Welcome to the 39th edition of The LogTech Letter, a weekly look at the impact technology is having on the world of global and domestic logistics. Last week, I looked at whether the logistics industry can ever escape its fragmented nature. This week,
This exact reason, is why I still think if a solution company can create a common (TMS) platform that is easy to become a part of, and covers all the key parts of the complex forwarding process, on a pay-as-you-go model, it will simply take over.
I see so many freight forwarders all involved in hugely complex TMS projects, all setting up the same thing over and over and over again, at massive cost. The solution they all need is not so different.
My bet is, that if one of the digital forwarders can get enough industry know-how into their systems (end-to-end), and then open it up to all at a reasonable cost, it will cause a massive change in the industry. That would be the true AirBnB moment, where every FF asks themselves the same question that every rental agency did, why should I create my own service portal when I can live off the margins that I get from a pre-built portal?
Fascinating, once again! I continue to consider you the smartest freight tech writer out there, Eric! Your ability to relate to the reader and draw parallels to get your point across is the icing on the cake.
Regarding standards, for years I've suggested to the largest global freight players to sit down together, formally announce an open "standards project", and invite all comers to join. Yes - it's a long road, but it's been done in other industries before and the prospects are worth the effort.
In a prior life I was DEEPLY involved in the digitization of the insurance industry (over 30 years ago). While I won't get into the details here, what used to be 5,000+ different proprietary "forms" for a claim to be filed, an insurance quote to be started, or for the "declarations" of what an insurance policy actually contained, the industry led project turned all this into ONE single form for each transaction, used in both paper and digital format, to get the same job done faster, cheaper, and across different industry entities.
It worked - and it still works today...and the organization that started it (ACORD) still exists and the ENTIRE industry relies on them for standards today (see acord.org). They are an INDUSTRY OWNED non-profit, and have transformed the insurance business into a DIGITAL case study on how an industry can work together IF LED FROM THE FRONT BY INDUSTRY LEADERS TO MAKE THINGS BETTER.
Great article Eric, as always.
This exact reason, is why I still think if a solution company can create a common (TMS) platform that is easy to become a part of, and covers all the key parts of the complex forwarding process, on a pay-as-you-go model, it will simply take over.
I see so many freight forwarders all involved in hugely complex TMS projects, all setting up the same thing over and over and over again, at massive cost. The solution they all need is not so different.
My bet is, that if one of the digital forwarders can get enough industry know-how into their systems (end-to-end), and then open it up to all at a reasonable cost, it will cause a massive change in the industry. That would be the true AirBnB moment, where every FF asks themselves the same question that every rental agency did, why should I create my own service portal when I can live off the margins that I get from a pre-built portal?
Thanks again for your great work.
Christian
Fascinating, once again! I continue to consider you the smartest freight tech writer out there, Eric! Your ability to relate to the reader and draw parallels to get your point across is the icing on the cake.
Regarding standards, for years I've suggested to the largest global freight players to sit down together, formally announce an open "standards project", and invite all comers to join. Yes - it's a long road, but it's been done in other industries before and the prospects are worth the effort.
In a prior life I was DEEPLY involved in the digitization of the insurance industry (over 30 years ago). While I won't get into the details here, what used to be 5,000+ different proprietary "forms" for a claim to be filed, an insurance quote to be started, or for the "declarations" of what an insurance policy actually contained, the industry led project turned all this into ONE single form for each transaction, used in both paper and digital format, to get the same job done faster, cheaper, and across different industry entities.
It worked - and it still works today...and the organization that started it (ACORD) still exists and the ENTIRE industry relies on them for standards today (see acord.org). They are an INDUSTRY OWNED non-profit, and have transformed the insurance business into a DIGITAL case study on how an industry can work together IF LED FROM THE FRONT BY INDUSTRY LEADERS TO MAKE THINGS BETTER.
Tim Higham
CEO
AscendTMS