Would you ever search for “accommodation in Barcelona” on Google or ask strangers on Facebook for a place to stay when you take your wife on a weekend trip to the beautiful city of Barcelona? Of course, you won’t do that because how can you trust some guy that you have never seen before? To make a long story short: this is why Airbnb exists! They make it easy to rent a private room, ensure a high level of trust, guarantee payments, and show ratings, reviews and pictures of the flat you’re about to rent. While people find it easy to book things like accommodation online, they still share their stock lists on LinkedIn or send random, cold emails to find new partners in container logistics.
Finding partners in container logistics is broken …
Traditionally, freight forwarders have needed to attend conferences to find new partners, ask people in their existing network “if they know anyone” or search on LinkedIn … and sometimes even send bulk emails to their mailing list with low chances of success. The old way of finding partners might work to an extent, but nowadays we have more options (thank you, Digitalization!) … what do you do if none of your peers on LinkedIn know someone who could help you? Start from scratch with research on Google, reach out to potential partners, vet them, set up legal agreements, etc. Managing several different stakeholders involves sending hundreds of emails back and forth, is error-prone and risky. As freight forwarders, we’re not part of the only industry that has to digitize its services. Just look at the banking industry (SWIFT system) or Airbnb… but how did they do it?
Why is Airbnb so successful?
As in most other industries, platforms like Airbnb have come up in the last 10 years and gained huge popularity (everybody knows AirBnB, right?). They make it easy for everyone to travel, not only because it is cheap but because they help us trust strangers. An offer on the platform usually includes nice images and has ratings & reviews by previous guests attached so you can learn from their experience. They also manage the entire payment handling and insurance process for you. If you see a great flat in Barcelona with heaps of good ratings and good pictures, you book it if it’s available. As Airbnb matches supply and demand in the travel industry, think about the following example: When going to a new country for the first time, would you rather book a room at the Hilton or a stranger’s private flat which you’ve found on the internet? Most people would book a hotel room in this case. But now there’s a third option- and with Airbnb, everyone can also become a super host.
What can we learn from that?
The situation is almost the same for most freight forwarders in container logistics. For example, when forwarders have to find available SOC containers; previously, they could only reach out to a few leasing companies or shipping lines. There was no way to connect with smaller traders or other equipment owners on the other side of the world due to the lack of trust, as well as the error-prone and manual process of organizing such deals. When managing freight, forwarders don’t have to reach out to all the different sources e.g. the carriers or customs, but rather use full-service platforms like Freightos or Xeneta. What these platforms all have in common (and I bet you’ll find a platform provider for your specific niche, too) is that they create transparency and help freight forwarders become more efficient in the process of finding new partners or customers to work with.
To be honest, compared to Airbnb it is more difficult to start using an online platform in container logistics. You can not just take a few pictures of your flat to start with, in container logistics it could require data integration and would most likely involve several stakeholders at least. But the good news is that there are easy ways to start trying out these new platforms in container logistics, too! You can just get a free demo of the product or sign-up just for a minimum period of six months to give it a try. From our own experience at Container xChange with customers like Kuehne+Nagel and Seaco Global, we can say that most companies start small, with only a few containers, but then increase their transaction volume significantly after a few weeks.
In the end, it always depends on your preferences! Don’t assume that you can shift your entire business onto platforms within a day- it will be a transition period. Both approaches, the modern and the traditional approach to doing business can coexist with each other at the same time. It depends on your perspective, for a 2-day business trip you might prefer a hotel but for the weekend leisure trip to Barcelona, you might choose Airbnb.
It’s important to give platforms a try and adapt to new digital opportunities. If we can learn something from Airbnb, it is that platforms are here to stay and we can see the same thing happening in container logistics. Why? It’s simple … people get used to prime delivery and transparency from platforms like Airbnb and Amazon … and they expect the same when doing business in container logistics!