Freight Forwarder Sector Drives Change

Freight ForwarderThis year a significant report on the Irish freight forwarding market was issued and it made for fascinating reading. Called “Addressing” and produced by the Expert Group on Future Skills Needs (EGFSN) – a team of advisors to the Irish Government on skills needed for the economy – the report represents a significant piece of research and it’s full of interesting industry insights.

Over the coming months we’ll be reviewing some of its contents but in this article we’re looking at the influencing factors that it identifies as driving change for freight forwarder and logistics businesses like Cargocare.

Global Influencers Driving Change

IT and Technology for the Freight Forwarder

The demand for live information and timely data continues to increase in local and international markets and this trend is one the freight forwarders are adapting to. With multiple specialist software vendors and a growth in “smart” solutions, technology and IT skills will be central to providing effective logistics services into the future. The report suggests that companies will address this issue in one of two ways; either by handling it internally with skilled, cross functional teams and relevant technology or they will outsource logistics completely to specialist providers.

Energy Efficiency and Sustainability

Cargocare has covered this topic extensively in our blog and the report demonstrates that we are certainly on-trend in terms of keeping a close eye on sustainability initiatives, such as LaMiLo and our use of electric vehicles, which it identifies as a likely trend for freight forwarders. Pressure to embrace initiatives that reduce CO2 emissions is likely to grow for companies operating logistics solutions and the report mentions that air freight in particular is likely to come under pressure in terms of carbon impact. More reporting on carbon impact will probably become a requirement, in line with more EU laws to drive sustainability; see below.

The Regulatory Environment

The market is becoming increasingly regulated and there are many governance considerations at play now for logistics companies. EU directives control many aspects of the transport and delivery of goods such as the regulation of the manufacture and distribution of medicines in EU countries. With the opening of road transportation across Europe too, a plethora of regulations have been introduced – designed to standardise the market and equalise competition. These address areas such as driver competence and the number of hours drivers should work, controls over the transportation of dangerous goods and goods that need to be refrigerated, as well as cross-border agreements for logistics services between the EU and other territories e.g. to allow for temporary access on international freight transportation.

Drive Towards Centralising Logistics

Businesses are moving towards a centralised approach to managing logistics as it makes it easier to handle complexity and centres of excellence offer efficiencies also. This is likely to drive the sector towards more professional services such as legal, software and finance support options. Given the mature freight market in Ireland and our multi-modal distribution systems, Ireland is well positioned to compete in this regard.

Domestic Drivers of Change

Open Economy

Given our geographical location as an island on the edge of Europe, freight forwarder services and logistics are vital to the economic outlook for the economy – about 80% of goods manufactured here are exported and freight transport comprises a hugely significant element of the overall supply chain.

Irish Export-Driven Strategy

The Irish government’s strategy to drive exports into trading blocks such as BRICS and the Middle East will require strong logistics skills and experience and expertise in handling customs across these markets will become increasingly important to deliver on this growth strategy. Existing markets such as the UK will also continue to be important and growth in trade between existing markets is anticipated. Cargocare operates daily freight services between Ireland and the UK and we have excellent relationships in both markets.

Cost Cutting

Cost is a key driver and close communications between all parties in the industry will be important going forward, so that financial efficiencies can be optimised. Businesses will need to operate in a more “lean” manner. Cargocare has survived 30 years, through some extremely challenging economic times, by careful financial management and by working closely with our loyal customers to offer a high value service at competitive costs.

Consolidation

Larger organisations in the market have turned to consolidation as a way to cut costs although the report points out that SMEs still deliver key services in the market.

Career Perceptions for Freight Forwarding

The freight forwarder sector operates in a low-key way to a large extent and it is not promoted as a strong career option. As a result, it can be challenging for many operators to both attract and retain

talent. However in reality logistics companies offer a variety of professional, well paid jobs. Cargocare has a significant advantage in this respect, being a family business, as we have a pool of experienced, hands-on professionals within the family, all heavily involved in the business and with a stake in its future. The report makes an interesting observation when it points out that the industry probably needs to market itself better in terms of career options and prospects.

Cargocare – Professional, Proven Freight Forwarder Services

Cargocare has been in business for over 30 years and we are thoroughly familiar with many of the considerations outlined in this report. It was re-assuring to learn also that we are playing our part in moving the industry forward, as we are already embracing many of the drivers for change highlighted in the report; such as a commitment to regulatory compliance, moves towards sustainability with our vehicles, investment in training and expanding our services to include office equipment installation, for example. We’re on track to build the business for generations to come – literally – and we look forward to doing that in conjunction with our many customers across Ireland and the UK.  Call today and let’s discuss what our business can do for yours.