Empowering Freight Forwarders with AI

Solvo.ai developed this series of articles to look into three key areas where Artificial Intelligence (AI) is revolutionising the freight forwarding industry. We will explore how AI is driving operational efficiencies, enhancing customer retention, and ultimately improving margins. Each article will provide in-depth insights and real-world examples from our esteemed industry leaders, painting a comprehensive picture of the transformative power of AI in freight forwarding.

Part 3: Improving Profit Margins and EBIT

Improving margins is a constant challenge in the freight forwarding industry, with average EBIT hovering around 2-4%. By harnessing AI for dynamic pricing and smarter decision-making, forwarders can boost profits in a highly competitive market, giving those who adopt this technology a valuable financial edge.

To explore this optimistic perspective, we interviewed two freight forwarding veterans, each bringing unique insights and extensive experience. Despite the diversity of our backgrounds, we all hit on major areas regarding how AI will empower freight forwarders going forward. Below, you’ll find perspectives from: 

• Sune Stilling, ex-Founder and Managing Partner at Maersk Growth now building the first supply chain and logistics focused venture fund in Europe, Nine Realms
• Will Urban, a Freight industry veteran, who after a prolonged career with Expeditors, grew Flexport from $600m to $4.5bn revenue in his capacity as Chief Revenue Officer

This conversation is far from over. In fact it’s just the beginning. Reach out to let us to know how you see AI impacting freight forwarding—and where you think this exciting and dynamic field is headed - Gaurav Bajaj, CEO, Solvo.ai  

Leveraging Dynamic Pricing to Transform Margins

At the end of the day, what matters most in this industry is margin with an average EBIT of 2 - 4%. As Sune puts it: “The industry is nothing like 20 years ago where nobody knew what anybody was paying. Today, shippers have a pretty good indication of the shipping rates based on indices such as FBX. So, as a forwarder, you need to find creative ways to improve margins.

For Solvo.ai, the dynamic nature of pricing freight presents its own unique set of opportunities. Pricing can be a black box for forwarders. While it is largely based on aggregate market information, each forwarder is unique—they’re different sizes, based in disparate locations and pursue wildly different business strategies. What Solvo.ai is doing is using technology to empower forwarders with an ability to create a tailored pricing strategy that caters to customer behaviour and expectations.

Bridging Strategy and Sales to Drive Profitability

Over his 30 year Freight Forwarding career, Will has learned just how important pricing is in an industry that runs on thousands of static rule-based processes. “How do you connect the strategy in the boardroom to the sales execution on the ground? That’s the million dollar question. There’s always been a big disconnect in that sense and implementing AI that helps marry those two together is the path to improving the bottom line.

”Will’s insight highlights a core challenge in freight forwarding: bridging the gap between strategic goals and frontline sales execution. In a sector dominated by static, rule-based processes, aligning boardroom pricing strategies with day-to-day operations has been a struggle. AI offers a solution, enabling real-time adjustments that bring strategy and execution into sync, driving consistent pricing outcomes and strengthening profitability.

In Conclusion...

Forwarders I speak with often express the need for greater oversight and control. Many expanded quickly, leading to decentralised, country-managed P&Ls as the norm. But we’re in a new era where customers demand transparency and hassle-free shipping. This shift has driven forwarders to re-evaluate their customer approach and the technology that supports it. Without control over their first point of engagement—rate offered, delivery speed, and margin—they risk losing their customer-centric edge in volatile markets. That first engagement is crucial.

As we conclude our series, it’s clear that AI is more than just a technological advancement; it’s a vital tool for financial growth in freight forwarding. By enabling dynamic pricing and improving decision-making, AI helps forwarders boost margins and remain competitive. At Solvo.ai, we’re excited to support this transformation. Contact us to discover how our AI solutions can enhance your margins and business performance.

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