What is the Future of International Logistics Industry? Consideration from Perspective of Small and Medium-sized Forwarder

Hello, it’s IINO.

I would like to broadcast IINO san’s Logistics Radio.

Today I would like to talk about what I think about the current international logistics industry.

Daily Logistics Radio by IINO san in 10th Mar. 2022

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Continuing Logistics Confusion

The logistics have been disrupted for a little over two years due to Corona.

Before Corona, there were few space issues and it was a price war, but after Corona, schedules are all over the place, ocean freight rates have skyrocketed.

However, when space is available, profits are higher because the profit amount is higher.

To be honest, it is a tough situation.

Many Uncontrollable Problems

Even if we get space, there are problems we can’t control, such as omit and delays.

Sales people at shipping companies also have no control.

Shippers are also having difficulties in the supply chain and they ask us to do something about it, but there are many situations where it is difficult to deal with.

Market Conditions in 2022

Then, there is the Russia/Ukraine situation and logistics is likely to be disrupted again.

Air transportation has already started to be disrupted.

There will be a strike on the West Coast of North America in July, followed by National Day of China in October and the Christmas shopping season, so it is surely flurry of activity in 2022.

Digitalization of Logistics Industry

Major forwarders are already doing this, but I don’t think it has yet penetrated the market.

Some start-up companies are emerging in digitalization of logistics.

We need to make sure we keep up with this situation, and it won’t be difficult to survive for old-style forwarding.

Shipping companies cannot hire a large number of salespeople, so they use forwarders as agents to collect cargo.

The companies also have the capital to invest in digitalization, allowing shippers to book directly without through forwarders and smaller shippers will also use the shipping companies’ systems if they are convenient.

Customs Clearance, Trucking, Warehousing, Packing

Customs clearance, trucking, warehousing, and packaging are all specialized, but the major forwarders have their own assets.

Small and medium-sized forwarders provide total logistics without assets, but as digitalization progresses, communication will become simplified.

I believe that small and medium-sized logistics companies which are not digitalized and do not have assets will have a tougher time in the future.

Until now, they have been able to do business through personal connections and local communities. However, I think it will be a bit tough if they miss this wave of digitalization.

A Period of Change in Logistics Industry

I run a forwarder in Thailand and have had a sense of crisis before Corona.

It is still unclear what the industry will look like in the future. There is no digital winner yet and no examples available for reference yet.

In this context, I am working in the area of digital media and recruitment in logistics.

There was no right answer for the media at first, and my partner denied me. After two years of doing this, I was finally able to attract customers.

Recruitment for logistics and trade seems to be a challenge as well.

I believe that we are in a period of change in the international logistics industry.

Although we do not know the right answer, I think the role of a leader is to make decisions and proceed on his own, and take responsibility if things go wrong.

Recently, the focus tends to be on confusion in the logistics industry, but I believe that we need to look to the future, such as digitalization.

That’s all for today. Thank you.