Information Technology: The key to survival in the logistics sector

 
There has been a dramatic change in the carrying out of imports and exports world over. Rapid advancements in transportation, automation and communication, regulatory changes and the information technology have added a new dimension to the international trade community.

The traditional players face a constant threat from the large 3PL/4PL competitors Tonegate these threats the traditional players need to be flexible, operationally integrated, and able to deliver value to customers, partners and alliances. They need to look at new ways to expand the markets in which they compete, to attract and retain customers by customizing products and services, and to restructure their business strategy to obtain competitive advantage.

Finding a Niche
Several customs brokers and freight forwarders have adapted by restructuring their organizations according to the requirements of the current economic scenario. Specializing in certain services modes, geographic locations, or other areas of expertise has become the norm. Though it has its advantages, like customer loyalty etc., it has had a very limited impact on their businesses.

There are players in the market who have an advantage with economies of scale, which allow them to drive prices down, but they are often criticized for their lack of personal attention and customer service. In such a scenario customs brokers and freight
forwarders have to work harder than ever to retain customers, and have to constantly outperform their competitors to please the customer.

With the rapid growth of technologies, there is a significant change in the working of the economy. The way to maintain their competitive advantage has become the most important issue for enterprises in the rapidly changing and uncertain business environments. Many studies have pointed at adoption of technology as the most important tool for enterprises to keep their competitive advantage. The survival of an enterprise in the age of knowledge-based economy depends on how to improve their technological capabilities.

Information technology: Investment or Expense?
Perhaps one of the biggest threats to the livelihood of customs brokers and freight forwarders has been the reluctance in investing on information technology. It's understandable given the traditional view of looking at information technology as an expense rather than investment. This has greatly affected the ability of the service providers to meet the greater demands of clients.

Growing number of firms are under pressure from their partners to change their traditional management style, both operationally and organizationally, replacing them with integrated systems that help increase the speed and fluidity of physical and information flows.

In order to reach this kind of integration they need to invest on new Information and Communication Technologies Although initial costs are slightly on the higher side the benefits are manifold and can help them not only to survive but thrive in this information age. Information technology can also help customs brokers and freight forwarders save money and remain competitive. This can
only be achieved if they wake up to opportunities that would result from implementing software solutions.

Benefits of Information technology
Today all activities associated with international trade such as transportation, customs clearance, document filing, and transactions have come under the ambit of information technology. Yet, many service providers are still not fully aware of the potential and actual benefits that can accrue from information technology.

The major benefits of information and communication technology are:
· Greater Visibility to users as well as client
· Integration and fluid dissemination of information
· High level of extensibility and scalability
· Operational controls
· Security and monitoring

The advancement in information technology have made possible for software to be a complete business tool. Adding value to the service provider, dissemination of information is another key benefit of the internet. No longer is the service provider handicapped by geographical locations. The technology allows him to operate from anywhere and at the same time maintain high visibility. There can be a greater integration of information between the service provider and allied agencies.

Conclusion
Despite the undergoing transformation in the international trade community, many traditional customs brokers and freight forwarders are successfully adjusting their business strategies. However the biggest challenge faced by firms is to hold on to their competitive advantage, they are still prone to falter if they fail to adopt and implement information technology. Given the rapidly changing economic scenario nowadays, it is certain that adoption of information technology is the only way to face new challenges in the future.

Mr. Amit Maheshwari is CEO and Co-Founder of Softlink Logistic Systems Pvt. Ltd., India’s leading software products company. Mr. Maheshwari has over two decades of cumulative logistics industry knowledge, experience and technological expertise. He can be contacted at amit@softlinkglobal.com.

View Amit Maheshwari Profile