I had the opportunity to meet a business owner recently and we began to talk about the differences between LTL Carriers and 3PL’s as well as Freight Forwarders. I asked him which company he had had the best experiences with. He replied, “Freight forwarders have been easier for me to deal with, even though I use all three at work.” He gave 7 reasons why Freight Forwarders were a better fit for his supply chain.
Flexibility
Freight Forwarders provide a service using an Agent network. Because of their bad reputation, many people cringe when the term “agent” is used in relation to logistics. Customers believe that using an Agent network increases the chance of products being lost, damaged or stolen. This is false. The Agent concept is not new. It has been around since the beginning. Every carrier has some kind of relationship with agents. Even the largest carriers like UPS and Fedex have a network of agents in certain parts of the country. The bonds they have with their agents and their communication are what truly distinguish companies. If you look at the “good” forwarders, you will see that they have strong, solid relationships with their agents. Sometimes, they even do better than if they were working internally within their company. This is how you can understand that the agents who survive are those who provide outstanding service to their carrier partners. They will get more business if they do a good job. They want to impress and they want to be precise in pickups and deliveries. However, it is the responsibility of the carrier to ensure that their agents are performing well, accountable, and reliable.
Management
Customers often feel a loss of control when dealing with LTL carriers or 3PLs. It often takes a congressman to retrieve and redeliver a shipment that has gone missing. Good Forwarders have the ability to use their network to find, reconsign and redeliver the shipment to the right address almost every time. F.F. is a preferred method of delivery for many clients. This added benefit is why many clients use F.F. A Freight Forwarder can “Quarterback”, which means you can have your shipments all the way. LTL companies are too busy with many processes and hubs. This makes it difficult for them to offer the same flexibility and manageability as a Freight Forwarder. Customers often find this out the hard-way.
Versatility
There are many options! Options! There are many options! Customers are looking for viable options in today’s economic climate. This allows them to retain control, reduce costs and improve efficiency in their supply chains. Look at the services they offer and how they relate to your business. Good forwarders can be used to fulfill the primary shipping role, or as an additional asset when needed. Your business will be able to adapt faster and respond to customer demands as they change.
Versatility
Many companies claim that they are a One-Stop Shop. But if you ask enough questions, you can find out if this is actually true. Are they able to track and trace in real-time? International Capabilities in Warehousing & Distribution Capabilities for reporting? These are things that can make a difference in the success of your business. These are a great way to help customers grow their businesses with minimal financial outlay.
Vested Interest in Your Company
A great carrier can be an extension of your company by thinking about ways you can improve your supply chains more than you think. Business companies often spend 90% of their time searching for the lowest cost company, or the one that adds consistent and immediate value to their supply chains.
Although all carriers want to achieve this goal, not all do. It takes will to be the best possible carrier and the desire to help customers beyond the single shipment. A good freight forwarder can cut through the “junk” to reach the core of clients’ goals. Their main concern is to make your business run more smoothly. This doesn’t necessarily mean that they are the most affordable carrier, but it does often refer to being able look at the company’s logistic setup and determine how they can improve efficiency and reduce costs.
Cost Savings
As I said in the previous paragraph, a good freight forwarder will strive to save its customers money. However, it is not always possible to give the customer dirt cheap rates. A top forwarder will tell you that their rates are fair to moderate, in fact. It is often necessary to use more resources and increase costs on the front end in order to solve a problem. This will allow for expedited transit, customer satisfaction, and greater efficiency. A company shipping from California might want to be able to compete with their east coast counterparts. This could mean that they need to request the use of a Chicago warehouse and distribution center. This resource will allow for more control and faster transit. It will also give the Cali Company a competitive edge and, as I said, increase customer loyalty.
Quick Thinking
One freight forwarder that I spoke to showed me how being curious and adding value to a customer was a way to show him. UPS ground shipping product to the customer weighed in at 50 lbs. For 10 boxes, the cumulative weight is 500 lbs. Due to the fame and name recognition of the brown boys, many companies would have fled if they had come across this. The owner realized that he could put together a strong program for his client based upon the 500-pound cumulative rate. UPS rates the shipment per box. He was able to save 30% on the customer’s shipments and have them arrive much quicker.
In this age of technology, the most important thing a business should understand is its own “business needs …”. If they can understand the time sensitivity of their product, the market, and the industry needs, they will be able choose the right company to fulfill their logistical requirements.
Earl White is a National Manager at One Stop Logistics, a Third Party Logistics company, based in Watsonville, Ca. His experience in sales spans over 15 years. He works with many sales representatives to help them get better footing in the difficult practice of working with clients. He loves being able pass on the many skills he learned from top salesmen in the industry.
