Why it’s Time to Catch the Freight-Tech Wave
In a time of digital disruption for the Freight Industry, forwarders that have not yet begun their digital transformation may feel they have missed out on the massive opportunities that are opening up.
The perception out there is that between them and the larger global companies, combined with the emerging digital forwarders, have already gone so far ahead that they won’t be able to catch up.
History tells us that is not the case. In fact, there are real-world examples of where being ‘late to market’ becomes a distinct advantage.
The Third Wave
What is not commonly understood is how the barriers to entry go down over time and not up, and that the it’s the ‘Early Majority’ of new technology and new ecosystems and not the ‘Innovators’ or ‘Early adopters’ that are at an advantage.
Steve Case, co-founder of AOL, was asked on PBS in a 1995 interview just why people should care about the internet. Steve said that in the early days a lot of his job was explaining just what the internet was.
Steve’s book summed up the 3 waves as:
- ‘Innovators’ and ‘Early Adopters’ setting the groundwork (AOL and Yahoo)
- ‘Early Majority’ companies emerge and begin to dominate market segments (Facebook, Google, Snap)
- “Internet of everything” where every part of our daily lives will rely on an internet connection.
The freight industry is at the crest of the second wave
As of today, the pure digital freight companies in the market are moving less than 0.5% of global freight and there is no single dominant digital force in the shipping, logistics or freight forwarding industry.
The market share is small, but this is just the beginning of a trend that has been repeated in every industry that has embraced digital.
Those companies that do not take a mature approach to the changes in the market will quickly disappear, or be gobbled up by the older companies that have managed to remain a force on the market through a digital strategy.
The nimble, low-cost disruptors are now leaving the First Wave and are starting to emerge. As of yet, they only have a foothold on the market.
Like all industries, some early disruptors will fall off the digital disruption curve but others — either alone or by partnering with traditional freight forwarders — will eventually overtake the older, less flexible companies and will dominate the market.
Some of the larger companies will try to develop a competitive digital strategy by themselves to compete. However, there are two major factors against this:
1) Legacy technology, management constraints and the difficulty of transforming large traditional companies into a ‘digital first’ organization.
2) No one organization, no matter how big, can keep up with the sheer number of disruptors that will enter the market.
There is now a consensus among shippers to go digital or die.
As other industries that have ridden the digital wave have shown, the companies that embrace change and are in a position to quickly take advantage of the lessons learnt from the ‘Innovators’ and ‘Early Adopters’, will always come out on top.
If ever there was a time to grab your board and dive in, this is it. Surfs up!
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