The supply chain of your company can be made or broken by the choice of a freight
forwarder. Reliable partners ensure smooth transport, on-time deliveries and cost
effective solutions. A poor decision can result in unexpected charges, delays and
logistical problems. A study by the industry found that businesses who fail to properly
vet their freight brokers face higher shipping rates and a greater risk of mishandling
cargo. We've listed the most common mistakes to avoid in selecting a forwarder.
Check out this detailed guide to find out how long it takes to ship.
The Price Is Not the Only Factor to Consider
While it’s appealing to go with the lowest-priced freight forwarder in order to save
money, this can often be a mistake. A low price may seem attractive, but there can be
hidden costs, including fuel surcharges and documentation fees.
Considerations for
The difference between the true cost and quoted price The quoted price: If the
quote is low, it could be a sign of poor service, late shipments or hidden
charges.
Costs in the Long-Term: Cutting costs can result in delays, damage to goods or
costly penalties.
Example of a Case Study A low-cost freight forwarder was chosen by a
company, but they were faced with delayed shipments, additional storage
charges, and ultimately paid 40% more.
Experience and Specialization Matter
All freight forwarders do not operate the same. Others specialize in certain industries
while some handle general cargo. A forwarder with no relevant experience could lead
to costly inefficiencies.
Important Considerations
Industry Experience: Make sure they are familiar with your industry (e.g.
perishables, hazardous materials or oversize cargo).
Local vs. Global Knowledge: When shipping internationally, make sure your
employees understand the customs laws and agreements.
What are some questions to ask? How long have they worked in this industry
for? How have they helped businesses just like yours overcome challenges?
Always verify licenses and certifications
To operate legally, a freight forwarder must have all the required licenses and
certificates.
What To Check When You Test
Certifications: Check for FIATA and IATA licenses.
Compliant with International Regulations Ensure that they comply with local and
international trade laws.
Red Flags Unverified credentials or expired licenses.
The Technology Infrastructure can change the game
A freight forwarder who uses outdated technology in today's digital age can seriously
slow your business.
The Must-Have Technology Capabilities:
Track and Trace Systems : Real-time visibility of shipments helps manage
inventory effectively.
Documentation: Reducing paperwork errors, and speeding up the processing.
Integration of Systems: This ensures seamless communications between their
systems and yours.
Stability of the Financial System is Critical
Your shipments could be stranded if a financially insecure freight forwarder goes out
of business during the transaction.
How to assess their stability:
Request Financial Statements if Needed.
Watch for signs of trouble: frequent staff layoffs or unpaid vendors, sudden
service interruptions.
Due diligence Checklist: Perform background research and check references.
Your experience can be made or broken by the customer service you receive
Freight forwarders should not be just service providers, but proactive communicators.
You Can Find Out What HTML0 Is By Looking at It
Response: Does the company respond to queries promptly?
Problem Solution: What is their approach to disputes and delays?
Support After Hours: Is it available in an emergency?
Language and Cultural Compatibility: Prevents miscommunication, particularly
for international shipments.
Global Networks and Partnerships Matter
Strong networks ensure smoother processes for shipping, lower rates and less delays.
The Key Factors
Partnership: Are they solid carriers?
Local presence in key markets: Is essential for efficient customs handling and
local logistical management.
Options for Carrier: A greater choice of carriers means better prices and
reliability.
Check Reviews and References
Good freight forwarders should be able to rely on positive feedback from their clients.
What to do with them:
Online Reviews: Google Reviews, Trust pilot and Industry Forums.
Industry Reputation: Do they have a good reputation?
Liability and Insurance Should Not be Ignored
Accidents can happen. Please make sure that you are covered.
The Basics You Should Know:
Understanding cargo insurance options .
Claims Process – Make sure it is clear and does not have loopholes.
Minimum insurance requirements: Make sure their policies are suitable for your
needs.
Consider a Trial Period Before Committing
Before entering into a long term agreement, a test run is advisable to evaluate the
reliability of your partner.
Setup Instructions:
Test Shipments Try a smaller batch to assess the performance.
Metrics that are important to track: Include delivery times, accuracy and
communication quality.
Criteria for Decision: Determine if they are meeting expectations prior to signing
the full contract.
Red Flags to Look Out for
Watch out for these warning signs
Quotes that are unusually low
Pricing that is not transparent
Poor communication habits
Inconsistent documentation
Staff turnover is high
Physical presence
How to Properly Evaluate a Freight Forwarder
Structured decision-making will help you to make the best choice.
Follow these steps:
Create a Checklist for Assessment: Comparing potential forwarders.
Key performance indicators: include on-time delivery and accuracy.
Visit the Site: A visit to a company's site can tell you a great deal about its
operations.
Carefully Review Contracts: Make sure the terms and conditions are aligned
with your needs.
Conclusion
The decision to choose the best freight forwarder can have a significant impact on
your supply chain. You can avoid common pitfalls by conducting thorough
assessments and ensure smooth logistics. This will also save you money and create a
solid partnership. Do your homework, prioritize quality and take your time. The best
freight forwarders are not just service providers, but extensions of your success.
Alliance Freight offers expert solutions for freight shipping. Discover how we can help
you optimize your shipping operation.
