The digitalization of the logistics and global shipping landscape is accelerating at an incredible rate. Embracing new technologies offers both shipping companies and the organizations that work with them the opportunity to reduce costs, improve efficiency, and even enhance customer service.
While some forward-thinking organizations have been investing in digitalization for shipping solutions for years now, the focus in this area is increasing. As of 2023, a McKinsey survey found that the majority of shippers and providers plan to invest more in new technologies in the years ahead.
The main reason for this is that digitalization doesn't just help companies overcome common pain points like cost management and problems with productivity. The right technology can also help businesses navigate emerging issues, from the increasing demand for sustainability in logistics to the challenges of navigating increasing supply chain disruptions.
4 Ways Digitalization Solves Global Shipping Challenges
Global shipping processes have long presented a host of complex challenges to organizations, particularly smaller businesses with limited resources and support. However, in recent years, shipping challenges have grown more complex, thanks to the rise of new political disputes, sustainability initiatives, and evolving customer expectations.
Here are five exceptional examples of how digitalization is solving the most relevant global shipping challenges for organizations today.
1. New Fleets and Route Planning Tools Boost Sustainability
Sustainability has emerged as a critical concern for consumers, stakeholders, businesses, and government groups alike. In virtually every landscape, regulatory bodies are introducing new rules and regulations in an effort to reduce carbon emissions and protect our planet.
At the same time, consumers are increasingly making purchasing decisions based on the approach their favorite companies take to ESG initiatives. Bain and Company even found that sustainability measures can significantly improve profits for businesses of any size and in any industry.
Digitalization and technology advancements are helping to address the significant challenge of "decarbonizing" the logistics landscape in numerous ways. Companies are experimenting with zero-emission fleets powered by renewable energy rather than traditional fuels. For instance, China recently introduced the world's largest fully electric container ship.
Software built into container ships and fleet technology can also help organizations track their emissions more efficiently, ensuring they can detect opportunities to reduce their carbon footprints. Plus, software solutions empower organizations offering shipping services to companies to effectively optimize routes, reducing greenhouse gas emissions and fuel waste.
2. Digital Freight Forwarders Enhance Budget Management
For smaller companies, in particular, one of the biggest challenges of global shipping is navigating rising costs. Effective budget management is crucial to maintaining a healthy cash flow and enabling growth, but it can be difficult to plan for and manage shipping costs when they're affected by so many different factors. For instance, throughout 2024, the cost of maritime shipping has risen as a result of conflict in the Red Sea and shifting trade routes.
Digital freight forwarders can help businesses of all sizes improve and optimize budget management. Moreover, a digital freight forwarder provides small and large businesses alike with a convenient platform where they can view real-time shipping rates from multiple partners instantly, helping them make more intelligent booking decisions. They can even allow organizations to analyze changes in shipping rates over time, helping them plan ahead for peaks in demand.
The ability to plan ahead effectively, make bookings instantly, and compare rates easily makes digital freight forwarders even more crucial to reducing operational costs for businesses. This ability also helps reduce the amount of time businesses spend manually collaborating and communicating with shipping partners.
In addition to assisting businesses in optimizing budget and resource allocation, digital freight forwarders can help ensure that shipping partners continue to benefit from ongoing bookings from businesses around the world, helping the flow of trade continue seamlessly.
3. Intuitive Software Improves Analytics and Planning
The global shipping landscape is undoubtedly unpredictable, but organizations still need to plan ahead to ensure they can boost efficiency and reduce costs. The rise of advanced analytical software is helping both business leaders and shipping providers make more educated decisions.
For logistics companies, the ability to track data from IoT systems, connect it with fleet management tools, and forecast changes in demand ensures they can deliver more effective services to organizations. Logistics companies can use intelligent tools to improve shipment safety, such as AI cameras that detect risks facing container carriers.
They can also use AI solutions to detect the best route for a shipment in real-time based on weather conditions, political disruptions, and opportunities to reduce emissions. For businesses shipping products overseas, advanced analytical tools can connect the dots between multiple data points, allowing them to sidestep a range of challenges.
For instance, advanced data analysis solutions can connect warehouse and inventory management tools with data from a company's supply chain and logistics processes. With AI-powered solutions, companies can then identify innovative ways to reduce shipping costs, improve fulfillment speeds, and enhance customer experiences.
AI solutions can even surface insights to businesses about trends in the current landscape that might affect their shipping processes, helping them forecast potential delays and disruptions.
4. Automation Tackles Labor Shortages
Finally, while digitalization in the global shipping landscape will never replace the need for human workers, the rise of AI and automation tools, as well as more advanced software for team members, will help to fight back against growing labor shortages.
Talent shortages in the logistics industry are growing, and companies of all sizes often struggle to find team members who can handle everything from warehouse management to customer service. For logistics companies, automated solutions can help reduce the time team members spend on repetitive tasks like planning routes and preparing documentation.
This frees professionals to focus on more valuable activities, like checking containers for safety risks or optimizing elements of the supply chain. In the business landscape, automation in the fulfillment process can deliver similar benefits.
Automation can make it easier for companies to rapidly process orders, sharing data from ecommerce platforms with warehouse teams and logistics partners. Automation can also save staff time updating inventory data, sending requests to suppliers, or informing customers about a change in their order status. It can even help businesses deliver better customer service, ensuring buyers can track orders in real-time and get quick answers to common questions about deliveries.
Automation and AI don't just reduce the number of human resources companies need; they also improve talent retention, ensuring teams have the right tools to retain high levels of productivity.
Solving Global Shipping Challenges with Digitalization
There are numerous challenges to overcome in the global shipping landscape today. Digitalization has the potential to transform the way we address many of them. Whether it is logistics companies using IoT for real-time tracking, automation, and robotics or companies leveraging AI to enhance shipping decisions and customer service, the power of technology is impossible to overlook.
Going forward, there's no limit to what cutting-edge technology and software can do to enhance supply chains, improve logistics, and ensure the continued health of global trade.
