FIATA asked forwarding consultant, Steve Walker, who brings 40 years of successful industry experience, to share his opinion about the organization’s new digital strategy. After expressing doubts about FIATA’s ability to pave the way for the industry in the digital age, Steve Walker, welcomes the new direction that FIATA is taking. He calls for more direct involvement of freight forwarders within the organization, which should become a focal point for industry professionals, harmonizing existing digital solutions to harness the power of data.
I welcome FIATA’s new direction and their digital initiative. However, the next steps are the most critical. It is about bringing together a forwarding industry that has a complicated DNA.
For decades, the traditional 3PL's (third-party logistics) isolated independence has been its unique selling proposition; however, there is a need to reevaluate that with digitization being the perceived driver. We need to form new alliances and collaborate with traditional and online forwarders, in what I refer to as ‘horizontal collaboration’.
FIATA should enable the top forwarders to come together to try and establish protocols and determine our global position in the market for the coming decade.
Maybe we need to share initiatives. Could we imagine Kuehne+Nagel accepting, or the rest of forwarding agreeing, to use their blockchain? Yet, other verticals are collaborating.
FIATA needs direct forwarder contact with less emphasis on country associations, which I believe strangles decision making. I think forwarders should join FIATA directly, but they might have difficulty to understand why they have to pay for this direct membership, without knowing what value the new FIATA could bring them.
If we as a sector are coming together, so too should the associations by considering creating a super data association with the obvious ones and the not so obvious. For example, the WCA is the only commercial group within this sector. That is horizontal collaboration.
So, it isn’t about changing to more dynamic leadership or the move from Zurich for Geneva, it is about innovative ideas. If forwarders all replicate data mining, think what kind of knowledge we could get if the freight associations all replicate it. We need radical ideas from an association symposium.
I can explain this best by offering an example that still drives me today. We have always held more data than the shippers realized and have done little with it, a track and trace offering with data holes. In 2009, I could no longer offer this, so we set out on a new dashboard vision.
During one trip to Asia, our overseas agent suggested that rather than us continuing with the torturous configuration, he would make a special provision for us to use his purchase order monitoring software. My response was a question that went unanswered: whom will then own my freight paying customers, you or me?
The power of data ownership comes down to business control. You can ship as much cargo as your customer wants, but with data held say on a ’steamship line blockchain offering’, could you re-route freight away from that data offering? Very, very unlikely. Business control is lost.
In 1972, when I started in forwarding there were freight conferences/freight cartels where lines carved up the market on trade routes and rates. In 2008, this was banned under the antitrust legislation.
I started taking an interest in July last year by challenging whilst we were no longer seeing freight conferences, we were in fact seeing floating data conferences - where the lines were getting together - controlling data and fees with blockchain offerings, and in the case here, one possible carrier potentially holding over 65% of world trade data.
Later in December, I discovered that the Federal Maritime Commission (FMC) accepted a data agreement, put out after a 45-day consultation which passed without any objections on 6 February 2020. I didn't realize that the FMC was dealing with data/software and data storage organizations.
It is unfortunate for freight forwarders that FIATA did not act on this sooner, but there is one upside here, there is an acceptance of competing companies meeting. Providing there is no complicity or collusion on rates and services, those companies can have discussions on collective software offer.
FIATA needs to become the forum for freight forwarders, with lawyers present to ensure that there is no collusion or complicity, so members feel free to discuss defining matters. FIATA needs to become a data representative organization. Many freight forwarders in the world are presently scraping data from the web, so why couldn't our lead organization do that and have a commercial benefit?
This will be reflected by the relevance of FIATA in the years to come. It is that critical and time sensitive!
Build its own digital solutions, absolutely not. Even by the time you finished typing this question, you have been overtaken by far more focused offerings. Nor even controlling solutions.
Instead be the focal point for the industry, a think tank, a media go-to-representative, where appropriate, a lead signatory on behalf of its members.
I would like to see a radical change with two divisions within FIATA. It keeps its traditional legislative/training focus and the knowledge base committees representing the worldwide associations, although that needs a revamp. We need more than international committee individuals volunteering their time. Everyone in the presidency should be delivering visions to members and the media.
The big change is that FIATA should create a new division to represent forwarders in the changing data offerings and should be the focal point for the streaming of data, allowing new revenues covering related costs.
FIATA needs to expand this vision by offering an online meeting to key freight forwarders, to find the common areas that need addressing. I think forwarders should join FIATA directly. As the industry wants stronger leadership, they should be ready to make a greater financial membership contribution, in exchange to the additional services that FIATA could offer, like standardized data feeds from which they and their Transport Management Systems could expand offerings.
Can FIATA not lead with green innovation? I gave a talk to young forwarders in the UK who were in disbelief that four-way pallets had been round for 80 years and we hadn't had the ability to think of a more modern way of moving goods in and out of containers.
Greenpeace, for example, talks about the three Rs: reduce, reuse and recycle. How could we apply this to our industry? For instance, we say that the pallets that come in our containers are being recycled, but let’s be honest, they don't have a very long shelf life. They slowly downgrade until they become something like wooden pellets for burning. We could find a better way to deal with this.
I'd like FIATA to take my proposal, we should go back with a positive message from our industry. After all, we are only delivering what the world has ordered in our ‘take, make, consume and dispose’ society, but the public wants a green planet, so we should come up with strong ideas to be debated instead of being silent.
FIATA has the most difficult role, to make itself significant in the forwarders day-to-day thinking, to make the organization’s work seem relevant for the younger generations of forwarders and to lead the sharing of industry expertise on social media.