How fast is the logistics sector digitising?

The global logistics and shipping industry has been facing economic challenges due to various disruptions such as supply chain issues, the pandemic, and the war in Ukraine. To address these inefficiencies, experts suggest that the industry should prioritize digitization. Zvi Schreiber, the CEO of Freightos, discussed the importance of digitizing the industry with CNBC Africa, shedding light on the significant transformations taking place within the sector. The international freight and shipping industry play a crucial role in the global economy, with a vast majority of products being imported across the world. From everyday items like clothing and electronics to essential goods, international shipping is the lifeline that keeps businesses running and consumers supplied. Despite the industry's importance, it has lagged behind in digitization compared to other sectors like passenger travel. However, recent years have seen a substantial shift towards digitalization, with the industry realizing the urgent need to modernize its operations. The outbreak of the pandemic served as a wake-up call for the industry, accelerating the adoption of digital platforms to enhance flexibility and resilience in the face of disruptions. The unpredictability caused by the pandemic, including fluctuating demand, grounded aircraft, and shifting supply chains, highlighted the importance of having digital tools to navigate such challenges effectively. With digital platforms in place, the industry can respond swiftly to changes, whether due to weather conditions, pandemics, or other unforeseen events, ultimately improving operations and mitigating risks. The surge in shipping prices during the pandemic played a significant role in driving inflation levels up, impacting global supply chains and consumer prices. The Federal Sporting Index of container shipping prices showcased a drastic increase of over 10 times during the peak of the pandemic, influencing the costs of goods worldwide. However, as shipping prices gradually stabilized and even decreased post-pandemic, it contributed to a slight moderation in inflation rates. The interplay between shipping costs and inflation underscores the interconnectedness of the logistics sector with broader economic trends. China, a key player in global trade, weathered the storm of the pandemic by maintaining its production capacity, despite challenges in passenger travel. The gradual lifting of Covid zero policies in China has signaled a positive shift for the industry, allowing for smoother trade operations and supply chain movements. While disruptions persisted during the pandemic, digital platforms like Freightos enabled importers to adapt quickly to changes, ensuring continuity in logistics and minimizing disruptions. The digitization of the logistics sector holds immense potential for improving efficiencies, reducing costs, and enhancing overall business operations. Drawing parallels with the passenger travel industry, the digitization of air travel led to greater affordability and increased efficiency through dynamic pricing and streamlined processes. Likewise, digitization in international shipping is poised to bring about similar benefits, such as enhanced transparency, improved vessel utilization, and overall industry optimization. Companies within the shipping sector are increasingly investing in digitalization efforts, recognizing the transformative impact of technology on their operations. The shift towards digital tools in air cargo has been particularly pronounced, with over 50 percent of airlines globally accepting digital bookings through platforms like web cargo by Freightos. While the adoption of digital tools in ocean freight may be progressing at a slightly slower pace, there is a clear momentum towards embracing digital solutions to drive efficiency and competitiveness within the industry. Looking ahead to 2023, Freightos has begun the year on a high note by going public on Nasdaq, a testament to its growth trajectory and market resilience. Despite the milestone of going public, the focus remains on sustained growth and expansion. With a proven track record of enabling digital bookings for air and ocean freight, Freightos is poised for significant growth, aiming to exceed a 100 percent increase in the upcoming year. In conclusion, the digitization of the logistics sector is paving the way for a more agile, efficient, and resilient industry. By leveraging digital platforms and embracing technological advancements, the industry is poised to overcome challenges, adapt to evolving market dynamics, and drive greater value for businesses and consumers alike.