NSRN: You mentioned something interesting about digitalization even before Covid. Amongst all the buzzwords in logistics, digitalization has been a constant component for the last decade. However, the freight forwarding industry is unfortunately not yet known for its high level of modernization. Logfret describes itself as “The New Digital Freight Forwarder” and has in fact developed its own only platform called NEOLink. Can you give us a quick overview of the capabilities of the platform? What prompted Logfret to invest heavily into such a product, instead of using something off the shelf?
Alain: NEOLink is a centralized platform that allows for supply chain visibility. The big advantage of NEOLink is that it has been developed especially for Logfret and our clients. To give you a brief summary, it improves and optimises customers’ business productivity and profitability. NEOLink streamlines processes and allows you to discard legacy systems, excel spreadsheets, manual data entries and multiple printed documents. With NEOLink, customers have one centralized platform with end-to-end supply chain visibility – giving them valuable insight for real-time decision making. It provides state-of-the-art IOT solutions such as the control tower and NEOLink Live; Inventory Management; Purchase Order Management; Fulfilment solutions such as E-Commerce, Drop Shipping and Reverse Logistics, etc.
This might not seem new in the market but the advantage with NEOLink is that it is not a platform developed outside and used as a “plug-in”. We don’t impose a pre-set platform on them, rather we develop it for each of our clients and their individual needs. Because of this, it is highly adaptable and fully complete with all the tools they need. From industrial clients to E-Commerce companies, all of them can leverage the NEOLink system.
NSRN: Such a platform was not built in one day, and we know from previous conversations that NEOLink itself employs a dedicated team. How does Marc gain such foresights to lead the company?
Anna: Since we are a family-owned company, Marc has always remained close to the market. Over years he has been keeping close contact with our clients and hearing them pinpoint problems and challenges that they face. This helped him see the need and relevance to start a venture like NEOLink. The idea of creating and developing our own system, in itself is rare, but to be able to customize the entire system as per the customer’s needs is truly novel! For example, some customers are in fashion, some are in the chemicals business, and they have different needs. You cannot just fit one system on two different sectors. We are committed to solve our customers’ logistics problem and raise their expectation and NEOLink offers the efficiency and convenience of self-service 24X7, no time difference, no downtime.
Furthermore, it is capable of catering to different employee levels in our clients’ companies. This means that it can be tailored to allow different access based on roles and responsibilities. For instance, the director level will be interested in overall pictures of entire shipments and cost structures. The people in operations will be more interested in the nitty-gritties of cargo handling and movement. NEOLink is able to package and showcase the most suitable data to the right people.
Alain: We also applied the NEOLink to rail freight, especially for tracking. We have freight containers in Logfret and we equipped every single container with our trackers. Due to the situation today, all the clients need us to provide an overview of all their shipments to identify the location, schedule and the delivery date. As for rail freight, a lot of clients are very interested in real-time stats. As a viable alternative to ocean and air freight, may clients have opted for rail freight, and with our tools we are able to give them instant updates of the whereabouts of the goods. These days, logistics companies are required to promptly react, as the situation changes fast. Without NEOLink, it would be very difficult to answer the client’s questions and provide input for real-time decision making.
NSRN: In addition to digitalization, sustainability is another frontier that Logfret is consciously pushing. Your website even includes a CO2 footprint calculator, so your customers can calculate the carbon emissions from their shipments. Do you think that there is ample awareness amongst customers for sustainability, or is the market still very much price driven?
Anna: There is no doubt that the environmental impact of shipping is significant. Logfret is committed and chooses sustainability as top priority. The CO2 footprint calculators are interesting tools. Of course, we do notice that our customers prefer price over CO2 footprint. But from our position, we care about the whole environment and offer those options to our clients. The NEOLink team developed our CO2 footprint calculators to be available to everyone, to all customers and potential customers who want to make their transportation adjustments to contribute to a sustainable future. Real-time data generated helps identify carbon emissions on a shipment level, makes a comparison of emissions across different lanes, transit time, and modes, thus allowing companies to measure, reduce and offset their carbon emissions.
If our potential customers want to see comparisons, we do our part as Logfret. The quick, rough estimation of carbon emissions aids companies in their planning. Our job is to educate our customers and introduce them to these options. However, we cannot force them. We do our best to find the most sustainable solution for our customers and give the best advice.
NSRN: Further progressing from the topic of sustainability, rail freight has been seen by many as a cleaner and more environment friendly solution amongst all high-volume transport modes. Alain, when it comes to selecting rail freight as a transport mode, what do your customer typically think about and evaluate?
Alain: The rail freight clients tend to have a specific profile. Most commonly, they need the cargo to be shipped out on time to make it to the delivery site before a deadline. If they can’t, they are at risk of losing the contract with their customer. These are the clients that rail freight caters to.
Some clients who approach us do so just to get an alternative to ocean freight, they usually ask for a similar pricing and the fastest shipping time available. Especially today, we see that ocean freight and rail freight are very similarly priced, and the lead time is more favourable with rail freight. Such clients push for a short lead time, but want to leverage the lower price of rail freight too.
NSRN: Last year, there was a lot of congestion at the rail terminals at the Polish – Belarussian border and the Chinese-Kazakh border. This was partially due to the Covid-19 policies of each country, the significant hike in sea freight price, and the high demand from clients to use rail freight. Alain, how as you joined Logfret during Covid times, can you give us some insights into the operations side in the last two years?
Alain: 2021 was a very difficult year for everybody and our total volumes were impacted, but at the same time all our major clients stayed with us and understood that this is largely due to the problems in ocean freight and air freight. Moreover, it was impossible to use rail freight without any problems, and we faced a lot of challenges with congestion in Europe at all points of entry. Almost every single destination was impacted. We solved the problems with very good communication, this allowed us and our clients to make good decisions and ensure a good routine. Once again, NEOLink tremendously supported us through these challenges. NEOLink gathers the information and lays to foundation to immediately react because it is difficult every time to manage this type of transport just through e-mails. We have seen an upcoming trend in 2022 – a lot of companies decided to halt or reduce their rail freight volumes; thus we will observe and evaluate the situation to decide the path forward.
NSRN: Talking about the halt and drop in volumes, how do you see the future of rail freight as a product? What challenges or opportunities do you think lies ahead?
Alain: From the beginning it has been the efforts of the Chinese governmental authorities to establish and promote rail freight as a viable option. I believe that the Chinese government see this to be a lucrative product and will continue to develop it for years to come. Of course, in early days we knew that the infrastructure was still underdeveloped, but a lot of investment was made to fix that. Today several new routes exist and in fact, there is a lot of possibility within this sector. To give you an example, I hear some shipping lines have already studied the opportunity to deliver to the US East coast through the Silk Road. This is because when you move from China to the US East coast via the Pacific’s, the lead times are very long as the US West coast ports are fully congested. The second option is going through the Panama Canal, which is more expensive and takes very long. We can imagine today doing rail freight from China to Europe and re-forwarding containers to the USA because the transit time between Europe and USA, is much less than what it was 10 years ago. With an average of 20-25 days from China to Europe, you can imagine the advantages.
Today companies are already looking at this possibility but for us, this is an opportunity for the next year. As you know in rail freight, a new route can start in one or two weeks. We see a lot of companies in Europe and China looking for the possibility to ship dangerous goods by rail freight, especially lithium batteries. However, there aren’t many options in the market, those that exist are very small and most often confidential. However, we received some information coming from China saying that the Chinese Government is studying this option because there seems to be huge demand. I hear they require more time to secure this option, since they are dangerous goods and many rules and regulations will apply. The same goes for perishables.
So, we can see emerging possibilities, and there are some clients who are also interested in this opportunity, we just need to develop our capabilities and be ready. I believe this is the future of rail freight and that is why we will continue. You must have seen the development during the last 5 years. I was impressed with that! Between 2020-2021 we almost double the volume on the China-EU Express Rail. It’s incredible. This means there is a real interest. A lot of companies coming from ocean freight discovered rail freight and have now developed their services in this market too. Finally, this mode of transport has become conventional, easily available for everyone.
Unfortunately, many freight forwarders who offer rail transport seem to base their service only on single routes. But there are so many options in the market! We can build rail freight through different terminals of departure, different border-crossings, different arrival terminals, etc. In my opinion, we have a very nice and sunny future! Today, we work step by step, month after month to find the appropriate service that we need for our clients, keeping in mind the different factors, such as point of pick-up and delivery place, we choose the right service. Through such efforts, we strive to become a top-notch rail freight player in the market, that can leverage all routings.
An interesting observation I have is the contrast within Europe when it comes to the maturity of the rail market. Germany really matters, because they are using this mode of transport for many years, and I suppose rail is part of the German culture. On the other hand, it is very interesting to see that companies that are very strong in Germany are not always that strong in the other countries. In France, we are very curious about rail freight. Today, a lot of our clients are interested and will join us on our quest to learn more about rail and carve out our own market for it.