Freight forwarding plays a vital role in determining the landed cost and delivery timeline for any product. Leading businesses are able to establish the right balance between the costs and product availability. The freight cost makes up a considerable part of the landed cost and assists when deciding the market price for your product. Economical freight costs can assist in developing a lower landed cost and hence a better market position against your competition and improved profitability. There are some smart strategies that importers and exporters can use that include using the most appropriate transportation medium, collaborating with an established freight forwarder, signing long-term freight forwarder contracts, efficient packing, stuffing and complete-accurate-timely (CAT) documentation to make the freight forwarding operation for your products economic and immaculate.
Read on to learn 5 smart strategies you can use today to ensure operational excellence and economical freight forwarding operations.
1) Choosing an appropriate transportation medium
Choosing an appropriate transportation medium is one of the most important elements in keeping freight forwarding cost economical. In freight forwarding, turnaround-time (TAT) and costs are inversely proportional to each other. Keeping transit time on the minimumal side increases the cost and vice-versa. Therefore, both should be in equilibrium for economic freight forwarding and timely delivery. Shipping the cargo by air freight when you have sufficient time to ship via the more economical mode of sea freight should be avoided. Leading Australian Supply Chain and Logistics managers keep costs down by choosing the most appropriate transportation medium and by preparing goods on time to avoid the need for immediate shipping.
With airfreight and sea freight, multiple flight/vessel options are available with different schedules and cost. Preparing cargo on time gives flexibility to connect the load to the planned vessel/flight and thus avoiding the chance of higher shipping charges due to last minute planning. Smart businesses in Australia receive assistance from their experienced freight-forwarding partner when choosing the most appropriate transportation medium which assist in avoiding unnecessary freight cost.
2) Collaborate with an established freight forwarder
Collaborating with established freight forwarder brings will assist in keeping your freight forwarding costs economical. With decades of experience, established freight forwarders have multiple carriers (airlines/shipping lines) relationships and options so they can handle your freight flawlessly. Having large volumes, friendly relationships with carriers and freight forwarding as a core competency, freight forwarders in Australia have an upper edge and better negotiation power. Smart business managers in Australia relish these benefits by collaborating with an established freight forwarder and receive more economical freight rates.
3) Long-term contracts with freight forwarder
The global freight forwarding market is huge and influenced by many factors. Crude oil price, port congestion, cargo congestion, peak seasons and government policies are influencing factors that affect pricing policies of shipping and airlines. These factors can make air freight and sea freight costs non-uniform throughout the year as opposed to having a consistent price thoughout the year. To break this dilemma and for economic freight forwarding, leading Supply Chain and Logistics solutions manager in Australia utilise a smart strategy and sign long-term contracts with their freight forwarders. This assists them to deliver the product at a fixed economic cost throughout the year.
4) Pack and stuff shipments efficiently
The right packing of goods has a huge impact on freight costs. For sea freight shipping, fill rate of the container can make a huge difference and the volumetric weight based on packing dimensions plays a vital part in freight cost calculations. Inefficient packaging and improper stuffing of the cargo can result in hundreds of extra dollars in freight costs. Therefore, efficient packaging and stuffing plays a very critical role in economic freight forwarding. Alignment with an experienced freight-forwarding partner in Australia assists in the right packing and stuffing of the goods and keeps freight forwarding costs economical.
5) Eliminate detention and demurrage charges by CAT documentation
Detention and demurrage charges significantly increase the landed cost of any shipment, if not managed proactively. Business managers in Australia understand that for flawless custom clearance, complete-accurate-timely (CAT) documentation is essential. Incomplete or improper documentation will delay the shipment for days or even weeks and is a major reason for detention and demurrage. Detention and demurrage add multiple costs on to freight charges and increases the landed cost of the shipment. Therefore, for economic freight forwarding it is a smart strategy to work with an experienced freight forwarder and complete documentation in advance so that cargo could be delivered at the forecasted costs.
Economical freight forwarding is a focus for successful businesses. However, a lack of information and knowledge makes this task very challenging for most businesses. Many shipping managers assume that to keep freight costs low, choosing inferior services or changing freight forwarders all the time are the best options available. Doing this is likely to compromise services, product safety and delivery timelines. By adopting the above mentioned 5 smart strategies, businesses in Australia can receive economical freight forwarding without effecting service level, customer satisfaction and delivery deadlines.
For more than a century, BCR has continued to help small, medium and large businesses achieve an optimum logistics solution with warehousing and transportation, including air freight and sea freight services to and from the major ports including Brisbane, Sydney, Melbourne, Adelaide and Fremantle (Perth).