Focusing on Product Development
As competitive conditions have changed, Nordic exporters have sought new markets beyond the traditional territory of Europe. This has boosted demand for advanced transport arrangements, in many cases using combinations of transport modes. The role of the freight forwarder as an organiser of international transport services has grown in importance.
The Nordic freight-forwarding businesses are focusing resources more and more on product development — for example, improving services, identifying new transport routes and producing new combinations of transport modes of improved efficiency.
Logistical planning
The onward march of globalisation — and, in particular, the Nordic countries´ recent entry into the European Union — is bringing increased pressure for the development of efficient systems of transport and communication.
Nordic freight forwarders started building computerised information-processing systems in the 1970s. This paved the way for changes and new opportunities in the business of freight forwarding, in terms of both individual tasks and the services offered by companies.
At the same time, manufacturing industry developed systems for logistical planning and, to an increasing extent, began implementing efficiency improvements in the area of transport. One important aspect of efforts in this field was to reduce capital tied up in stocks of materials and and to speed up throughput times in production. The adoption of order-led production systems cut the need for stocks of finished products to a minimum.
This new production philosophy requires more frequent, but smaller, shipments of materials “just in time”. Freight forwarders are responding to this demand by developing new, more fine-tuned systems for transport and information processing throughout the supply chain.
Another area in which information technology and automatic datacommunication systems have created new opportunities is short- and long-term warehousing.
Many Nordic forwarders find this an important and profitable business, which in many cases is required as an all-inclusive operation comprising import, customs clearance (if needed), storage, order assembly, stock administration and regional distribution to retailers.
The freight forwarder's new role
Nordic freight forwarders are to an increasing extent assuming carrier's liability for their transport undertakings. This is, in fact, the biggest change in the role of the freight forwarder to emerge during the past few decades.
In the past, the forwarder functioned mainly as a transport intermediary in and around ports, where most transport-related activities took place. Now, the freight forwarder has developed into a provider of a full range of knowledge-based transport services.
By assuming responsibility for a consignment, whether the goods are carried by his own means or not, the forwarder has opened up an entirely new area of potential for building up transport services and systems. This, in turn, laid the foundation for a vigorous structural rationalisation of the freight-forwarding business in the Nordic countries over the past years.
A small number of large companies posessing extensive resources of knowledge, personnel, development and services have emerged. These companies operate national, international and intercontinental services via subsidiaries and offices in strategic locations all over the world. They have invested heavily in the development of their own international information systems.
At the same time mergers and programmes of business rationalisation have led to company spin-offs and the creation of new, small-scale businesses. These are not only highly specialised but also to a substantial degree are to be found in different market niches. Thus, the total number of forwarding companies in the Nordic countries has remained more or less constant.
Changes by computerisation
The most important trend of the 1990s is the creation of computer-based information systems connecting freight forwarders, with their customers as well as with other partners in international trade. Using modern information technology, freight forwarders will further develop both large- and small-scale logistical services.
Computer technology provides the tools for efficient management of goods as well as the means of transport. Bar-code labelling of goods allows full control of individual packages at any stage in the flow of goods throughout the world. GPS technology allows precise tracking of individual rail cars or road vechicles.
With the removal of barriers at borders in the European Union, customs inspection has moved to the place of dispatch and customs information is supplied electronically. Containers, vehicles and terminals can be utilised more efficiently and the collection of data for statistical purposes or for internal quality monitoring is a simple matter.
Information technology is not only leading to increased efficiency on the part of the Nordic freight forwarder, but will also facilitate the development of reliable, customer-focused and environmentally friendly logistical and transport services.