- Businesses trading abroad from the U.K. waste about 3 hours per shipment requesting and funneling data between trading partners via phone or email, where much of that data exists online, according to an analysis of 100 shipments by Zencargo, a digital freight forwarder.
- It's a game of "Chinese Whispers" for the supply chain, according to the study. In sum, more than 100 million hours of time are wasted per year in procurement, supplier management and freight-administration functions for a total annual cost of £1.5 billion ($1.98 billion).
- Trading with non-customs union partners aggravates the wasted time, Air Cargo News reports. Shipments to non-EU partners incur 17% more wasted time due to a higher customs burden.
"The job today is not just about running a factory but running the entire supply chain," Scott McLarty, a vice president at Spirit AeroSystems Holdings told The Wall Street Journal this week.
McLarty was talking about the difficulty Boeing and Airbus were having to meet delivery orders, due to strained production, but his quote rings as true for freight managers as operations managers.
Traditionally, supply chain managers have relied on freight forwarding partners to handle the nuts and bolts of international trade. Customs processes, from sending and revising bills of lading to checking for tariff compliance, can be complex to the average manager. Shippers often have to choose between ports, global carriers and inland logistics providers in unknown countries for their products.
Freight forwarders trade their expertise on these processes, contract rates with carriers and general trade lane know-how at a premium to spare companies the burden of details. Freight forwarding is a service, not a commodity. It's not just about getting post-Brexit goods cleared in less time, but with the best route and rate, possible.
Zencargo's study aims to make it clear a reliance on phone calls, emails and individuals for these processes is, in fact, wasteful. It seizes on Brexit to make the case that customs compliance is about to get tougher in the U.K., and shippers should seek out digital processes to avoid wasting time and money.
“The study demonstrates the urgent need for supply chain innovation as a route to solving the productivity puzzle," Zencargo CEO and co-founder Alex Hersham said in a statement. "The adoption of simple technology that helps automate communication can deliver productivity gains now to the tune of £1.5bn per annum."
"No mater how digital you are, cargo has to move physically from point A to point B," @DBSchenker CEO Jochen Thewes tells #TPM2018 in excellent keynote address— Peter Tirschwell (@PeterTirschwell) March 5, 2018
Digital forwarding has become a bit of a fad in the past years, with technology-enabled startups rising to "disrupt" the industry of transporting goods in droves. The industry, we wrote in 2016, may be at a crossroads thanks to them, as new technology players push older companies to innovate, or die.
An Expedia-like portal does not take into account the likelihood of delays or customer service levels if something goes wrong. However, even traditional forwarders argue if these existed to provide full supply chain visibility, inefficiency costs would indeed, decrease.
Now, the likes of Zencargo have to compete with global power players in their own game. DHL launched a digital freight forwarding platform (CILLOX) last year, as did A.P. Moller - Maersk with Twill.
The question today is not whether such platforms will exist or save costs in the future, but which companies will break their tools into the market and get shippers to adopt these more quickly.
"We should not be blinded by all these digital companies," Lars Jensen of SeaIntelligence Consulting told attendees at JOC's TPM 2018 in March. "We should not think change can only come from small digital startups."