International freight: The ecommerce revolution's next ten years

With powerful technology, increased funding, and a rise in the importance of transparent international freight, accessible technology can reshape supply chains.

Thu Jul 13 11:29:00 EDT 2017
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In 2016, for the first time ever, annual ecommerce sales passed the $2 trillion mark. While consumers only see the “e” in “ecommerce”, the companies enabling online retail juggle the physical practicalities of commerce with the digital complexities of online sales, from sourcing and importing to pricing and last-mile fulfillment.

As online sales permeate consumer lives, other industries have evolved to support it. Take, for example, courier shipping. Ubiquitous “free shipping” promotions - first offered in the early 2000s - together with a dependence on transparent and rapid last-mile delivery has inexorably tied the fates of ecommerce and courier shipping.

Commerce today is characterized by “flatter supply chains A small manufacturer in Shenzhen can reach across the world and sell directly to consumers online, while a midsize New York business can source directly from multiple factories, import online and sell products across a variety of internet platforms.

More than anyone, the beneficiaries of these supply chain changes are smaller companies. Small and midsize businesses represent over 97 percent of US importers, while the pace of their import growth exceeds that of enterprise counterparts. It’s no coincidence that both Amazon and Alibaba are currently engaged in massive efforts to facilitate international importing and sales. Amazon has registered as a “freight forwarder", leased airport space in the United States, and continues to ramp up Fulfilled By Amazon, its third-party fulfillment service. Meanwhile, a group led by Alibaba’s Jack Ma is in the process of investing over $16 billion dollars in revamping Chinese logistics for better cross-border sales.

The Rise of Logistics Technology

Inbound logistics is a complex weave of thirty-party logistics providers (3PLs), warehousing, customs and sourcing agents. Over the last five years, this sector has witnessed meteoric growth in technology development. Investors have been quick to follow. CB Insights estimated that 2016 Supply Chain and Logistics technology investments exceeded $5 billion, up 2X from 2015 and well over 5X from 2015. As a result, instant freight quoting and online management, better business intelligence insights, improved LCL tracking, and more similar capabilities are now available for end-users large and small.

The technology to catch up international freight with courier freight is inevitable. On average, 40 containers are shipped a year for every employee at the world’s largest ocean forwarder. Meanwhile, 11,290 packages are handled for every employee at one of the larger express package handlers. While goods will likely continue to move by containers for the foreseeable future, the way the underlying data behind the freight moves is evolving rapidly.

With powerful technology, increased funding, and a rise in the importance of transparent international freight, accessible technology can reshape supply chains.

One startup company driving real change is Freightos, creators of one of the world’s online international freight marketplaces and a Pitney Bowes partner. Backed by technology used in-house by over 1,000 logistics providers, the free Freightos Marketplace enables businesses to easily compare, book, and manage freight shipments from dozens of freight forwarders.

As part of their efforts to increase logistics transparency, Freightos also offers the free Freightos Index, a dashboard for tracking live global freight rate trends, relying on a database of hundreds of millions of data points.

Freightos’ online freight marketplace lets you easily book and manage freight with instant door-to-door rate comparisons from dozens of forwarders, shipment management, and 24/7 support from real freight experts.

As global trade capabilities expand for businesses of all sizes, logistics solutions providers will continue to provide the technology, and more importantly, the expertise, to help businesses capitalize on a more-connected world.

As part of the Freightos-Pitney Bowes partnership, Pitney Bowes customers are eligible for $200 of credit towards your first shipment of $1,000 or more.  Sign up free here to get started.