I used to have a long list of advice for people when it came to selecting a freight forwarder, but over the years, my advice has boiled down to this:
A freight forwarder is only as good as the people who work for them.
Based on the saleperson's visit, you can't tell who is going to do a good job. The only way to see if a forwarder fits your needs is to do a shipment with them.
Ideally, a small, not-so-important shipment and then you evaluate them on their service.
Does the ocean or air person call you back promptly?
Are they organized (i.e. they don't lose your paperwork or go on vacation without shipping your container)?
Is their paperwork correct?
Do they actually do what you ask and need them to do?
Are they proactive and able to problem solve? If there is a problem, do they come to the table with solutions?
Or are they burned out? Grouchy on the phone? Unresponsive?
Forwarding is a rough and tumble business with a high turnover rate. Freight salespeople and managers have little-to-none job specific training and the pay is low with long hours (How often do you work until midnight? Forwarders do it all the time). Freight Forwarders don't always develop or support their staff as they should, you either learn on the job, or you get out of the industry. The prevailing management style is punitive, which means lying is not uncommon. Weaseling is almost a given. Backstabbing aims to kill. In short, forwarding is a very small, rumor-filled world and extreme functional dysfunction is the norm.
It doesn't matter if a forwarder is ISO certified with a multinational network, because, if their staff is difficult to work with, that international network or shiny ISO certificate isn't going to do you one lick of good. It's theory versus reality. Promise versus practice. You can't evaluate a forwarder on their credentials or sales visit alone. You have to see them in action to know whether or not they can deliver on their promises.
But what about cost? Shouldn't a forwarder be chosen based on cost?
Yes.
And no.
It depends.
There is more than the cost of the freight involved here. There is the cost of the process, of the chain of events that must occur for freight to arrive successfully overseas. If one of those links in the chain fail at any point in the transport of your goods, it will cost you, sometimes much more than the freight cost. I've witnessed some spectacular shipping messes where going with the cheapest freight rate cost a company over a $100,000 in lost sales. All for a $300 savings on the container rate.
While it is always prudent to ask for freight quotes, freight cost alone should not be your only decision-making tool.
The best forwarder fits your needs at a competitive price. Not the cheapest price, but not the most expensive either. The best price really has nothing to do with money. My definition of best price is the dollar amount that gets the freight to the customer on time, with accurate documents, and without any unnecessary delays or fines. The best shipments are always the ones where the freight arrives.
Sometimes companies only look at the cost of a container and fail to incorporate the 'soft' costs of the international shipping. A few of my international buddies are frustrated right now with their management who, having no international expertise, have selected forwarders based on container cost alone. Management is looking at the bottom line and not realizing that poor service is costing them on the back end and eating up any savings they may have negotiated on the front end.
Cheap freight becomes very expensive if there is no service to back up the cheap rate. Unfortunately, that is a truth most companies learn the hard way.
Okay so now that you know cheaper isn't better and that service is more important than price, how do you find a forwarder?
This should get you started--Top Ten Forwarders of 2006
You should also attend IFA events where you can met many forwarders in a social setting and get a feel for who you might work well with.
Even if you think you've found your freight 'soulmate,' it's a good idea to continue to meet with other forwarders and keep the channels of communication open. Forwarder burnout is a very real danger to your supply chain. If your key contact crashes and burns, you're freight is going to be s.o.l. So it's always good to have a backup plan.
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