STARTUPS have been slow to plunge into less-than-containerload (LCL) market, leaving innovation to forwarders and co-loaders, reports IHS Media.
Speaking at JOC Uncharted, forwarding consultant Philip Blumenthal said that because LCL is a niche market, it has discouraged independent startups from attacking core problems in the sector.
Mr Blumenthal, a veteran of DB Schnenker, Dachser and Freightos, said startups tend to focus on the larger - and relatively more straightforward - full containerload (FCL) market.
The issue of technological advances in the LCL market has become more acute in 2020 as more shippers gravitated towards it owing to shrinking air freight capacity and the costliness of express services.
Shippers want simple rates, transparency, and cargo traceability, and 'that's very complex in LCL for new entrants,' Mr Blumenthal said.
'Unlike the disruption in the FCL market or the US domestic market or e-commerce, innovation in the LCL market comes from within,' he said.
Some incumbents in the LCL market, such as ECU Worldwide and DHL Global Forwarding have developed digital pricing and visibility tools, but track-and-trace and instant quoting have now become standard in LCL.
'Basically, you simply need to have it, otherwise you won't be able to offer anything in the market,' he said.
LCL providers need simplification in pricing, he said. 'When I receive an LCL quote it often looks like a dinner menu. There's the rate and lots of components and lots of items where I don't really know what it means. I don't know what it costs me in the end.'
Whether that kind of technological innovation comes from existing LCL providers or from outside software companies, Mr Blumenthal said there are four areas on which all needed to concentrate.
'Is it easy to use?' he said. 'Does it give me the information and service I need? Is it a cost that basically drives value for me? And lastly, can I trust them?'
Even as shippers have begun turning to LCL more in 2020, Mr Blumenthal said it is still underutilised for shipments that tend to move primarily by air freight or FCL.
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Speaking at JOC Uncharted, forwarding consultant Philip Blumenthal said that because LCL is a niche market, it has discouraged independent startups from attacking core problems in the sector.
Mr Blumenthal, a veteran of DB Schnenker, Dachser and Freightos, said startups tend to focus on the larger - and relatively more straightforward - full containerload (FCL) market.
The issue of technological advances in the LCL market has become more acute in 2020 as more shippers gravitated towards it owing to shrinking air freight capacity and the costliness of express services.
Shippers want simple rates, transparency, and cargo traceability, and 'that's very complex in LCL for new entrants,' Mr Blumenthal said.
'Unlike the disruption in the FCL market or the US domestic market or e-commerce, innovation in the LCL market comes from within,' he said.
Some incumbents in the LCL market, such as ECU Worldwide and DHL Global Forwarding have developed digital pricing and visibility tools, but track-and-trace and instant quoting have now become standard in LCL.
'Basically, you simply need to have it, otherwise you won't be able to offer anything in the market,' he said.
LCL providers need simplification in pricing, he said. 'When I receive an LCL quote it often looks like a dinner menu. There's the rate and lots of components and lots of items where I don't really know what it means. I don't know what it costs me in the end.'
Whether that kind of technological innovation comes from existing LCL providers or from outside software companies, Mr Blumenthal said there are four areas on which all needed to concentrate.
'Is it easy to use?' he said. 'Does it give me the information and service I need? Is it a cost that basically drives value for me? And lastly, can I trust them?'
Even as shippers have begun turning to LCL more in 2020, Mr Blumenthal said it is still underutilised for shipments that tend to move primarily by air freight or FCL.
SeaNews Turkey