Digital Transformation in Logistics: Opportunity or Downfall for SMEs?

Robert Sieg

Student thesis: Master thesis

Abstract

The B2B logistics industry is the last of the brick-and-mortar industries to digitalise, and
particularly the freight forwarding market stands on the brink to an extensive change of its
competitive landscape. Start-ups and incumbents alike compete for supremacy of online
forwarding. The majority of the trillion-dollar logistics market, however, is represented by
small- and medium-sized freight forwarders (SMF). With little value in assets, a limited
geographical scope, and a smaller range of value-added services the SMF is a specialised
business with strong personal relationship to his clientele. When IT standards are fulfilled, the
SMF can outcompete larger competitors through personal touch. In the future, however, the
customer expects flexible and individualised supply chains, high visibility of shipments, and
instant booking. Logistics is an industry in flux, and SMFs will have to find ways to reinvent
themselves and deliver value to the customer in new ways.
This thesis offers an approach to process innovation in the freight forwarding context in which
digital transformation of logistics is not a threat to the legacy of the ‘people’s business’. The
SMF uses his proximity and regional presence and embarks on a journey together with the
shipper to grow a digital customer relationship. The sales and booking process should be
digitalised first to ensure future collaboration. By means of ‘lean’ start-up methodology and
an ‘agile’ working approach, the SMF continuously tests hypotheses with the shipper to cocreate new value-added services, and drives collaboration with tech-driven partners and
educational institutions. Consequently, the SMF leverages his social capital to proactively
engage his customer in the digital transformation process and establishes the mantra of a
learning organisation.

EducationsMSc in Business, Language and Culture - Business and Development Studies, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2017
Number of pages89
SupervisorsSudhanshu Rai