Magaya Releases Report on State of Digitization in Freight Forwarding
Magaya Corporation, the leading provider of logistics and supply chain automation software, today announces the release of its inaugural report on the state of digitization in freight forwarding. The report is based on a survey completed by 70 freight forwarders, 3PLs, and NVOCCs of varying sizes from around the world.
The pace of digitization in freight forwarding has accelerated since 2020, with companies increasingly investing in technology solutions to streamline operations. However, the industry as a whole still has a long way to go to capitalize on evolving technological advancements, with many organizations still relying heavily on inefficient manual processes.
The survey focused on respondents’ current state of digitization, priorities for the near future, and the challenges that stand in their way. Key findings include:
● Automation and digitization: 24% of respondents still have completely manual processes, as in no ERP or specialized freight forwarding software.
● Cloud: 49% are all-in on the cloud. The other half still have selected functions being hosted locally, putting them at risk.
● Priorities: The top 3 business concerns were customer retention, gaining new customers, and lowering costs/overhead. The top 3 IT investment priorities were tracking and visibility, general freight forwarding, and a 3-way tie between digital forwarding, rate management, and compliance. 62% of respondents are looking to expand into new service offerings in the next 12 months, with new territory coverage, warehousing, and last-mile delivery being the top priorities for expansion.
● Software market: Respondents want to see more use of AI in forwarding, with 44% saying that the market is not currently providing adequate capabilities in this area.
● Digital forwarding: 73% of respondents currently have a digital customer portal, but the features of that portal vary. Most did have the capability of booking and tracking shipments. Fewer than half were able to view schedules, accept online payments, and interact via chat with customers. Lack of budget and not wanting to change back-end systems were the biggest blocking factors holding back the companies that did not currently have an online customer portal.
● RFQ Efficiency: The average time to respond to an RFQ is 217 minutes, and the median is 30. The spread ranged from 1 minute to 2 full days.
● Insurance: Most respondents carry cargo insurance, general liability, and worker’s compensation. D&O was the least popular type of insurance at only 14%.
“When the right technology is put to good use, the possibilities are exciting. At Magaya, we are hyper-focused on providing innovative solutions that help logistics service providers speed up processes, cut out waste, and serve their customers better,” commented Gary Nemmers, Magaya CEO. “The results of this survey reinforce our vision for the future of digitization in freight forwarding and confirm opportunities abound for maximizing the benefits of technology in the industry.”
