Ports

Forwarders Must Fix Data and Processes Before AI Can Stem Margin Erosion

Freight forwarders cannot rely on artificial intelligence to protect profitability without first addressing fundamental operational deficiencies, according to Metro Shipping and Portcast.

Unbilled charges, manual rework, and unreliable data represent the primary margin leaks plaguing the sector, said Ian Powell, tech and solutions director at Metro. Incorrect buy and sell rates, unrecovered costs, and repeated administrative tasks drain operator margins.

Detention and demurrage charges pose particular challenges due to varying free-time allowances and contractual terms, said Emma Crumpton, enterprise solutions director at Portcast. Forwarders often absorb costs to maintain customer relationships.

Automation can help identify approaching deadlines and ensure accurate billing, but only with reliable data and clear process understanding. Metro conducted a three-month pilot integrating airfreight tracking systems before deployment.

Forwarders should address root causes through process improvements rather than pursuing technology for its own sake.