WACO keynoter says forwarders must focus on digitalization rather than price

The global freight network for independent forwarders, known as WACO, met last week in Limassol, Cyprus, to discuss the state of the industry, where Lars Jensen, keynote speaker and CEO of Sea Intelligence Consulting, spoke about the perceived resistance from the forwarding community to digitalize, which the logistics community has been criticized for over the past few years.

“There is a general feeling in the freight forwarding market that the transparency that digitalization brings will lead to a race to the bottom as companies compete to lower their prices,” Jensen said, highlighting the fear from forwarders that data availability could create a trend toward increased competition for shippers’ business, and lead to thinner and thinner profit margins.

However, Jensen said that research from his consulting firm found that, in 2018, half of cargo owners did not choose the least expensive offer at the time of booking – meaning finding the lowest cost was not necessarily the top priority among customers.

“There is plenty of space to develop brand and service strength instead of focusing on pricing,” Jensen said. “Digitalization is something that should be embraced and that you cannot ignore. If you don’t jump on the train, you’ll end up under it.”

The WACO System facilitates meetings for members to network and grow their businesses, hosting two meetings a year for its network of about 120 independent forwarders in 116 countries.