9 Mistakes to Avoid as a First-Time Freight Forwarder

As a new forwarder, it's easy to make mistakes. Like you, many forwarders have faced inconveniences in routine tasks like improper documentation or delayed communication with teams and customers. Fortunately, mistakes are avoidable, especially when your processes are in place and you know what common blunders to look out for.

In the eagerness to provide your customers with the best, little slip-ups are natural. While your focus is on doing it right, you will need the right support from your team member, stakeholders, and technology. Read on to know how you can avoid the mistakes of others with some tips for a smooth start to your new business journey.

1. Not booking early enough

"Book in advance" is advice that is repeatedly shared. Yet it turns out to be the number one reason forwarders lose prospects for simply not following the advice enough. Do the legwork before you approach clients. Establish a reliable network with agents and carriers to ensure you're guaranteed space at the best rates.

2. Give your shippers only a few options

Early on, you may want to earn big margins on your initial transactions. Say a customer wants to ship from the U.S. to the U.K. One of the air modes gives you X margin for a shorter shipping time via the air route but a long time and a lesser margin via the sea route. When you provide an additional option with a sea route too, it tells your customer of your multi-modal capabilities too.

3. Ditching insurance for cost-cutting

Forwarders on humble budgets could prioritize cost-saving before the revenue kicks in. But some things including freight insurance are indispensable. Legal trouble is the last thing you want early on in your new business. Follow the minimum compliance and more to win your customer's trust.

4. Inaccurate estimation of weight/size

An overloaded ship is in danger of capsizing. For forwarders, accurate e-Verified Gross Mass (VGM) allows smooth clearance. Freight management software like Logi-Sys auto-captures details of e-VGM, and weighments by the container number. Reduced repeated data entry of details like weight, HS Code, etc., is a major cause of errors. With software, you have a single database for all departments which means you enter data just once, eliminating data entry errors.

5. Delaying a freight claim

Without a proper system to include notes of incidents of cargo damage, you may not be able to make timely claims losing valuable revenue. Logi-Sys provides an easy way to attach all documents and invoices, against a shipment for easy claims.

6. Classifying freight incorrectly

By correctly categorizing freight, you avoid delays due to re-classification and re-weighs. The root cause of inaccuracies is manual data entry. An automated system eliminates data entry prevention and troubles with customs inspection and other regulatory bodies.

7. Errors in documentation and invoices

Gaps, misses and mistakes in your billing processes can hurt your bottom line. In one of the surveys, 11% of customers never even received the invoice in the first place. Automated your processes with features like workflow management where your system auto-sends reminders for documents, reports, and invoices.

8. Choosing a sub-par software

That cloud-based freight ERP is a necessity only for larger players, is a myth. Small and medium forwarders can compete to capture a larger size of customer base with the right tools and freight software. Implementing multiple software to manage each function leads to disconnected systems. Without standardized data across software, generating reports gets complex. Adopt an integrated system that helps manage all operations including customs, accounts, sales, transport, and warehouse on a single platform.

9. No complete visibility of shipment

47% of shippers say shipment visibility is crucial to evaluate a freight forwarder's offering. While visibility is important for you, it helps to keep your customer assured of their shipment's safe and timely delivery. With increased transparency, you're in control of your company from the start.

Takeaway

Learning from repeated mistakes saves you from falling into the same pit as the faulters. Keep an eye on trends and opportunities for your organization's steady growth. Despite knowing how important technology is to improve a company's performance and agility, forwarders are reluctant to invest in it. Solutions like Logi-Sys have helped over a thousand forwarders manage their air, land, and sea freight as well as customs clearance, accounting, and much more, with just any web-based browser. At times, you may not be able to avoid these mistakes. But if your teams are willing to learn and adapt with an open mindset, your company is on the right path to success.