Logistics Uncategorized

Age-Old Freight Forwarding Partnerships Have Gone Stale.

Many shippers rely on forwarders as key building blocks in creating and implementing a logistics program. Some use a single forwarder or third-party logistics provider to forge and maintain supply chain links. Others choose a multi-forwarder approach. Which is best for your team? 

THE MORE THE MERRIER

Advantages of using two or more forwarders include:

  • Greater experience and knowledge. No single forwarder has all the answers. One consolidator may have superior knowledge of local suppliers, and a better feel for an area’s business climate. Another forwarder on the shipper’s logistics team may have close and long-standing relationships with local management at air carriers and shipping lines.
  • Meeting the shipper’s diverse needs. Within shipper organizations, particularly those that are multi-national, separate operating units are common. These units require particular knowledge and experience in moving their products. One division may need substantial heavyweight or breakbulk shipping. Another may use intermodal transport for most of its cargo. With a multi-agent approach, the shipper benefits from forwarders’ specific skills.
  • Creating competition among forwarders. Shippers with multiple consolidators on their logistics team can exert leverage for additional services and price concessions.
  • Reducing vulnerability. With many forwarders handling its cargo, the shipper has back-up if one is not meeting planned logistics objectives.
  • Greater geographical coverage. Even the largest forwarders can’t be in all places. They have a finite number of offices. With two or more agents, the shipper’s local coverage expands. There is less need for independent agents who may be of varying quality.

GETTING THE RIGHT FIT

Before building a logistics team, shippers should know exactly what they need. Do they want a simple transaction from Point A to Point B handled by a single forwarder? Or do they need a total logistics package from inventory control to customs brokerage capabilities requiring multiple forwarders? Defining these requirements will help shippers build a team that fits.

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