Let’s face it, changing freight forwarders can be a real hassle. It takes time and effort to find a good one and training them on your company’s procedures and service requirements is like house-breaking a new puppy. Who has time for it? Moreover, choose poorly and it can have a huge negative impact your company and your future career prospects.
In this article, we take a quick look at the top 10 warning signs that may suggest that it is time to take the plunge and find a new logistics partner.
As with many vendors, relationships were formed years ago, you know all of their key personnel, who to call for favors and how to reach someone in management on Sunday at 11:00pm when that big shipment you desperately need didn’t show up overseas when it was supposed to. That’s hard to give up. Consequently, shippers endure shoddy customer service, non-competitive pricing and repeated service failures rather than risk change. It’s a common blunder.
So when is it time to pull the trigger and make a switch? Here’s a few tell-tale signs:
1. Customer Service Lacking: I have always preached to our customer service team that they are the only thing that sets us apart front the competition. We don’t know about any secret airlines that no other forwarder has access to, or truck carriers that nobody else has discovered yet. If your current forwarder isn’t giving you the level of professionalism and personalized service that you want, don’t stand for it. Freight forwarding is a customer service based business built on personal relationships. Don’t settle for a forwarder that is unprofessional or indifferent to your business.
2. Your Business Has Changed: Business grow. Needs evolve. If you have recently expanded your market or product offerings, you may have outgrown the capabilities of your local forwarder. Not all forwarders are alike. Some specialize in air only. Some are exclusively domestic. Others are primarily truck brokers. Make sure that you have partnered with a full-service logistics company that provides a complete range of services that matches your company’s growth plans.
3. Antiquated Technology: The world of business information systems has changed dramatically in the past 10 years and like most industries, the freight forwarding industry has changed with it. If your forwarder has a stale, 1990’s era Web site, or worse, no Web site at all, it may be time to consider a change. It may be a case of insufficient capitalization, or lack of vision by management. In either case, online tracking and proof of delivery are now considered mandatory by most shippers. In addition, most tech savvy forwarders offer online quote requests, electronic proof of deliver (POD’s) and electronic billing. If you are have to call your forwarder to request a fax of a delivery receipt, you need to evaluate your options.
4. Uncompetitive Rates: Every supplier and business partner has their strengths and weaknesses. However, those rates that were great three years ago, may no longer be competitive in a rapidly changing market. If your forwarder is struggling to make a profit and has needed to ratchet up rates, or worse, is just taking your business for granted, you may not be getting the rates you deserve. If it has been more than a year since you got a competitive bid, you need to do so.
5. Financial Stress: Many forwarders struggled to survive The Great Recession and some of them didn’t make it. Not all of the remaining players are in great shape. As a key business partner, make sure that your forwarder is on solid financial footing. Signs of financial stress may include shortened credit terms, or a sudden, increased demand for prepayment of freight. If your forwarder’s bank account is on empty, that can be a big problem.
6. Communication Difficulties: In addition to the use of current technology, clear and timely communication is something you should expect. If your current forwarder’s customer service department presents a language barrier, either here in the United States or when dealing within an overseas branch, or if they simply possess poor communication skills, you may want to consider your options. Delivering a high quality logistics services is all about attention to detail and effective communication (not to mention timely delivery).
7. High Employee Turnover: Are you on your third new account representative in 6 months? Do you even have an account representative? Do the customer service staff members seem to change faster than waiters at a local restaurant? Maybe it’s just a poor company culture or lousy working conditions. Perhaps the boss is an ogre. Or it could be a sign of financial turmoil and the crew is abandoning ship. Regardless of the reason, you want a stable partner with long-term employees who know and care about your company and it’s unique service requirements. High employee turnover is never a good sign.
8. Recently Acquired: The freight forwarding industry has undergone a consolidation in recent years. If your local or regionally based forwarder has recently been acquired by a larger firm, proceed with caution. You can quickly go from being a big fish in a small pond, to a guppy in a large ocean, especially if the new parent corporation is based half-way around the globe. You may get lucky and experience a new range of service offerings and improved customer service. Then again, you may not. You should evaluate carefully.
9. Insurance Coverage Lacking: Insurance is a huge issue these days in the transportation industry. Especially in the ground transportation segment of business. You need to make certain that your forwarder has adequate cargo insurance, bonding and is ready and willing to name you as an additional insured on their policies. If they cannot or will not, it’s a huge red flag that warrants very close scrutiny.
10. Recurring Service Problems: This may seem like re-stating the obvious. However, as mentioned above, many shippers will repeatedly endure service failures and “my dog ate my homework” stories rather than change. Sure, every forwarder is bound to have a problem with a shipment occasionally. There are simply too many variables beyond control: weather, customs holds, strikes, etc. However, it it has become the rule and not the exception, you need to make a switch. Fast.
For more suggestions on ways to smooth the transition, please contact us below for more information.
Editors Note: This article originally appeared on September 9, 2013.