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Disintermediation Threat Looming

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The rise of Uber Freight and many others like it through the supply chain and logistics ecosystem should frighten logistics companies as the comparison with a travel agency is strikingly real. Disintermediation, defined as suppliers dealing directly with customers and eliminating the needless cost and interaction of an intermediary, happened in the travel agency as the number of sales went 80% online within seven years of its commercial and technological enablement (Dodu, 2008). Whether it is expedia.com or Uber Freight, there is a lesson to be learned. Freight forwarders must move up the value stream. Beneficial cargo owners (BCOs), otherwise known as the direct customers of logistics and freight forwarding companies, typically have limited knowledge on evaluating different carrier options and even less experience dealing with all the formalities involved in booking directly (Gasparik et al. 2017); therefore the value that a freight forwarder provides is in the knowledge that they have in terms of carrier and customs (Burkovskis 2008). The ultimate value that they offer is in being a single source of information and a centralized window to provide their clients with the services and relevant information needed to move a shipment (Gasparik et al. 2017).

The challenge remains on how to move that centralized point away from phone calls and emails to a more efficient medium that offers system connectivity and instant access. The first step in the digitalization journey for logistics companies is not abundantly clear as often they are heavily reliant on outside stakeholders, including customers, governments, and vendors. With $1.5 trillion of value at play in the logistics industry, there is an influx of new players, and incumbents are scrambling to figure out their strategy (Gould 2018).

The Digital Transformation of Logistics

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