What Do Successful Freight Forwarders Do Differently?
In 2015, freight forwarding companies across the world experienced shrinkage in business to the tune of 1.6%. Estimates also show that there is a slowing down of growth every year in sea and air freight. Most shipping companies are said to be facing their eighth consecutive year of economic crisis.
Pressures freight forwarders face:
According to a report by Drewry, the expenditure incurred by freight forwarders in terms of managing carrier rates amounts to $500 million annually. Close to one million dollars is spent by the biggest freight forwarders to manage labor costs alone.
Ever increasing competition and market pressures are shaping the coping strategies adopted by most freight forwarders to stay in the game. Technology innovations and demands by the consumer to provide real time information are adding to the pressures.
In a survey, a majority of freight forwarders believed these pressures would further intensify in the coming days while 30% believed they would remain at the current level.
Despite these pressures, some high performing freight forwarders registered a 13.4% growth rate while returning 7.5% to shareholders in the three years preceding 2016.
Best practices of successful freight forwarders:
Here are some of the factors that helped these freight forwarders succeed:
Acquisitions: Successful freight forwarders ensured their growth by making intelligent acquisitions across the globe. By increasing presence in countries like China, Mexico, India and Brazil, these companies leveraged the highly profitable regions.
Flexibility: Given the market fluctuations and pressures, agility and speed matter the most to beat the competition. Top performing freight forwarders are flexible enough to deliver the right service to the customers at the right time. The market leaders have opened new lines and links to particular geographic locations as well as globally.
Expertise: Top performing companies are invested in acquiring relevant expertise in the industry that goes beyond traditional solutions. The successful freight companies are also better collaborators and up to date with the fast evolving technology. Transparency and real time information are the key demands of the customers in the logistics industry. The top performers have leveraged IT to provide complete visibility across the entire logistics chain.
Automation: High performing freight forwarders are aware of the importance of achieving operational efficiency and increasing productivity. The companies have made use of strategies such as increasing transport capacity, use of shared services and automation.
Automation is the buzz word in logistics with many companies investing in a big way in artificial intelligence and process automation. Automation improves profit margins by saving time and labor costs.
Now that you know some of the many aspects that classify a freight forwarding business as successful, it is time to start thinking what you can do to improve your business and make it even more successful.
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