The logistics industry has been undergoing a profound digital transformation, a journey articulated with striking clarity in Freightos’ latest white paper, “Global Freight’s Digital Transformation”. This transition isn’t merely about adopting new technologies; it’s about reshaping the entire ecosystem of global trade.
From Zero to One
In 2023, over one million bookings were placed via Freightos and WebCargo platforms, connecting more than 45 carriers with thousands of forwarders and importers/exporters. While representing a fraction of industry spot bookings, this milestone signifies a leap from virtually zero digital bookings five years prior, exemplifying the evolution from @Peter Thiel’s concept of “Zero to One”.
The shift towards digital has been staggering, particularly in air cargo, where digital bookings have surged to comprise over one percent of the total. This growth was fueled, in part, by the COVID-19 pandemic, which served as a catalyst, prompting airlines to digitize operations more aggressively. From early 2020 to mid-2022, digitization among airlines grew from 9% to 35% of global cargo capacity, reaching 50% by 2023. This led to a nearly 20-fold increase in digital transactions on Freightos’ platforms.
An Industry Metamorphosis
These numbers aren’t just metrics; they’re indicators of an industry revolution. The embrace of digital booking platforms reflects a broader movement towards transparency and efficiency, even amidst historical reluctance from sectors benefiting from opacity. Freightos believes that earning customer loyalty through service and reliability is far more sustainable than exploiting information asymmetry.
The tangible impact of this digitization on revenue is noteworthy. Airlines have seen a potential 25% increase in revenue from improved capacity procurement and a 15% increase when selling capacity. For freight forwarders, the adoption of digital platforms translates to expanded services and democratized access. The ability to streamline processes like payments, insurance, and customs brokerage is rapidly modernizing an aging industry.
A Bright, Digital Future
Looking ahead, the Freightos Roadmap lays out a vision for a more interconnected industry ecosystem. By expanding transaction types and accelerating industry interactions, our roadmap anticipates that platforms will play a central role in improving digital management systems with enhanced data utilization and AI. The overarching goal is not to replace human relationships but to offload manual, non-value-added tasks to focus on strategic, high-impact work.
As an exec in the logistics technology industry, this evolution presents an exciting array of opportunities. Imagine, a freight forwarder in the Caribbean can now price out a full air cargo shipment from a region like Germany instantly, avoiding the delays traditionally associated with such an undertaking. The digitization process is expected to continue, with the potential for hundreds of millions of bookings across carriers, forwarders, and shippers.
This transformation marks just the beginning. As the industry continues to embrace digital innovation, the implications for global trade and operational efficiencies are vast. The Freightos vision serves not only as a blueprint for the industry’s future but as a clear call to stakeholders to redefine what’s possible in global freight and trade. Together, we stand at the precipice of a digitally empowered future, where the only limits are those of our collective imagination.
