Freight Forwarders: Evolution, Technology, and Markets

This report examines the evolving role of freight forwarders in international trade, highlighting the impact of technology and globalization on their functions. It explores how technological advancements, such as artificial intelligence and the Internet of Things, have improved outcomes at customs borders, enhancing security, streamlining processes, and fostering better relationships between shippers, freight forwarders, and customers. The report also delves into situations in foreign markets that necessitate the extensive knowledge of freight forwarders to successfully complete international transactions on behalf of their clients, emphasizing the complexities of global supply chains and the need for adaptability within the freight industry. Furthermore, it explores the factors contributing to the changing roles of freight forwarders, including technology trends and globalization, which have driven the need for innovation and increased value-added services such as warehousing, distribution, and vendor management. The report uses Harvard style referencing and covers topics from Modules 1-12 of the JNB254 Principles of Freight Forwarding course.

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Shippers and freight forwarders
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Table of Contents
The factors and trends that have contributed to this evolution.................................................................3
How technology has improved outcomes at the customs border for shippers and freight forwarders......6
Situations in foreign markets that require an extensive knowledge by freight forwarders to complete an
international transaction on behalf of its client........................................................................................9
References.................................................................................................................................................11

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Shippers and freight forwarders
The factors and trends that have contributed to this evolution
The role of freight forwarders had been changing for the past few years. The problem
associated with supply and demand is one of the main forces as far as the human history is
concerned. The production of goods and services across the world is associated with the need for
them to be transported for future use of consumption. During the trading error, the means of
transport was simple to use and was majorly performed by wagons and animals. However, the
need for different people to explore fully the different trading opportunities across continents and
countries led to new transport means such as freight forwarding (Burke, 2011). More so, the
Industrial Revolution that occurred during the eighteenth and the nineteenth centuries further
facilitated faster transportation of goods across different areas. Today, the products that different
people consume travel across the global chains of supply to reach different people. The
production of such goods and services, transportation, inventory control distribution and other
aspects contribute of today’s chains of supply. As such, chains of supply continue becoming
more geographically intricate; their supply deeply depends on the expertise employed by
different intermediaries in transport including the freight forwarders (United Nations Economic
Commission for Europe, 2012). The following are the different factors, which have contributed
to the changing roles and functions of freight forwarding (Burke, 2011).
Technology trends or changes have significantly contributed to the changing functions of
freight forwarding today. Different technologies have come up today with an intention of
optimizing different risks associated with the risk management associated with today's supply
chain. The world today is highly committed towards discovering new technologies in order to tap
different business related opportunities. Freight on the other hand is one of the most fundamental

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links in relation to the concept of supply chain since it helps in the transportation of goods to
different users. Because the process of freight forwarding becomes more challenging, every day,
new technology are being adopted with an intention of dealing such a complex and delicate
process (Baluch, 2008). Different new technologies have been adopted by different freight
forwarding industries including artificial intelligence, the internet of things, and others. The
current developing technology has given the freight forwarding industries an opportunity to
undertake new and more complex tasks as far as their industry is concerned. Today’s changing
technology trends have facilitated the use of technologies such as Artificial intelligence in the
freight industry today. Artificial intelligence in the freight industry is a science that provides a
group of technologies and software for the optimization of the entire industry. The internet of
Things as far as the freight industry is concerned allows different traders in the freight industry to
connect easily to their respective merchandise. Such an aspect implies that different logistics
managers in the freight industry are availed with visibility and control over the freight
forwarding of their respective goods (Popovych et al., 2016). Furthermore, this technology of the
Internet of Things use used in fleet management, geo fencing, optimal Asset utilization tools and
many other areas (Widdowson, 2007). Such tools are fundamental in tracking the vehicle and
merchant’s real time location. More so, the use of a highly advanced GPS helps the users receive
immediate alerts when there is deviation in the transporter's prescribed path. Such a fact allows
optimization and improvement of the freight. Therefore, it is obvious that today's changing
technology trends has greatly contributed to the changing function of freight forwarding (ECA,
2016)
In addition to the above, another factor that has contributed to the changing roles of
freight forwarding is globalization. The concept of globalization has been taken to a completely

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new level and different countries are trading with each other on a daily basis. Unlike in the past,
goods and services today are being traded across very long distances suing different global
chains of supply. In order to remain strongly relevant in the transport sector, freight forwarders
are making various adjustments in order to ensure that their respective services match today's
need for goods to be shared across different continents or countries across the globe. As far as
today's Global supply chains are concerned, the functions of freight forwarders have kept
changing every day. Today’s supply chains unlike in the past include various trading partner
groups, whereby logistics is the central aspect towards ensuring that such chains are held
together. Logistics deals with the process of implementing, planning, and the control of the
storage of different goods, the efficient flow, and the information (Neise, 2018). Today, global
logistics has become a greatly demanding aspect and as the different savings associated with the
efficiency of the supply chain become more attractive today, the distribution, procurement
outsourcing and the return logistics has become a common trend today. In order to deal with
today's changing global demands, the freight industry had to make new changes and adaptations
in order to deal with today's changing world. Furthermore, the fright industry adopted different
logistics tools in order to add more value to its respective supply chain services. Among these
includes warehousing, distribution, supply management, vendor management inventory,
postponement and different ancillary services including quality control, weighing, labeling and
many others. The invention of such logistics tools with an intention of adding more value to the
freight industry's services across the world has greatly contributed to the changing functions of
associated with the freight forwarding industry (Lun Et al., 2010).

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How technology has improved outcomes at the customs border for shippers and freight
forwarders
The invention of technology today has played an important role in improving the
outcomes at the customs border for both freight forwarders and shippers. Today, freight
transportation technology does not differ from that which is being used in many other industries.
As far as the customs boarder is concerned, technology is used for different services including
backroom integration and management, mobile tracking and communication and the use of
internet applications. As far as backroom integration and management is concerned, shippers and
freight forwarders in the management of their internal processes use technology. More so, it is
used in ensuring that such processes are always linked through information sharing both in the
internal organization and with customers and suppliers. As far as mobile tracking and
communication is concerned, technology is employed in tracking different location of rail cars,
trucks, trailers and many other mobile assets for the shippers and the freight forwarders including
the different items that they carry. In relation to mobile tracking and communications, shippers
and freight forwarders are using every technology ranging from GPS receivers and barcodes. As
far as the different internet applications are concerned, the technology of internet is currently
playing a very important role as far as shippers and freight forwarders are concerned. Such
companies are employing the technology of internet in their electronic commerce. The internet
technology is currently being applied in the freight industry due to its wide flexibility and access
in helping different companies to link to different types of Web, legacy systems and client
server. Such properties play a role of helping different companies it easily develop different
applications for exchanging different data (Alav, 2016).

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Technology has greatly helped in the improvement of security as far as shippers and
freight forwarders are concerned. Through technology, such companies are able to work using
different technological tools in monitoring their respective processes. A case example can be
taken from the fact that technological has enabled the use of tools such as the internet of Things
by freight forwarders and shippers in delivering their respective services. Through the Internet of
Things, different freight forwarders and shippers are able to keep their track of their respective
merchandise. More so, the technology provides different logistics managers to have full visibility
and control of their respective goods. The Internet of Things uses works with different optimal
asset utilization tools, the public transit management, and geo-fencing in ensuring that the real
time location of the different goods is always fully monitored hence improving their security.
More so, the technology allows the use of tools such as the GPS, which allow different managers
to constantly receive alerts as soon as their respective drivers make deviations from their
originally prescribed path. Therefore, different advanced analytics of the freight companies are
able to fully monitor their respective goods hence ensuring that they are secure (Alav, 2016).
In addition to the above, technology has allowed the improvement of relationships
between shippers and freight forwarders and their respective customers hence improving
outcomes at the customs. Through technology, freight forwarders and shippers are able to use
tools such as the advanced machine learning. Machine learning is one of the main algorithm
categories, which enables different software applications to make accurately predictions about
different outcomes without being programmed in a highly explicit manner. One of the major
premise as far as machine learning is concerned is to allow the building of an algorithms which
can obtain input data and them employ statistical analysis in making a prediction about the
possible output as it keeps updating all the new data that is available. Shippers and freight

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forwarders use the technology of machine learning to accurately study and predict the behaviors
of their respective customers. A case example can be taken from the fact that such freight
companies use social media platforms such as Face book and others in order to provide to its
respective users' different recommendations putting into consideration the needs of their
respective customers. The different proposition associated with such platforms is in most cases
correct or right because the customers' online behavior is closely monitored. More so, the
Logistics department of freight forwarders and shippers use such a platform to accelerate and
optimize their decision making pace. Moreover, this tool's capacity expands beyond its mere
human related abilities since it employs different real time dynamic attributes in customizing
their respective analytical models in optimizing their supply delivery performance and
optimizing their respective routes. Therefore, such technology allows them to provide their
respective clients with the best services hence improving their respective relationships with their
customers (Laaroussi, 2018).
In addition to the above, technology used by shippers and freight forwarders allows
problem detection and optimization. Through technology such as the Internet of Things,
shippers, freight forwarders and the suppliers are able to keep their eyes on the merchandise
under travel in the cargo. Therefore, the supplier at home is also bale to keep tracking and
connected with all the merchandise as it travels from one destination to another. Such a
technological application expands beyond its role of protecting the merchandise but further
allows the detection of different problems. Perishable goods can be effectively monitored and
optimization can easily be made in case any problems are identified with the goods through
constant monitoring of the goods. Through technology such as the Internet of Things, both
shippers and freight forwarders can be able to detect different problems and solutions or fix them

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as soon as possible hence improving outcomes at the customs border (United Nations Economic
Commission for Europe 2012).
Situations in foreign markets that require an extensive knowledge by freight forwarders to
complete an international transaction on behalf of its client
Irrespective of the fact that International trade has been in occurrence for a long time in
today's world, we cannot assume that the system is familiar to everyone in that kind of business.
As far as foreign markets are concerned, there are situations whereby individuals require a
freight forwarders’ extensive knowledge in order to complete an international transaction. One of
the situations in foreign markets that strongly require the freight forwarders’ extensive
knowledge is when the client’s transaction requires huge paperwork or documentation
(Vineyard, 2014). Foreign markets as far as importing and exporting is concerned can sometimes
involve numerous regulations and documents that a client may find very unfamiliar. Freight
forwarders become the best option for these clients in this case since they have a lot of
knowledge as far as international businesses are concerned. Moreover, freight forwarders
understand better different shipping companies, the customs laws of different countries and all
the requirements of the documentation process (Llamazares, 2017). Using a freight forwarder in
this case as a logistics partner saves the client from the trouble of failing to conduct business due
to lack of knowledge about such processes. A freight forwarder in this case saves the client from
the trouble potential setbacks and difficulties incurred in the provision of highly reliable
transportation of goods or products at greatly competitive rates. Therefore, a freight forwarders’
knowledge is greatly required when the client dealing in international market more especially
when the client or the in-house resources are not well versed with the different procedures as far
as the international shipping is concerned (Verma, 2017).

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In addition to the above, another foreign market situation that can require a highly
extensive knowledge of a freight forwarder in completing an international transaction for the
client is when the client is interested in saving some money as far as the international transaction
is concerned. It ought to be remembered that Individual clients unlike freight forwarders have no
access to moderate rates for the different services as far as the foreign markets are concerned.
The freight forwarders on the other hand majorly charge highly modest rates for their respective
services and they can still access discounts as far as the shipping services are concerned. A
situation might arise where by the shipper as far as the international market is concerned is
interested in receiving a discount for the different shipping services and therefore the best option
in this case is using the knowledge of a freight forwarder (Widdowson & Holloway, 2011).
Foreign markets involve numerous services including packing, storage and crating, export
documentation and many others. Any exporters whether small or medium sized would be
interested in having access to such discounts in order to minimize his or her operation costs. In
addition to the above, another situation that might require the intervention of the knowledge of
the client is when the client is entering a new market or when the marketing is to be done with in
a new country. Clients who are interested in conducting business with in new countries or
foreign markets require the knowledge of freight forwarders. Such an assertion is because every
country has different processes as far as the export documentation processes are concerned.
Individual clients lack knowledge in dealing with all such processes in a new country including
the regulations, the documentation requirements, banking practices and many others. Such a
situation calls for the intervention of a freight forwarder since they always make adequate
research concerning all such processes in different countries (Heaney 2013).

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References
Alav H (2016). Mitigating the Risk of Fraud in Documentary Letters of Credit. Baltic Journal of
European Studies, pp. 139-153.
Alav H, (2016). Mitigating the Risk of Fraud in Documentary Letters of Credit. Baltic Journal of
European Studies, pp. 139-153.
Baluch, R. (2008). The Changing Role of the Freight Forwarder, TIACA, pp. 1–8.
Boschian V. (2012). Analysis of Impact of ICT Solutions in International Freight Management.
Retrieved
from;https://www.researchgate.net/publication/227580429_Analysis_of_Impact_of_ICT_
Solutions_in_International_Freight_Management
Burke, R. (2011). Selected pages from chapter 1: 47-52 (in) International Logistics and Freight
Forwarding Manual: A Street-Smart Guide to International Trade and Transportation,
Burke, Russell John, Tullamarine, pp. 50–52
Burke, R. (2011). Chapter 8. Packing, stowing, marking and containerisation of cargo (in)
International Logistics and Freight Forwarding Manual: A Street-Smart Guide to
International Trade and Transportation, Burke, Russell John, Tullamarine, pp. 211– 226
& pp. 230-231.
ECA . (2016). Chapter 2. Export procedures (in) Export Council of Australia: Australian export
handbook, [Sydney NSW], pp. 75–123.

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Heaney, B (2013). ‘Supply Chain Visibility – A critical Strategy to Optimise cost and service, pp.
1-4.
Laaroussi T.F. (2018). Technology trends in supply chain freight forwarding. Retrieved
from;https://www.waystocap.com/blog/technology-trends-in-supply-chain-freight/
Llamazares O. (2017). What Is A Freight Forwarder? Types And Functions. Retrieved
from;https://www.globalnegotiator.com/blog_en/freight-forwarder-forwarding-agent-
meaning-definiton/
Lun, Y.H.V., Lai, K-H., Cheng, T.C.E. (2010). 'Shipping and Logistics Management [ebook]',
pp. 122–126
Neise, R. (2018). Container Logistics: The Role of the Container in the Supply Chain, Kogan
Page Ltd., United Kingdom pp. 92-97
Popovych, P., Shyriaieva, S., & Selivanova, N. (2016). Analysis of the interaction of participants
freight forwarding system', Journal of Sustainable Development of Transport and
Logistics, 1, 1, 16-22
United Nations Economic Commission for Europe. (2012). Organization for Security and Co-
operation in Europe., 2012, 'Handbook of Best Practices at Border Crossings – A Trade
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operation in Europe .,2012,'Handbook of Best Practices at Border Crossings – A Trade
and Transport Facilitation Perspective [ebook]', pp. 67–68.

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Verma S. (2017). Why there is a need for a freight forwarder. Retrieved from;
https://freighthub.com/en/blog/need-freight-forwarder/
Vineyard J.(2014). What Does a Freight Forwarder Do & Do You Need One?. Retrieved
from;https://www.universalcargo.com/what-does-a-freight-forwarder-do-do-you-need-
one/
Widdowson, D. (2007). 'The changing role of customs: Evolution or revolution? ', World
Customs Journal, 1, 1, 31-37
Widdowson, D., Holloway, S. (2011). Chapter 6. Core border management disciplines: Risk
based compliance management (in) McLinden, Gerard., World Bank: Border
management modernization, World Bank, Washington, D.C. pp. 98-10