8 Tips for Choosing the Right Freight Forwarder for your Company
Choosing the right freight forwarding partner, whether you are new to the logistics game or thinking of changing your current freight forwarder, can be a daunting task.
In South Africa’s cash strapped economy the temptation is there to base your selection on price alone. Unfortunately, as enticing as it may seem at first, basing your selection solely on rates could be a decision you might regret down the road. The last thing you need is to manage your under-performing freight forwarder rather than focusing on managing and growing your own business.
Every industry has its own expectations when it comes to freight forwarding. For some the need is simply to move cargo from point A to point B. For others it could be a complex project needing robust value adds. So how do you know which freight forwarder is the best fit for your business?
Here are 8 tips that should help you navigate your way through the myriad of freight forwarding companies out there:
- Research: In this digital age we have access to so much information it is relatively easy to find out what your options are before lining up prospective logistic partners. Understanding the logistics industry’s jargon, terminology, limitations and responsibilities will also help you make a more informed decision, and not be overwhelmed by terminology you don’t understand or unrealistic expectations.
- Communicate: In order for the freight forwarder to do their job effectively, you need to have a clear understanding of your specific freighting needs. A logistics partner will need information about your company, your procedures, your deadlines, the product, your preferences, and so on, in order to give you a holistic service offering. If your freight forwarder is not fully informed and up to date with your commodity or documentary requirements, their mistakes or oversights can be costly to your business, so take the time to communicate clearly from the onset. It will save you time and money in the long run.
- Experience: With so many disciplines within the freight forwarding industry – perishable produce, dangerous goods, garments, machinery, chemicals, project cargo, livestock, etc. – freight forwarding companies each have varying degrees of expertise with certain commodities, trade-lanes, and modes of shipping. Even better if you can find a freight forwarder with general experience across all sectors. Make sure the partner you chose is well-versed in the commodity and mode of shipping you require.
- Global: Make sure your freight forwarder has reliable offices or partners to represent them internationally, especially for any EXW, DAP and DDP shipments. As example, there is a misconception that importing from Asia under CIF terms is most cost effective but this is a farce, in fact in most cases it ends up costing you triple and more in local charges. Your forwarder can help guide you in making the right choices with their international partners.
- Back-up Alternatives: The reality of overbooked vessels and airlines in peak season is something your freight forwarder should have a backup solution for. Ensure they have multiple service contracts across land, sea and air in order to offer you back-up options that mean they can still meet your service delivery objectives.
- Financially Stable: Your logistics partner’s financial fluidity has potential for far reaching consequences on your cargo. Finding out your cargo will not be released by the shipping line due to non-payment on the freight forwarding partner’s part is a delay and a headache you should not have to deal with. Plus, the potential for additional fines and charges, such as demurrage and detention, might have to be factored in to your budget. Make sure your potential forwarding partner is financially secure.
- Insurance: Marine insurance is something you need to consider for your freight. Ensure your freight forwarding partner can assist you in making sure you have correct and adequate marine insurance in place for your cargo.
- Track Record: I believe the key elements to a happy partnership when choosing a freight forwarder are reliability, transparency and honesty. Trusting a freight forwarding company with your business promises and deadlines requires trust and assurance of delivery. You want a forwarder who works efficiently within your budget and timelines, with open channels of communication, and that is always aware of your cargo status, so make sure you ask your prospective logistics partner for client references.
With these tips in mind I am confident you will find the right freight forwarding partner for your cargo.
Contact GLA for all your freight forwarding and project cargo needs.