Customer Retention
Driving higher operational efficiencies is one key aspect of AI. But, all experts agree, it’s all in service of ensuring you can understand, serve and retain customers better. Sune Stilling sees predictive analytics and AI-driven decision support as being central to this aim.
“With market volatility becoming the norm, the ability to wargame, to create contingencies and to safeguard against market disruptions is a critical capability that the freight industry needs to serve its customers better” Sune says. “A shipper might flag a delay or concern they have with a shipment, the consequence of which you might not be able to model as an operator.”
“The right tech can flag these exceptions well before a shipper can, process scenarios and provide decision support to account teams,” he says. The decision support is also finding applications in determining how you should contract with your customers: do you go spot? do you go long term contracts?. In other words, leveraging AI for early detection and proactive action strengthens the relationship and delivers previously unseen value.
Vivek Vanwari, strongly agrees, noting that AI can improve the quality and quantity of customer interactions. “In forwarding, the relationship is so important. The comfort level, the trust that different layers of the organisation need to build with the client is super critical,” Vivek says.
For Vivek, serving shippers faster and better can have a profound effect on retention. “If I’m at any level in sales, a sales leader or senior manager, the amount of time that gets lost in trying to find information during a contract period, for example, is huge. The moment you cut this down from 10 hours to ten minutes, your number of sales, your quantity and quality of outreach to customers is going to dramatically improve. That is a huge win.”, says Vivek. As an example, this can be achieved by using automated quoting engines or even Solvo.ai’s own door-to-door pricing optimisation engine that has the potential to free up to 25% of day’s work. More time away from quoting equals more customers served.
3. Improving Margins
At the end of the day, what matters most in this industry is margin with an average EBIT of 2 – 4%. As Sune puts it: “The industry is nothing like 20 years ago where nobody knew what anybody was paying. Today, shippers have a pretty good indication of the shipping rates based on indices such as FBX. So, as a forwarder, you need to find creative ways to improve margins”.
For Solvo.ai, the dynamic nature of pricing freight presents its own distinct set of opportunities. Each forwarder is unique—they’re different sizes, based in disparate locations and pursue wildly different business strategies. What Solvo.ai is doing is using technology to empower forwarders with an ability to create a tailored pricing strategy that caters to customer behaviour and expectations.
Over his 30 year Freight Forwarding career, Will has learned just how important pricing is in an industry that runs on thousands of static rule-based processes. “How do you connect the strategy in the boardroom to the sales execution on the ground? That’s the million dollar question. There’s always been a big disconnect in that sense and implementing AI that helps marry those two together is the path to improving the bottom line.”
Some final thoughts:
Forwarders I speak with regularly share their need to have better oversight and control. Many forwarders expanded at such a pace that decentralisation and country-managed P&Ls were the norm. We’re in a new era, though. One where the customer demands transparency and zero-headache shipping. This has forced forwarders to re-evaluate the customer approach and the technology stack that helps them deliver. Ultimately, if they can’t control their first point of engagement (the rate they offer, the speed it’s delivered at and the margins they make), they’ll struggle to be seen as a customer-centric provider or survive in volatile markets. That first engagement sets the tone for the entire relationship and it’s one forwarders can’t afford to get wrong.
Those predicting technology as a threat to the industry are missing the point. It’s about the evolution of a forwarder, combining human expertise with AI insights that will deliver forwarder 2.0: one with operational efficiencies, retained customers, and improved margins.
What do you think? Let’s have a conversation.
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