Amazon-funded start-up calls freight forwarding ‘ripe for disruption’, irking association chief
03 June 2020
Posted by: William Barns-Graham
A London-based digital freight forwarder, a firm that recently received investment from Amazon founder Jeff Bezos, has caused a stir with claims the industry is slow, inefficient and “ripe for disruption”.
The claims have drawn scepticism from freight forwarder association BIFA, which has described the claims as “a load of rubbish”.
Beacon was founded in 2018 by one-time Uber director Fraser Robinson with funds from two former Uber executives to target what it called “the trillion-dollar freight forwarding sector”.
It will provide logistics planning and trade finance, allowing suppliers to get paid up front, taking a fee for financing firms’ working capital.
In a press statement dated 1 June, Beacon said:
“Many logistics incumbents have been slow to digitise and, with fewer than 30% of shippers being satisfied with the customer service they receive, the industry is ripe for disruption.”
This has attracted the ire of Robert Keen, the director general of BIFA, who accused software providers like Beacon of “preaching”.
“We keep hearing the usual spin from digital start-ups on how their presence in the sector will lead to the death of traditional forwarders,” he said in a statement.
“It’s a load of rubbish. We have strong empirical evidence showing what [our members] are up to regarding digital transformation of their role in the supply chain.”
Keen argues freight forwarders have withstood and adapted to various technological challenges and revolutions over the years and made similar arguments following comments about the industry in 2018.
He does, however, admit greater digitalisation is coming and argues BIFA members will be at the forefront of these changes.
“We do foresee a different outlook in the years to come, and there will be changes,” said Keen. “But I’m certain there will still be a BIFA, with a healthy membership of freight forwarding companies, in 10 years’ time.”
Beacon is a member of the BIFA.
The link-up between Amazon and Beacon does provide “benefits” for ecommerce vendors and sellers, says Ashley Cooke, an Amazon specialist for Clickthrough Marketing.
He told the Daily Update (3 June) that Beacon aims to “improve operational efficiency for customers organising international trade in their products using the cloud and artificial intelligence”.
“As a result, the process of exporting goods to Amazon fulfilment warehouses should be more efficient, and sellers will get real-time data on the location of their stock,” he said.
He said the technology could be a “game changer” as it will give sellers “peace of mind”.