In the process of global shipping, you may come upon situations wherein you may need to change service providers, especially logistics services providers – which is easier said than done as you need to be sure of the reasons for the change, how to control things and people and be aware of negative and positive consequences of the change.
In this article, you will learn to recognize and identify the signs that indicate you need to change your freight forwarder, what to consider when changing freight forwarders or logistics service providers and how long it can typically take to successfully implement the change.
Signs you Need a New Freight Forwarder
Changing vendors for your business requires a firm commitment. If your current freight forwarder is not providing the expected service and adding no value to your company’s operation, your shipments will face a myriad of problems, time and resources are wasted and you may be losing existing customers and future business opportunities.
Here are some of the most common signs that it is time to change your freight forwarder.
Poor Customer Service
Communication
Lack of communication and accessibility is one of the foremost important requirements by shippers in the process of logistics and freight management. Whether it is good news or bad news, a leading freight forwarder will update customers at all times so that they can make alternate arrangements, if needed, for the delivery of cargoes.
If the shipper has no visibility to shipments and the freight forwarder is non-responsive, then there is a strong indication it is time to consider replacing the freight forwarder. Open communication and prompt service is a key requirement. A shipper must have access to the freight forwarder during working hours and, depending on the situation, access outside of office hours as the process of shipping and freight doesn’t stop on a regular working schedule.
Recurring Forwarding Problems
Shipping is a highly dynamic process susceptible to numerous variables such as weather, customs issues, documentary delays, transportation delays, cargo damages, and so on.
A shipper’s freight forwarder should be at the forefront of these issues guiding the shipper proactively on solutions for the various problems. However, if a freight forwarder has failed to deliver time and time again, the repeated failures will start impacting a shipper’s business, supply chain, and ultimately the shipper’s customers as the reliability of deliveries will be called into question.
Ineffective freight forwarders often lose track of shipments, allow roll-over of cargoes because their volumes moved with the shipping line are too low or the negotiated freight rates are not in line with the actual market conditions. If a shipper sees these or similar mistakes from a forwarder, they are indications that it is time to switch to a new forwarder.
Shippers have been known to endure repeated service failures rather than change a service provider. Some shippers feel it is “better to work with a known devil” versus changing to a provider whom the shipper knows nothing about. However, operating in this point of view is not putting your credibility first, it’s simply hoping things do not go bad over going after what a shipper deserves: the best service possible from a freight forwarder. In our digitally enabled world, a cargo owner has several freight forwarder options who will provide excellent service which includes, most importantly, the delivery of cargoes on time and in full.
While the reasons for delays, mismanagement of documents, and the inability of providing timely updates on shipments may be genuine, if these mistakes occur too often and become a pattern rather than the exception then it is time for a shipper to make the switch quickly.
High Turnover (always a new person of contact)
Are you on your fourth new account representative in 6 months? Do you even have an account representative? Do the customer service staff members seem to change faster than waiters at a local restaurant?
Maybe it’s just poor company culture or lousy working conditions. Perhaps the boss is an ogre. Or it could be a sign of financial turmoil and the crew is abandoning the sinking ship. Regardless of the reason, in order for you to operate a smooth and efficient supply chain you want a stable partner with long-term employees who know your business, understand your shipping operation, and unique service requirements and care about your company. High employee turnover is never a good sign.
Company Growth
Businesses grow and evolve. If you have recently expanded your market or product offerings, you may have outgrown the capabilities of your local forwarder. Not all forwarders are alike. Some specialize in air freight only. Some are exclusively domestic. Others are primarily truck brokers. Make sure that you have partnered with a full-service logistics company that provides a complete range of services that matches your company’s growth plans.
Technology
The world of business information systems has changed dramatically in the past 10 years and like most industries, the freight forwarding industry has changed with it.
Along with the industry, your forwarder also needs to have an evolving mindset. If your forwarder is still stuck in the past and has not kept up with technological developments, then it may be time to consider a change.
Whether it is a case of insufficient capitalization, or lack of vision by management, technological developments including real-time tracking and proof of delivery with an estimated time of arrival are now considered “must-haves” for all leading shippers.
In addition, most tech-enabled forwarders offer online quotations, track & trace or electronic billing. If you have to call your forwarder to request a fax of a delivery receipt, you need to evaluate your options. The same applies to document management and exception handling. If your freight forwarder still wants to get your shipment documents via fax or mail, you can be sure that something is missing at the end.
Unforeseen changes in the transport plan can always occur. If your freight forwarder hasn’t invested in the latest technologies, such as artificial intelligence to ensure seamless flow of information and actionable data, the forwarder won’t be able to inform you about any exceptions because they don’t know where the vessels and your shipments are or why there are any delays with the expected time of arrivals and/or deliveries. Lack of visibility due to poor investment in advanced technologies by the forwarder will result in poor customer service and may cause bigger problems at your end.
Freight Rates
Every freight forwarder has its strengths and weaknesses in obtaining efficient processes, services, and competitive freight rates in specific lanes. However, those rates that were great three years ago, may no longer be competitive in a rapidly changing market. If your forwarder is struggling to make a profit and has needed to ratchet up rates, or worse, is just taking your business for granted, you may not be getting the most attractive rates that you would receive with a freight forwarder who focuses on efficiency and carrier relations. For example, if you have not seen your freight forwarder taken your freight out for a competitive bid, it is another indication it may be time to look at other freight forwarding options.
Demystifying the fear of changing
According to an internal customer survey of FreightHub, 80 % of companies in the small-to-medium and large enterprise sector say that is low to medium effort to change their freight forwarder.
The whole change takes a maximum of four hours for more than two-thirds of the interviewed. The effort of changing is dependent on the following points:
- Change operating processes internally
- Switch contact person and internal decision process
- Accounting process
- Integration
The study consisted of 66.7 % small-medium businesses and 33.3% large enterprises. 26.7 % were C-level, 33.3 % Head of Logistics, 20 % Logistics Manager, 6.7 % Team Lead and 13.3 % Procurement Manager.
In addition, these interviewees showed that the potential savings amount up to 35,000 EUR per year when changing the freight forwarder.
How can I Know that the New Freight Forwarder is trustworthy?
Experience & Expertise
How much experience does the company have in the industry? Shipping rules and regulations change over time, and you need a company that can adapt. FreightHub has a motivated team of freight forwarding, operations, customs, and tech experts. More than 70 logistics experts with long-term experience are available to proactively support you in handling your transports, ensuring the punctual arrival of your goods in the desired condition.
Digital Solutions
Digital providers are changing the traditional relationships in the freight and logistics business. Through their digital services, based on big data, cloud, and connected platform technologies, these providers are offering customers a seamless experience coupled with easy access, price transparency and fast, near real-time integrated service.
Trust
Freight forwarders are in the business of handling cargo that is worth millions. They are involved in picking up, forwarding, documenting, delivering cargo all day long. In addition to the standard activities performed by a freight forwarder, they also perform value-added functions such as customs clearance, transportation, etc. Therefore, there has to be a level of trust when you entrust your cargo to a freight forwarder. There are many ways in which you can conduct due diligence on a freight forwarder before you place your trust.
- Word of Mouth would be one of the best methods of finding a service provider you trust. Get recommendations from the market place.
- You can visit the forwarders place of business to gain first-hand knowledge about their activities and also see the activities for yourself.
- You could find them through freight forwarder networks.
- Recommendations from carriers who deal a lot with various forwarders.
Understandable and Reliable Pricing
A diligent forwarding partner will not only deliver you an easy to understand and transparent quotation but also helps you to understand their pricing structure. If the freight forwarder does not focus only on profit maximization but also on customer satisfaction, they will consult with you in decreasing your total cost of shipment.
A freight forwarder may offer you some very attractive freight rates which will improve your bottom line, but be wary of how these rates compare in the market and the possible risks of accepting such low rates. When there is a space crunch on a particular vessel, the shipping lines will most of the time look at low paying cargo to roll over. The few dollars that you may save will not be worth you losing your business and delivery schedule.
Great Customer Service
Customers should always come first in every business. A trustworthy forwarding partner should treat you like the most important thing in their business. If your forwarder appreciates you as a customer, you can be sure that your shipment will arrive on time and in full.
Industrial Adaptations
A good freight forwarder has knowledge of your industry and a willingness to help you export or import goods. They should be your partners in every sense of the word, handling your business efficient and accurate.
As experts in the field, the freight forwarder should be able to guide you and advise you on the requirements for your cargo, the best mode of transportation both in terms of cost and time.
They should be able to guide you on which type of containers you need to use, the best packing methods to prevent your cargo from getting damaged, etc. They should also be able to guide you in terms of the documentary requirements in the destination country, the proper Incoterms to be used, etc.
Strong and Reliable Partner Network
In the exporting world, having professional relationships is key to success. A freight forwarder can not exist without other partners and local agents to manage a shipment end to end. So check beforehand if your vendor has a strong overseas network to ensure a properly managed cargo wherever in the world you ship to.
Any questions about how to change your freight forwarder?
Forto is Europe’s first digital freight forwarder for your global trades in being your co-pilot: you can handle your global transports with our intuitive freight forwarding platform as your single source of truth. You benefit from reliable processes, transparent data, and an efficient supply chain. This simplifies the cooperation between your suppliers and team.
We differentiate us from other freight forwarders in redefining supply chains through technology. That’s why we aim for your success is our success.
