Whether you are a new business in need of freight forwarding services or an established one already working with a freight forwarder, you need to pay attention to the freight forwarder set-up to ensure that you receive maximum value for your investment. Freight constitutes a large part of overall supply chain costs and focusing on it can improve your profits. It’s important that you see it as a strategic part of your business and spend time in setting it up right so as to save time and resources later on.
Proactively working with your freight forwarder in setting the expectations and processes upfront can save you time, energy and money. Leading CEOs and Logistics solutions Managers understand this and ensure that they engage their freight partners at the right level at the beginning of the relationship to get the desired results. Even if you have been using freight forwarding partners for quite some time, it’s not too late to use these powerful tips to improve your freight forwarding operations.
Read on to learn 7 powerful tips which can assist you in improving your freight operation and save your business money.
1) Have a plan
A well-laid down freight plan will provide long-lasting benefits and assist in your business growth. Define your goals, objectives and expectations from the forwarding relationships even before you start engaging with freight forwarding companies. Undefined goals in terms of either service level or costs with your freight forwarder are likely to have negative consequences in the future and can impact the service level as well as the customer satisfaction level. There are many freight suppliers in the market and having this plan will assist you to select the ones that you should be engaged to build a long-lasting strategic relationship and enjoy consequential benefits.
2) Define roles, responsibilities and liabilities
Defining roles, responsibilities and liabilities eliminates uncertainty, brings transparency, saves time and can speed up the process. The absence of clarity in these areas increases the chances of potential conflicts, process failures, decreased service levels and increased costs of operations. Defined standard operating procedures (SOPs) including roles, responsibilities and liabilities will assist in avoiding these challenges. Businesses should make it a practice to define as well as evaluate these SOPs periodically to avoid conflicts and create fruitful relationships.
3) Sign an agreement with your freight forwarder
An agreement between the customer and freight forwarder clarifies requirements, liabilities, commercials and legal terms which should to be mutually agreed and followed by both the parties for a flawless operation. A yearly or long-term contract saves time, energy and risk due to market fluctuations whereas, per shipment negotiations require attention every time, consumes energy, increases the risk of omissions and delays shipment. Proactive and experienced business managers in Australia know that per shipment negotiations can give them off-seasonal cost benefits, however, in the long run, signing a yearly agreement with their freight forwarder will benefit the business with better control, reduced risks/liabilities, better rates throughout the year and better relationships.
4) Regularly evaluate performance
Evaluating performance and KPIs assists you to elevate the performance of your freight operations, set responsibilities, identify areas of improvement and take other proactive measures. This also assists to keep your freight forwarder on their toes as they know that they will have to present their report card and must keep the performance high all the times.
5) Engage as a one-stop shop
Freight operations constitute a combination of international transportation, customs clearance, trucking, short period storage and other value-added services. Business managers have a choice to engage multiple partners for all these activities or work with a freight forwarder that provides all these services as a one-stop shop. Working with a single, well-chosen provider saves time, energy and sets responsibility on one single entity for the complete work. Leading business managers understand this and have the end-to-end capability as an important selection criterion for their freight forwarders to avoid the hassles of coordinating with multiple service providers.
6) Open and frequent communication
Information flow forms the backbone of freight forwarding operations and for best results, it must flow from both sides. Incomplete, insufficient and inaccurate information hampers operations and invariably results in failures. Information flow regarding forecasts, cut-offs, shipping schedules, shipping status and transiting inventory must be clearly set-up and followed without fail to ensure that everyone stays on top of their part of the role. Open and frequent communication assist in keeping operations running flawlessly.
7) Efficient financial flow
While engaging a freight forwarder, pricing along with credit and terms and conditions must be clearly agreed and fair. Pushing your freight forwarder by asking for extensive credit terms will hurt both parties in the long run. Failure to achieve desired profits, delay in payments or large outstanding balances are circumstances which create dissatisfaction and negative impact relationships. To maintain a good relationship, businesses should set realistic payment terms, avoid over-due payments, situational negotiations, mismatched account statements and undefined clauses for consequential losses. Positive management of such circumstances builds resilience into the relationship and creates long-term value for all involved parties.
When international freight forms an important part of your overall operation, as it does with the majority of businesses in Australia, it is important to set up the relationship comprehensively and properly. The set-up should put demands on the freight forwarder partner to regularly evaluate performance and plan actions which can improve the operations continuously and assist to stay on-course to achieve desired goals and objectives. Using these 7 powerful tips will assist your business to achieve the goal of maximising value with your freight forwarding partner.
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).