Inbound Logistics | June 2023

TAKEAWAYS

STATE OF DIGITIZATION IN FORWARDING The pace of digitization in freight forwarding has accelerated since 2020, as companies increasingly invest in technology solutions to streamline operations, finds a Magaya report. However, the industry still has a long way to go to capitalize on evolving technological advancements. Many organizations still rely heavily on ine«cient manual processes. The survey’s key findings include: • Automation and digitization: 24% of respondents still use completely manual processes. • Cloud: 49% are all-in on the cloud. The other half still host selected functions locally, putting them at risk. • Priorities: The top three business concerns are customer retention, gaining new customers, and lowering costs/overhead. The top three IT investment priorities are tracking and visibility, general freight forwarding, and a tie between digital forwarding, rate management, and compliance. 62% of respondents are looking to expand into new service o¥erings in the next 12 months. New territory coverage, warehousing, and last-mile delivery are the top priorities for expansion. • Software market: Respondents want to see more use of AI in forwarding; 44% say that the market does not currently provide adequate capabilities in this area. • Digital forwarding: 73% of respondents currently have a digital customer portal, but the features vary. Lack of budget and not wanting to change back-end systems are the biggest obstacles for companies without an online customer portal. • RFQ e‹ciency: The average time to respond to an RFQ is 217 minutes, and the median is 30. The spread ranges from one minute to two full days.

Shippers Gain Condence What can shippers expect next quarter? BlueGrace Logistics’ Q3 Logistics Condence Index nds these key highlights: • Anticipated revenue maintained a positive trend, decreasing by only 4% across all shippers surveyed. • Inventory levels measured highest at neutral and therefore are not expected to expand or contract for Q3. • Order volume (sentiment) increased by 5%. That suggests order volumes must be increased to maintain the same levels of projected revenue. • Consensus data underscores the shift from modest growth in the previous quarter to relatively stagnant or neutral growth in the current quarter.

EXPECTED REVENUE GROWTH FOR THE NEXT QUARTER Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 VAR

%VAR -6.2%

Positive Neutral Negative

70% 20%

83%

59% 24% 17%

66% 13% 21%

62% 12% 27%

-4%

5%

-1.2% -9.3% 5.2% 24.4%

11% 5%

12%

Median

5%

2%

3%

1.8% -1.3% -41.7%

June 2023 • Inbound Logistics 19

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