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Freight Forwarders – Which of These 5 Problems Is Costing You Revenue?

mario      0

Freight Forwarders – Which of These 5 Problems Is Costing You Revenue?

As a freight forwarder or any transportation intermediary, you know the logistics services marketplace is competitive and very price driven. This means any opportunity to improve your margins is a good thing. A good thing to build customer relationship and to generate revenue to reinvest. You also understand everything in logistics is urgent and that the instructions coming from the client could be off with a few inches or centimeters. You might not face any of these problems now, but – you are probably very familiar with at least a few. Just tackle any of below problems can provide a massive boost in productivity to your operations. 

Problem #1: Taking Too Long To Quote or Not Quote

You get a request for pricing regarding a multi-modal freight movement and they need it yesterday. Without a process to access and calculate all in rates it can take hours or days to get back to the customer.

Chances are in that time the customer has spoken to other freight forwarders and received at least a few competitor quotes. Many times it is the first to quote that wins the business. Even if you are getting an RFQ from a fellow competitor agent, don’t be a bully and provide them with a quote, sure you are competing and perhaps it will turn out to be nothing but it is always nothing unless you make it something. 

Problem #2: Freight Rates Aren’t Current

Speaking of quoting customers, to do that correctly you need accurate rate information. Yet in logistics you’re usually dealing with tariffs that are already obsolete. That’s not because most logistics people are lazy, but because freight rates (especially ocean tariffs) change every few weeks or months. This makes calculating freight costs accurately impossible if you don’t have the latest rates available. 

Problem #3: Can’t Balance Cost And Service

The lowest cost options do not always lead to the best solution. A longer transit is probably cheaper with a transload port in between increasing risk. A process to optimize cost and service when quoting customers is crucial to putting your best foot forward and winning more business. Always think about the client first. 

Problem #4: No Centralized System For Managing Freight Rates

If you have more than one location that functions as separate office from a rate and contract management standpoint, there is efficiency being lost.

This is because you are probably managing separate carrier tariffs and operating under different procedures – and in many cases, doing the same work twice for no gain. A centrally managed, single software to handle freight rate management will give you better control and consistency. Combining the backoffice and in source tasks would slim down expenses and allow you to reduce costs and increase business.

Problem #5: Losing Money On Invoice Errors

Shipping generates a lot of invoices – and sometimes complicated ones. It’s a necessary portion of the business, but never an enjoyable one.

There are regular overcharges and other errors that are common on freight invoices. But unless you’re investing staff time into reviewing them, or have a system that automatically checks for errors, you might as well have a hole in your pocket.

 

So, which of these 5 problems are you going to tackle? Just remember, you don’t have to invent the wheel again, there are plenty of agencies and professionals able to provide a solution for a fair price. Always keep in mind, shall I do it or shall I ask someone else to do it. That is management.

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