Unfortunately, small and medium freight forwarders face a greater risk of demise in 2022. The demands for more volume, faster service, and lower costs continue to push forwarders to their limits. Freight forwarders run the risk of failure, and without the right practices in place, contribute to a higher cut-and-run rate among your shippers.
Ineffective freight forwarders often lose track of shipments, allow roll-over of cargoes because their volumes moved with the shipping line are too low. This generally means that 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.
1. Digitize Invoicing and Accounting Practices
The first step to success in the digital age is simple. Freight forwarders need to digitize their invoicing and accounting practices. Digitalization of freight quoting is the first step, and next, forwarders should look towards digitization of all operations and processes, especially invoicing. This can reduce the time it takes to capture payments from shippers, improve documentation compliance, and much more.
2. Give Shippers the Power of Choice
The best freight forwarding tips take advantage of the obvious and attempt to create a perception that the shippers are always in control. The irony is that with digital systems, such as APIs, freight forwarders can shift control over the process toward their customer and often more so on the shippers’ terms. Through integration, freight forwarders could reach new business-to-business clients around the globe, and they can even lessen the workload at the same time.
3. Track Accessorial Charges for Clients, Providing More Service Without Higher Costs
Another essential freight forwarding tip for success includes tracking of accessorial charges assessed by carriers, port authorities, logistics service providers, and other entities involved in transporting freight. It is easy to assume carriers will be honest and provide accurate quotes regarding shipment arrival, departure, and on-time arrivals, but guarantees may not necessarily hold up/ We all know that adverse events outside of our control, such as the weather, can impact the supply chain. The risk of added charges is not going away, and as explained by Shipping and Freight Resource,
“Carriers often perform other services than just driving. They may have to load or unload the cargo, wrap some pallets, or make additional stops.
Such services are often not included in your cost estimate. Consequently, customers sometimes end up being surprised when they receive their invoices. For this reason, make sure you ask the company about all the extra fees you can expect.
Some of the most common unforeseen fees come from not understanding and not applying accessorial fees.”
By recognizing these charges and tracking them for shippers, freight forwarders can provide a vital service and further build rapport with shippers.
4. Consider Loyalty Points and Discounts When Quoting With and Hiring Carriers
Freight forwarding tips also include taking advantage of limited-access trade networks and discount programs when quoting freight and hiring carriers. Such programs are critical to keeping freight spend under control for shippers and staying competitive, especially in a tight capacity market.
Take some time to get to know your shipping carrier and work on building a relationship. Remind your carrier how long you have been using their services and that you are a loyal customer. Once your carrier knows they have and can rely on more steady business, they are likely to offer better conditions.
Hence, rather than switching to a new carrier, develop a good relationship with your current one. You will be surprised how much you can save through a strategic, long-term relationship. All reliable companies will do their best to keep regular customers.
5. Consolidate Loads to Lower Shipping Costs and Improve Space Utilization
Finally, freight forwarders could apply their neutral position to consolidation loads and improve space utilization. Depending on the carrier, such additional measures may result in significant discounts. Moreover, carriers could use consolidation to build shipments of any size, and freight forwarders that embrace consolidation/deconsolidation can drive revenue at the same time maintain flexibility.