Forwarding is people's business: William Sim, Toll Global Forwarding
Toll Global Forwarding, part of Toll Group, provides a suite of international freight forwarding and advanced supply chain management services. Headquartered in Singapore, Toll has a worldwide network of owned and affiliate operations across more than 150 countries throughout Asia, Europe, North America, Africa, Australia, New Zealand and the Middle East.
In an exclusive interview to The STAT Trade Times, William Sim, global head of airfreight and senior vice president North Asia, Toll Global Forwarding talks about the future of freight forwarding, the impact of digital technology and encounters the question whether tech will replace the business of forwarding.
How is Toll Global Forwarding positioned in the air cargo market in relation to other stakeholders? How has your airfreight forwarding business been evolving through these years?
Toll Global Forwarding is a medium-sized airfreight forwarder focused on a set of strategic trade lanes. An Asia-centric forwarder with Australian heritage, our strengths are on inbound and outbound lanes in Asia and Australian and New Zealand.
The Covid-19 pandemic has significantly impacted global trade. However, we are well-placed to provide our services to support the movement of medical personal protective equipment (PPE) that is critical to Covid-19 prevention and recovery efforts. The medical PPE demand has provided an opportunity for Toll Global Forwarding to scale up our airfreight operations over the same period last year. Just in May, we managed close to 100 chartered flights to deliver for our customers.
How would emerging technologies change your role in the airfreight forwarding business?
In comparison to all other shipping modes, airfreight accounts for only 10 percent of global moves. The airfreight market is a dynamic one that is quickly influenced by movements in the supply and demand for space. It is challenging for many players to keep up with and manage the market’s volatility.
For many shippers and forwarders, the market volatility was painfully evident over the past few months when many international flights were cancelled, resulting in scarce capacity and skyrocketing rates.
The introduction and evolution of digital solutions allow standardised processes to be automated and optimised as human input errors are removed from the process. This means freight forwarders can look forward to productivity boosts that, in turn, lead to lower cost to serve and the ability to maintain a sustainable airfreight business.
Do you think the role of freight forwarding will be dissolved eventually from the business of air cargo?
In recent years, there has been quite some discussion on the viability of the freight forwarder’s role. To some, it is perceived that digitisation could well be the demise of what may seem to be the middleman role.
Fundamentally, freight forwarding is a people business, and we don’t believe that the human factor can be replaced easily.
Technology is a tool; and an aid too, but not the whole solution. Technology supports the automation of standardised processes; the general operational aspects of airfreight.
The evolution of technology still requires human input of experience and programming. It will help design solutions for known and foreseeable situations. However, in the face of an unfamiliar landscape such as the Covid-19 situation, where we are feeling the extent of the impact never experienced before, human input is still critical in solution design.
Technology is a tool; and an aid too, but not the whole solution.
Can you please give us a few examples for the argument that freight forwarders are an unavoidable part of air cargo business?
Airlines’ strengths lie in their connectivity between airports around the world and their ownership of aircraft and air freight space.
Currently, Toll estimates that more than 90 percent of the airlines’ freight customers are freight forwarders. Removing freight forwarders from the equation to deal directly with all shippers will compromise the airlines’ position of neutrality with their current customer base. This would call for a complete change in their business model.
That aside, shippers need to get their shipments beyond the airport to airport. Getting product from origin door to destination door involves various processes that vary in complexity depending on the locations involved.
Space-wise, shippers with huge volumes may be able to deal directly with the airlines, but the capabilities at origin and destination are what they would be missing. On the other hand, shippers with smaller volumes would be worse off. Airlines would not have the capacity to consolidate shipments the way freight forwarders could to service these smaller businesses.
As freight forwarders, we don’t own vessels or aircraft and so we are not tied to any mode of transport. Our business is in providing solutions to shippers that combine available modes and routings to get products to their destinations according to the shippers’ requirements – be it transit time or cost and regardless of market challenges.
This is the reason freight forwarders continue to exist – to connect the many dots between the shippers’ suppliers to their customers in the best way possible for the shipper. Freight forwarders can be their one point of contact to look into and manage their supply chains from end-to-end – a role that is very different from that of airlines'.