Top Challenges Facing the Freight Forwarding Industry in 2021

With the ongoing rollout of the new vaccine and more concentrated attempts to prevent the spread of COVID-19

With the ongoing rollout of the new vaccine and more concentrated attempts to prevent the spread of COVID-19 well underway, many expect 2021 to be a year focused on recovery. Despite the damage control that’s been attempted so far, there’s no doubt that the pandemic has left a permanent mark on global supply chains and the freight forwarding marketplace.

To no one’s surprise, this has left a lot of challenges for freight forwarders. As we all settle in to take on what 2021 has to offer, here are the top challenges the industry can expect moving forward:

  1. Shifting demand

The pandemic played a huge role in boosting e-commerce demand to an unprecedented level in 2020, and the spikes that many online retailers experienced are not showing any signs of slowing. Because businesses were essentially forced to transition from brick-and-mortar stores to maintaining an almost exclusively online presence in a matter of months, forecasting e-commerce demand has been a lot more difficult for them and their supply chain partners. It also doesn’t help that consumer spending patterns have been wildly unpredictable as well. For forwarders, this means that you’ll need to be quick on your feet when it comes to responding to your customers’ needs.

  1. Capacity limitations

2021 is predicted to be a seller’s market, so those who don’t control the capacity need to prepare for a continued struggle to secure what they can. It’s a mess out there right now for importers. As vaccines become readily available and supply and demand start to go through their typical cycles, these capacity issues should improve over the long term, but that still remains a bit of an unknown. In the meantime, however, it’s important for forwarders to strategize the best ways to manage the short-term ups and downs in capacity and shipping rates by putting effort into things like strengthening their carrier relationships.

  1. Visibility expectations

Digitization is no longer optional. If you don’t have technology that provides you with real-time freight visibility and allows you to make data-driven decisions, then you’re going to be at a severe disadvantage in 2021. And by visibility, we don’t just mean providing a container’s location; visibility includes having up-to-date rates as well as making all kinds of data available to everyone who needs it throughout the supply chain. It’s crucial for forwarders to work on improving visibility within their transportation operations because that’s what will give them the insight they need to proactively deal with issues before they have a chance to produce costly supply chain disruptions. Increasing visibility will not only positively impact your bottom line, but it will also help you increase your customers’ confidence in your ability to manage their freight.

  1. Cyberattacks

One major downside to the forwarding industry’s digital evolution is that cyberattacks appear to be evolving too. Malware is going to be a major concern throughout 2021 for many forwarders, especially those who work from home. While this is not exactly a new problem, advancing technology requires sophisticated protection against advancing cyberattacks, so forwarders will need to step up their security measures to protect data integrity and keep customers at ease.

It’s important for forwarders and their shipper customers to understand the hurdles they will likely face over the next year, so they can create and integrate more effective strategies that will keep their supply chain processes flowing smoothly. Visit GAMA to learn more about how we can help you overcome challenges like these in 2021 by bringing more automation and security into your freight forwarding operations.