Wednesday, June 3, 2020

Freight Forwarding Association Boss Appeals Over Brexit Delay and Takes a Swipe at Digital Disruptor

Transition Period Needs Extending and We Have Heard Funeral Bells Oh So Many Times Before
Shipping News Feature

UK – The British International Freight Association (BIFA) is encouraging its members to personally appeal to government requesting an extension to the Brexit Transition Period, and simultaneously take a sideswipe clearly aimed at the arrogance of newly financed freight forwarding outfit Beacon, which this week announced it had a 'new way' of disrupting and improving an industry, a claim which has been heard before echoing down the years.

Firstly that Brexit plea, as the government digs in its heels on negotiation deadlines a survey of the trade association's membership showed that more than 72% of respondents said that there should be an extension to the Transition Period if a trade deal appears unlikely. Time is running out for this as, although this delay is possible if both signatories seek an extension of either one or two years, this has to be agreed by the 30th June.

Forwarders, whilst generally agreeing in the survey that they understand the Customs entry and Transit procedures, also have concerns about recruiting suitable staff to cope in time for what may prove considerable amounts of extra work, dependent on the result of the talks. 72.14% of the BIFA membership indicated that there should be such an extension, with 62.17% favouring a two-year extension to the Transition period.

The situation has of course been worsened considerably by the current pandemic and BIFA will be making these views known to government, and is encouraging its members to send individual e-mails to their local MP, and to write to the Chancellor of the Duchy of Lancaster, the Rt Hon. Michael Gove MP, 70 Whitehall, London SW1A 2AS setting out their views on the matter.

And so on to that Beacon claim that it is about to turn freight forwarding on in its head. Backed by such as Amazon boss Jeff Bezos any claim to disrupt the industry is bound to be taken seriously. However this type of approach has been oft heard before, with a variety of claims, including one made to our own editor over thirty years ago by the UK head of Danzas, at the time the largest independent forwarder in the world, that within five years there would be no small forwarders left in Europe, with a ‘Big Three’ carrying all traffic. You can guess how that worked out for them.

BIFA Director General, Robert Keen points out that this attitude actually goes back much further, saying that this latest prediction that the future of the traditional freight forwarder is now extremely precarious is merely another bout of public relations puff, as were all the predictions of digital start-ups we have heard of in the last five years spelling the final demise of freight forwarders.

Keen says it really irritates him when software providers preach about their systems sounding the death knell for the industry when there is clear evidence that forwarding companies are already introducing and developing systems comparable with those of digital disruptors, adding it makes him feel like Bill Murray in Groundhog Day and continuing:

“There’s this idea that if forwarders do not adapt, they will die, but you just need to look back at the sector’s history, it has always adapted. One forwarder I know, a family-owned European firm, has in their archive a letter from a great-grandparent proclaiming the company’s demise with the arrival of rail in the mid-1800s - it’s still going strong.

“We keep hearing the usual spin from digital start-ups on how their presence in the sector will lead to the death of traditional forwarders. It’s a load of rubbish. We have strong empirical evidence showing what our members are up to in regards to digital transformation of their role in the supply chain.

"BIFA members are already developing and delivering technology-led products and services that will meet their customers’ needs more effectively, enhance their experience and cut their costs. A company I visited recently is developing its own integrated solutions. They’re not only hiring forwarders, but software development staff, and our members large and small are making a fantastic effort to embed themselves in their customers’ entire supply chains.”

“We do foresee a different outlook in the years to come, and there will be changes. But I’m certain there will still be a BIFA, with a healthy membership of freight forwarding companies, in 10 years’ time.”

What is always clear when people come into the industry without any historic awareness of how the business not only works, but shapes itself to a constantly changing landscape of rules, tariffs, modes of transport and an infinite array of matters which each need an individual solution, is that most are experts in one or more fields, usually technology or finance. This however is no preparation for the day to day, hands on approach that international trade demands, and will continue to do so.

Photo: That new technology in action again! A locomotive collects a US mail bag automatically from trackside without stopping. Courtesy the Library of Congress.