• Articles

  • About

  • Contact

  • More

    Logistics Technology

    Are Logistics Start Ups Focusing on the Right Areas to Disrupt?

    March 28, 2017

    |

    Kenneth

     

     

    If I were to build a logistics start-up, it would not be to disrupt the $10 trillion shipping industry (or whatever other unthinkably huge number some start-ups use to describe the size of the freight forwarding market). I don’t have the stomach for it.

     

    Of course, the global logistics markets are massive but the solution many start-ups are bringing to market severely oversimplify the extremely complex process of international shipping.

     

    Rate shopping for an ocean container rate is not like booking an Uber or a flight with Expedia. Any shipment moving between countries involves a lot of documentation and coordination that does not get taken care of with a few clicks on a website.

     

    Real shippers with real shipping volume know the amount of work that goes into every international shipment. They know the deal.

     

    Most new booking sites downplay how hard the process really is. Even less talk about, or understand, the deep problems in the industry either - like what’s happened at Hanjin, historic rate volatility and mess that is surcharges. These are real problems and a threat to ANY player in the market – big or small.   

     

    Then again, the biggest challenges may present the biggest opportunity.

     

    The main reason for the perception the freight forwarding industry is so ripe for disruption is based on the fact there are a lot of small and medium sized providers still relying on manual processes to get stuff done. This may be true but there are plenty of big, established freight forwarders operating with technology and completely automated processes.

     

    These are companies willing and able to protect their market share by investing however they need to. In other words, they will not go down without a fight.

     

    Aside from forwarding being a market that is more competitive than many give it credit to be, it’s also not growing as quickly as others.

     

    Ecommerce and online retail present a much more dynamic opportunity for many reasons.

     

    New companies are going on-line every day and markets are opening up around the world. While at the same time all of them, even established retailers, are struggling with the challenges of multi-channel fulfillment, warehousing, returns, packaging, carrier selection... the list goes on.

     

    Plus, faster and cheaper final mile delivery is the obsession of the entire industry. Because online retail is such a new phenomenon, there is none of the “old guard” mentality that exists in the freight shipping world (UPS, FedEx, and USPS notwithstanding).

     

    It’s a time of great transition for the retail industry. The entire retail market is in flux trying to figure out ecommerce and everyone needs help. To me, this represents the most fertile ground for logistics technology disruption

    Share on Facebook
    Share on Twitter
    Please reload

    STAY UPDATED

    POPULAR POSTS

    Why Is It So Difficult to Book a Container Shipment with a Freight Forwarder?

    June 13, 2017

    Freightos' Story: It's Not Luck, Finding Product/ Market Fit Takes Vision

    June 7, 2017

    5 Big Problems for Companies Who OffShore Manufacturing

    May 31, 2017

    How Logistics Technology Haven Defined It's Market to Gain Traction

    May 16, 2017

    Great #logtech Read from Zipline Logistics: Uber, Drones, Autonomous Trucks, and API. Oh My!

    May 3, 2017

    Logistics Technology Marketing - Define Your Use Case

    April 28, 2017

    Why Warehouse Jobs Are Safe from Robots

    April 20, 2017

    The Logistics Trend Behind The Latest Trend

    April 19, 2017

    Honest Perspective on the State of #logtech in Ocean Shipping

    April 12, 2017

    The Assertion Most Shippers Don’t Use a TMS is Tired and False - Let’s Do Better.

    April 6, 2017

    Please reload

    TAGS

    Benchmarking/ KPIs

    Big Data

    Cost of Ownership

    Freight Forwarding

    Gap Analysis

    International Shipping

    Logistics Content Marketing

    Logistics Marketing

    Logistics Sales

    Logistics Techology

    Manufacturing

    Purchasing

    Self Improvement

    Startups

    Supply Chain

    TMS

    Warehouse

    Please reload

    • LinkedIn Social Icon
    • Twitter Social Icon