Navigating Evolving Transport Needs

This 2023 FIATA World Congress panel, addressing the 'new normal' and continually evolving transport needs, started with a poll, asking the question 'Did you pay extra to offset your carbon emissions when booking your trip to Brussels?'. The overwhelming majority (85%) said no. The point was made that many of us are not yet in the 'mindset' to move into a sustainable way of working or living, and the goal of this panel was to explore how not only sustainability, but also digitalisation and collaboration are key patterns for development in the freight forwarding sector today and moving forward.

Panelists included Joost Sitskoorn, Director of Evofenedex, who works with the Global Shippers Alliance and European Shippers Council, Brandon Fried, Executive Director of the Airforwarders Association, a leading US air freight expert who works with Cargo Network Services, Philip Van den Bosch, Deputy Director of Freight at UIC (International Union of Railways), who has 25 years experience in supply chain management in managerial and operations matters, Jens Roemer, FIATA Working Group Sea Chair and Senior Vice President, who has held senior management roles in freight forwarding companies and logistics associations in Belgium and Singapore, and Johan Leunen, Senior Business and Network Development Manager at Brussels Airport Company, who has 13 years of experience at Brussels Airport, working in cargo and marketing management, and has a leading role in attracting new air cargo lines.

Mr Joost Sitskoorn was first asked to comment on the evolution of the sector in recent years, responding that shippers have experienced a very fast changing landscape starting with Brexit, the COVID-19 pandemic, various wars and geopolitical unrest. He noted that in the past, the supply chain was disrupted over and over again, and that leading companies were usually accustomed to dealing with problems "clenching their teeth together", but that "this won't be the case anymore". He shared that from his perspective, looking for solutions to these disruptions is not possible, but that working together and being agile and resilient will be the main solution to dealing with these crises. He noted that there must be trust for eachother, and transparency, and that data is important and will help to transition to a stronger and more resilient supply chain.

Mr Jens Roemer then spoke about what he is seeing from a freight forwarder's persepective in the maritime sector. He shared that during the pandemic, freight forwarders provided value-added service during serious disruptions, and that the industry has come to the rescue of the global supply chain, but that recently, there have been signs of weakness. "On the supply side there has been a massive overcapacity invested in shipping space, and this development has led to a drop in freight rates less than before pandemic". He continued "Sea freight has become a commodity, and customers are changing suppliers for a few cents". He closed, emphasising that "Our industry however can respond to these challenges and find opportunities. Freight forwarders are the architects of the logistics supply chain, contacting their customers to help them access new markets." On sustainability, and digitalisation, which he said for him come hand-in-hand, he highlighted that most freight forwarders are non-asset based, and that this is therefore a difficult transition, because they will need to report with data, and that this will be key in keeping up with regulatory changes.

Mr Philip Van Den Bosch spoke on behalf of rail transport, saying that thankfully rail is already on top in terms of energy efficiency and decarbonisation, with "steel on steel being six times more energy efficient than any other type of transport" despite having had many challenges in the last years. However, that even during the pandemic, it was still proven as agile and resilient, and "never had better in-time rates than even before the pandemic, because there was willingness of all parties to work together". He noted that through real collaboration, all modes of transport will work together to improve efficiency.

Mr Brandon Fried shared on the air freight side as to how the current landscape is. He spoke about how agile and flexible the sector was, stepping up to the plate during the pandemic, with the volume of cargo in and out of Europe and Asia to and from the US in passenger airplanes being an "amazing" achievement in what was a precarious situation for the sector. He shared that with ocean carriers now being in the business too, with Maersk growing to 25 aircraft, as well as MSC, and CMA CGM Group, forwarders have been somewhat taken aback. With the increase in technology and Artificial Intelligence, he said that air freight forwarders are going green, and applauds IATA for their net-zero by 2050 goal. In his view, forwarders have been on the front line of reducing emssions, making sure that they are adopting measuring services, also for their customers' sake, venturing into eCommerce, merging with companies who provide last mile, door to door, and cargo insurance on a broader scale than before. In closing, he mentioned the importance of cybersecurity, and it being the "modern day train robbery, which is hitting the industry tenfold".

Mr Johan Leunen shared from the airport side, and was asked how he sees the changes taking place that were mentioned by Mr Fried. He shared that he doesn't feel like there is much change, and that he also doesn't think the situation will necessarily change much in the future. From his perspective, the change will be forced from outside of our industry, from stakeholders who will force change and push forwarders and the logistics sector to be more innovative and efficient. He emphasised that cooperation is the only way to survive, and that "sustainability should be no-brainer, because we do this for our children."

Ms Andrea Tang, moderator and FIATA International Trade Lawyer, asked the panel "Based on the current way business is being done, do you see it as being sufficient to have collaboration, or does something more still need to be done to transmit this information to the customer?"

Mr Sitskoorn shared that he thinks that people are in the right mindset to change, and that there is a will. He suggested that "competition mode is switched on to survive, and consolidation in maritime transport is happening for this reason, and in airfreight too." He said that "Everyone needs to work together, but that multinationals work instead on their own additional modes of transport". He pointed out that "a lot of additional administration work will be coming to freight forwarders if all stakeholders have to provide data to ensure that an incoming tanker is compliant, and this can only be done when we work together. "

Mr Fried commented that he felt there is too much regulation, too many requirements, and all different by country. "In order for deliveries to be made on time, countries need to harmonise better, and need to get sharper on that for risk analysis, and for trade purposes - our clients want transparency and their goods to arrive on time. There's a reason why freight forwarders manage goods".

Mr Van Den Bosch responded that he was not sure that regulation was the issue, but that it should be aligned and interoperable. He closed, sharing that the transport sector will grow over the next 20-30 years, with projections saying by 20-30% by 2030.

Poll

What is your top priority to keep your business ready to meet new supply chain evolutions?

Brandon Fried closed, summarising from the poll that we need to remember that freight forwarding is a people business, and that nothing is going to replace the person, dealing face to face with a customer, and that AI won't drive us alone.