Are you like John, a CEO of an SME in Melbourne, and prefer immediate cost benefits over relationships? Neglecting the importance of building relationships with service providers and switching around to obtain cheaper solutions is a fairly common practice in business. While this can offer instant bottom-line benefits, it does deprive you of some important long-term paybacks.
Building strong and productive relationships with freight companies can enhance your entire supply chain operation. The best ways to achieve this include exchanging information, regular meetings, showing trust and understanding each parties mutual requirements. By incorporating building relationships in your strategic plan, you are ensuring flow-on benefits in terms of ensuring your can keep your customers happy in the long run.
Read on to know how CEOs can benefit from a better relationship with their freight forwarding companies.
1) Better understanding of your requirements
Every product is different and requires special attention, handling, and care. Your freight company is responsible for ensuring product movements reflect your specific requirements. Any ambiguity in their understanding of these can lead to undesirable outcomes and impact delivery performance. Make sure your freight forwarder is on the same page you are – and develop a relationship that makes them aligned with the unique requirements of your goods and scheduling, including documentation, handling, packaging and delivery requirements.
2) Get extended support during critical situations
Due to the highly unpredictable nature of freight forwarding, any unexpected incident requires immediate attention. Some of the complications that can occur include uninformed cargo inspections, port congestions, delays in custom clearance and diverse government rules and regulations that can cause a delay in your cargo delivery. Fixing the glitches may require either completing documentation, making a payment or even a physical visit to ensure shipments are cleared. Any delay in fulfilling these requirements not only impacts your end customers, it can result in additional penalties. A good relationship with your freight forwarder provides you with support during these critical situations. So, having a good, long-term relationship with John, the CEO from Melbourne, means his Australian freight company will often choose the best solution, and go the extra mile to manage penalty payments or even represent him, the shipper, in order to deliver the cargo swiftly.
3) Get steady services and mitigate price fluctuations
Price volatility in freight forwarding services is one of the biggest concerns for Australian CEOs. Freight forwarding services include air freight and sea freight, surface transportation, custom clearance services, loading-unloading charges and documentation fees. These services are highly impacted by outside factors such as crude oil prices, market demand, space availability and government policies.
A better relationship with your freight company gives the upper hand, and allows you to secure freight services at minimal cost even when space is congested. In addition, strong relationships boost the freight companies’ trust and encourages them to apply open book policies and work with highly negotiated margins.
4) Continual improvements that impact your whole business
A long-term and better relationship between you and your freight company improves your understanding and engages the freight forwarders in a process of continual improvements. Freight companies thoroughly know the freight forwarding requirements for your products including the most suitable transportation mode, cubic capacity utilisation, handling criticalities, documentation requirements and geographical challenges.
Getting access to this information is very useful for any CEO, as it can enhance product development, packaging design and process improvements. This information also assists you in providing practical cost and transit time information to your customers. This can be a point of difference from your competitors, and lead to improved customer trust through maintaining excellent service levels.
The basic rule of business sustainability is all about building relationships. Frequently changing freight forwarders can give you lower freight rates, but it cannot provide the same kind of stability and trust. A strong relationship with your freight forwarder provides information security, better handling and support when things go awry.
Therefore, CEOs who wish to keep their international freight forwarding operation efficient and prepare it for a long-term success, need to build and maintain a good relationship with their freight forwarding partners.
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).