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3 Reasons Shippers Change Forwarders - How Forwarders Can Benefit

In this blog, we’ll discuss the 3 primary reasons shippers might consider changing freight forwarders, and what forwarders can do to grab the attention - and business - of these shippers.


THE SCOUTING SHIPPER


The reasons for shippers switching carriers are many:

  • Inefficient and recurring service problems

  • A loss of trust due to dishonored agreement clauses

  • Even simple reasons such as a high employee turnover rate where the shipper has to deal with a different account representative every few months, may cause a shipper to reconsider his tie-up with a particular carrier.

The underlying premises remain the same: shippers want to edge out competition at all times and seek methods that help them achieve their objectives. For some shippers, beating the competition may mean being closer to the top; for others, it could be a matter of survival.


In any case, shippers scout for new forwarders all the time, and in their scouting lies an opportunity for the forwarder to pitch his services.


3 PRIMARY REASONS SHIPPERS MIGHT CONSIDER CHANGING FREIGHT FORWARDERS

  • Customer Service

Take a scenario: A shipper is involved in Just in Time (JIT) operations like retail or automotive. Transit times are extremely crucial; late deliveries bring assembly lines to a standstill, halting production. The shipper, because of the carrier, could not meet customer requirements and must now face dire consequences in the form of a tarnished reputation or lost business.


How Forwarders Can Leverage The Situation


Social proof is one of the biggest assurers - assure scouting shippers of your business stability by citing successful project completions. Understand the shipper’s background, his need for changing carriers, and specifically highlight the elements that were lacking in the shipper’s carrier which you are able to provide efficiently. Taking the above example, you can discuss the details of JIT deliveries you have made over the past years for customers in a certain region.


Next, bear in mind that rates are pre-decided, and thus the shipper won’t complain all too much about the rate once it is agreed upon, but services are experienced live, and there’s no recovery from a bad service experience provided. Ensure that you do not mislead the customer on the scope of service you provide. Ensure that you are compliant with industry standards and regulations on all fronts, and that you don't short-ship the customer at any point. Only agree to what you can deliver, and oversee the project to completion.

  • Price/Rates

The most tangible and easiest measure of judging a freight forwarder’s services for a shipper is price. As discussed above, service is experienced after a contract is drawn up. Rates, however, are on a shipper’s table well before a decision is made. Although the primary concern of a shipper is always well-executed service, it is the nature of things to take price as the primary criterion. Just as a regular person may lean towards buying a pair of shoes worth Rs. 2,000 instead of a pair worth Rs. 5,000, even if the former pair will last 1 year and the latter pair will last 3-5 years. The argument is somewhat simplistic, but so is the human decision-making mechanism: lesser rates are always more attractive.


How Forwarders Can Leverage The Situation


The most obvious point is to offer competitive prices that are attractive to the shipper. However, continuing our above example, just because people buy shoes for Rs. 2,000 doesn’t mean that there isn’t a market for shoes worth Rs. 5,000. The point is, if you are charging higher for your forwarding services, there must be great reasons as to why you do so - so justify your costs by showcasing how you are driving down costs, plugging revenue leakages, and optimizing spends.


Next, be completely transparent - do not fail to disclose any fees/costs. Especially with the global cost inflation and peaking container rates, make sure that the shipper does not encounter any hidden or unexpected expenses from your end in the future. The finer detail to understand here is that the premise of a contract, in the beginning, is based on distrust. Forwarders have the opportunity to earn trust later, but initial transparency is an absolute must.


When it comes to rates, delivering value for the rate charged, being transparent, and building a fact-based relationship with the shipper are the surest ways to earn the shipper’s business. The parties can also look at fetching unbiased, objective data on freight rates from neutral sources so as to understand the current market rates and be confident in entering the transaction right from the start.

  • Technology

The rate of technological adoption in the logistics industry has been unprecedented since the past 3 years. Shippers have taken note of this development, and now understand the benefits of working with tech-enabled forwarders - efficient, automated work with superior control over cargo movement. Shippers expect to have access to real-time tracking, electronic billing, online quotations, and other tech-based integrations into their daily activities. Information and control are key, and what tech can offer in terms of those two, non-tech cannot. This search for a tech-enabled forwarder is one of the biggest reasons shippers will move from their current services and be intrigued by others.


How Forwarders Can Leverage The Situation


Logi-Sys by Softlink Global is an internationally acclaimed all-in-one freight forwarding solution that has been making forwarders the preferred choice of shippers for 2+ decades. Whether it be forwarding, warehouse, transportation, billing, or customs, Logi-Sys contains multiple integrated modules for forwarders to provide a one-roof-spans-all service model to shippers. Logi-Sys today boasts of a +4500 clientele spread across more than 45 countries. In addition to opt-in modules, Logi-Sys:

  • Offers a completely cloud-based experience

No server maintenance or heavy IT Infrastructure overheads. Cloud-based operations, with an e-Sanchit Automation Implementation bot and mobile apps ready for assistance

  • Is scalable

If you’re just an up-and-about forwarding business and using Logi-Sys, you don’t need to go elsewhere in the future. The business application expands to meet the scope of your business as you create an established infrastructure

  • Has an E-Doc Management System

A paperless office where all documents are stored electronically, with the system being able to automatically scan, capture, index, and retrieve quotations, documents, and invoices.

  • Contains a Report Scheduler

Forwarders, through the Report Scheduler, can dispatch reports at pre-defined intervals, in addition to providing alerts and notifications for each customer separately, via milestone tracking

  • Allows you to create your own Customer Portal

Our customer visibility portal is white-labeled, meaning you can design it as per your own brand guidelines and offer document sharing, booking, tracking, and other service to shippers under your own brand head


These are just 5 features; visit the Logi-Sys feature section to read about the remaining 10!


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