So the former CEO of DHL Global Forwarding is investing in a digital platform that links shippers with carriers and is predicting that the European freight market will evolve rapidly, driving down costs, inefficiency, and outdated practices – By which he means freight forwarders!
The strength of destabilising forces like Brexit and digitisation are gathering pace and affecting all forwarders, making it harder than ever to plan for the future and future-proof your business.
Competition is intensifying all the time in new and different ways, with emerging entrepreneurs quick to identify market opportunities and not tied to the old ways of doing things.
The old days of enhancing profitability by driving down costs and using reporting analytics have reduced available resources, creating a culture of bureaucracy and an inability to cope with fast-paced change.
Modern business embrace every communication channel – Internet, LinkedIn, Twitter, e-mail, mobile – to maintain a global dialogue with all their customers and stakeholders.
This dialogue and providing access to on-line tools (of even the most basic kind) means that the customer is integrated into the management of their shipments and will take more from the process.
At best though, these are holding strategies. Markets ARE changing and they will evolve beyond recognition, with massive casualties along the way.
If you want to stay in the game you need to change to by understanding what the trade-off is between differentiation and low costs in order to create new value propositions.
Bearing in mind that buyers don’t buy products, they buy solutions to problems ask two questions:
1. What market factors are taken for granted, that could be eliminated, or reduced.
2. What factors could be raised above the current benchmark and what could be created that the sector has never offered.
Your answers will be on the right track if they have the following characteristics:
Different from the norm
Buyers will want and need it
Profitable with an accessible price point
Ultimately you need to be ‘tuned into’ customers’ needs and react amazingly fast to fill any gaps, because if you don’t then someone else will.
Next week I will find some real-world examples to showcase forwarders that are on the right track to show you how to future-proof your business.