Freightos was delighted to host its seventh annual FreighTech conference recently, bringing together leaders in freight technology and digitalization across carriers, forwarders, BCOs and tech providers once again to discuss progress achieved, explore opportunities for collaboration and imagine the future.
One of the key themes that emerged was that forwarders and BCOs – especially with the last few particularly volatile years for the industry serving as a catalyst for tech adoption – are looking to tech for better visibility and the many and varied benefits that better visibility can provide.
The following is a compilation based on select speakers at the event.
Black (Swan) is the New White
Since 2019, supply chains and logistics have seen one black swan event after another disrupt operations and impact costs starting with trade wars and the pandemic and continuing through the Ever Given, Houthi attacks in the Red Sea, multiple labor disruptions, and now a possible renewed trade war.
But as Bjorn Vang Jensen of Nanooq Consulting pointed out, recurring events shouldn’t be thought of as black swans, but as the new normal. And instead of lamenting their detrimental impact after the fact, logistics professionals would do better to learn lessons and develop strategies to be prepared for the inevitable next disruption.
We like to label things ‘black swan events’ to rationalize not being prepared for them, but most of these types of disruptions – labor, geopolitical events, weather – are all reasonable to expect.
Bjorn Vang Jensen, Nanooq Consulting
Jensen focussed on inefficiencies in long term ocean contracts – which become unreliable when unexpected changes in the market push container spot rates too far above or below contract rates – and touted pricing visibility via the strategy of linking contracts to an index to prepare for unanticipated market shocks and ensure reliability.
But the concept of investing in some hard work upfront to protect shippers and carriers from wasted time – later this “expect the unexpected through better visibility” sentiment – was shared again and again as a key lesson of the last few years with multiple examples of tech-enabled strategies.
Volatility and Tech’s Role in Managing It
As the ocean contracting example argues, arriving at better and actionable visibility involves two shifts:
To a culture aimed to prepare for and not just react to supply chain disruptions.
To determining which tools can help execute that strategy.
For BCOs like Electrolux, explained Paolo Galli, VP of Logistics, the supply chain disruptions they experienced during the pandemic caused a shift from a “playing checkers” mindset toward logistics – to playing chess.
Healthcare logistics managers, for example, were used to predictable supply chains, but that changed dramatically during the pandemic. Matthias Mentschel of Bayer explained that the lesson learned for him was the need for tech that could not only provide visibility, but also prepare them to detect and react to unforeseen disruptions.
Bayer invested in a logistics platform that integrates supply chain data and communication across internal teams and developed a catalog of strategies to be deployed in the event of a range of disruption scenarios. In this way, they are able not only to know when problems arise, but quickly make that information actionable, with a plan well-defined ahead of time.
Galli of Electrolux and Martin Polakovic of Lenovo echoed this sentiment from the shipper side saying that what they’d like most from logistics technology is better control and accessibility of their data, all in one platform – preferably the one they’re already using.
The importance of integrating data as well as the multiple tools that BCOs or forwarders are already using or adding to their stack – as explored in a previous FreighTech24 article – is key to realizing the efficiencies that tech promises. But integration is also key to this strategy of expecting another black swan, and achieving actionable visibility for when one does appear.
