Finding the “right” freight forwarder is no easy task; they all appear to sell varying versions of the same thing and are in absolute abundance (there are over 680 registered freight forwarders in Australia alone!).
So what makes a freight forwarder the “right” one? While cost is certainly important, there are additional factors that must be considered when choosing a forwarder that might save you a lot of headache in the long run. To make the decision making process easier, here at Explorate we have put together a checklist of questions and things to consider when deciding which forwarder is the right one for you.
Customer service: Outside of physically moving freight, the customer service experience should be front and centre when reviewing what makes a good freight forwarder. It’s easy to forget it’s a service industry!
Your expectations of a forwarder must be clearly defined and adhered to.
- Do they offer you a dedicated account manager?
- Do they perform a quarterly business review?
- Do they have a metric for email/phone call response time?
- What is their after hours capability?
- What are their reporting capabilities?
A freight forwarder that truly shines through is one that not only sells their ability to go the extra mile, but does.
Technology/Technical capability: A good freight forwarder should embrace new technologies and allow you to benefit from it. Track and trace is one thing, however there is a whole world out there full of new and innovative ways to run and improve your supply chain. Key thoughts here are:
- Do they run pilot programs (e.g. new inventory optimisation tools), provide supply chain health checks and/or impart other value adds that you can utilise?
- Is their track and trace manual (most of them are!) or EDI linked to all major carriers?
- Can they help you go paperless? Your freight invoices, bills of lading and shipper letters of instruction (SLI’s) can (and should) be digital. This will help you achieve a paperless supply chain.
- Predictability (and reliability): Predictability is the building blocks of a good supply chain. A freight forwarder that can deliver this is invaluable.
- How often do shipments arrive as planned?
- Is what is promised, delivered?
- Does the cost of freight vary greatly? (good procurement should avoid this)
- Do they experience issues with containers missing sailings? If so, why?
Network/Global reach: Bigger isn’t always better, but it’s important that their infrastructure capability aligns with your supply chain requirements.
- Does the forwarder have a local presence at the origin/destinations in line with your manufacturers/customers?
- How long has the forwarder been operating in these locations?
- Do they have capability to add value to your global expansion plans? How?
- Consolidating multiple consignments can take a huge chunk off your freight bill - does the forwarder have consolidation freight hubs that geographically align to your supply chain?
Trade lane strength: While a german logistics giant might be a dominant force in Europe, its capability in Asia could be anything but that! How big is their operations in your specific origin/destination countries? Orchestrating freight from regional Vietnam is very different metropolitan Frankfurt. Procure a freight forwarder with strengths that align to your geographical requirements. It’s not uncommon to have a freight forwarder per trade lane. Industry Vertical strength: The automotive industry couldn’t be more different to the cosmetic industry, and neither could their supply chains!
How well does the freight forwarder know your industry? Has the forwarder had experience with companies similar to yours? Do their industry strengths complement yours? Don’t be afraid to ask for case studies that show exactly how companies similar to yours have benefited from using this forwarder (e.g. transit time reduction & freight savings).
References: Unfortunately there is no Yelp for freight forwarding, for this you’ll have to ask around. Have you heard of the company before and/or do you know anybody that has used them in the past? A quick way to do a sanity check is to simply ask for external feedback on them. Exception management: This one you likely won’t be able to judge until something goes wrong. Eventually something usually does, so retrospectively ask yourself;
Did they care about the problem and show urgency to find a solution? Communication, communication, communication! Did you feel up to date throughout the process? Was a satisfactory alternative provided that (hopefully) mitigated any delays?
As you can tell, there is a lot more to consider when choosing a freight forwarder outside of the price that they can move your goods at. A freight forwarder does their best work when they operate as a value add to your supply chain rather than just act as a facilitator. While moving freight around the world takes immense skill and knowledge, this facet only makes up a portion of the value a forwarder can add to your business. Your freight forwarder can be the makings of a good (or bad) supply chain, so choose wisely.