Will Logistics Technology Take My Job?

By John Edmonds, Research & Marketing, Freightos

Who hasn’t asked themselves whether technology is threatening their job?

Of course, logistics is far from immune. A White House report from 2016 estimated that 80%-100% of long-haul trucking jobs may be threatened by artificial intelligence. It’s not only the manual jobs. Experts predict that in many industries, technology will start working it’s way through managerial and professional positions.

Freight forwarders themselves have another concern. If middlemen compete on either service or price, and digitalization standardizes service levels – then commoditization could have companies shedding staff just to stay competitive. Right?

Wrong.

Freight Forwarders Are Optimistic

Only 2% of industry leaders believe that the industry will be commoditized anytime soon. The lion’s share of logistics professionals (a full 60%), believe that the role of logistics providers will actually expand.

A more recent study on the topic of freight differentiation found that over 70% of senior forwarders envisage the cost savings from automating processes being ploughed back into growth. Forwarders aren’t taking the money and running – they’re building up and into the future.

How does such optimism reconcile with that White House report? One reason forwarders are confident would be that their customers are increasingly valuing service over price. In other words, digitalization and forwarder success go hand in hand.

Will service differentiation survive freight digitalization?

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Technology Takes Jobs?

Technology takes jobs, and the classic example is bank tellers. Except, a clever economist recently checked the facts, and it turns out that as ATMs were being rolled out,  the number of bank tellers actually went up. And they have stayed up, despite the general takeup of internet banking.

That White House report on artificial intelligence did conclude that digitalization devours jobs. But it also forecast that digitalization will make many other workers more productive and in-demand. That makes sense. We were recently spoke to several digital enterprise architects at freight companies – a profession that until relatively recently didn’t exist. And the nett effect? When Pew canvassed technology experts, the majority (albeit, a slim one) believed that technology will create more jobs than it displaces.

Freight companies are no strangers to technology either. A recent Drewry paper on the impact of freight industry digitalization noted that 3PLs are already investing in sales automation. They confidently predict that nearly all transactional activities with low returns, from lead generation to freight settlement, will eventually move online.

While middlemen may be at risk from technology, most forwarders today go well beyond that, functioning as contract logistics providers, domestic truckers, and even software providers. Roland Berger predicts that tomorrow’s winners will tap technology to shift from the traditional intermediary role to one of three options:

  • Becoming more asset-based
  • Becoming more service-based
  • Transforming into a specialist service provider.

Meanwhile, forwarders that won’t (or can’t) change business model, may indeed face commoditization.

So Are Forwarder Jobs At Risk?

Companies that don’t evolve face extinction. Evolution 101.

In-depth knowledge driving real service will never go out of fashion. Anticipating issues, troubleshooting, and customer advocacy will still be in demand. These processes may be augmented by computers, cutting out the forms, emails and calls, but the companies that leverage these changes to improve processes will only flourish.

The other good news about tech that helps companies work faster is the liberation of technology from the grasps of major corporations. Today, small businesses can benefit too.

The ERPs and CRMs that were the enterprise company’s competitive edge have been usurped by cloud-based software. Over 60% of the companies using Freightos logistics technology – especially Freightos WebCargo –  are small or midsize forwarders.

Video Killed The Radio Star But Podcasting Brought him Back

As Techcrunch recently put it, technology is killing jobs … and only technology can save them.

Let’s not sugarcoat it. Some job descriptions, as well as the forwarding companies that don’t differentiate, are at risk. But customers are increasingly service-conscious. For a service based industry, that speaks of salvation. The new technology promises to deliver better service, and that is why forwarding companies are optimistic. Digitalization won’t make forwarders obsolete, it will make them better. Or as Sanjay Tejwani, a VP for FCL Product at DHL Global put it:

Freight forwarding is and will remain a relationship-based industry with customers looking for the personal touch and service that freight forwarders provide. Technology will change the ways in which customers interact with freight forwarders and purchase freight forwarding services.

Sanjay Tejwani, Vice President, FCL Product & Capacity Management, DHL Global Forwarding Americas

Will service differentiation survive freight digitalization?

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