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Recession Doesn’t Spare Brand Owners’ Shipping Costs

By: Simon Kaye, Jaguar Freight Services
Posted: February 2, 2010, from the February 2010 issue of GCI Magazine.

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Given today’s tough business conditions, choosing the right forwarder is more important than ever. Freight forwarders can often find creative solutions that reduce logistics costs, with the insight to do the advanced planning that takes best advantage of their cutting-edge electronic tracking and documentation systems. Such tools are an immense advantage for budgeting planning with regard to volumes, capacities, equipment and fuel surcharges. The best freight forwarders can pinpoint a shipment’s location at any time or point in the logistics chain. This is an immense cost-saving advantage for both the producer and the shipper. However, technology alone is not the only basis for choosing a freight forwarder that can help reduce logistics costs. To make a good decision, look for certain standards in any freight forwarder you select.

How to Choose the Right Freight Forwarder

Customer service emphasis—From a door to door service backed by customs clearance, storage and distribution to a straight one-off transaction, a freight forwarder should understand what you want so that your business gets what it needs. That requires specific levels of tailored, flexible service that can adapt as customer specifications evolve. The ultimate objective is efficiency of cost and time: minimum downtime and as few obstacles to delivery as possible, complemented by maximum uptime as your freight gets to where you need it to be within the expected time-frame.

Industry understanding—A freight forwarder should be intimately familiar with the customs rules and regulations of every country through which freight will pass, in addition to understanding the associated service parameters and costs. The government agencies responsible for customs clearance and security issues are much more sympathetic to the goals and aims of a broadly backed organization with the personal relationships that are essential to understanding foreign business culture. The forwarder’s knowledge of Incoterms (the standard international shipping terms) and new developments such as the Rotterdam Rules (which describes the rights and obligations involved in the maritime carriage of goods, www.rotterdamrules2009.com) are equally important. Developed through the United Nations and already endorsed by at least 20 major countries (at the time of writing), the rules allow for individual, confidential contracts that cover the reality of door-to-door multimodal shipping. The new rules clearly document responsibility and liability during the whole transport process—but they are still complex, and freight forwarders are best positioned to apply them.

Global capabilities—The best freight forwarders are an integral physical part of the global supply chain. They will have offices in centers of commerce, such as New York, London and Hong Kong. Equally important, they will have a comprehensive global network of agents who are chosen on the strength of their expertise, their own rigorous professional standards and their enthusiasm for customer service. It is essential that the freight forwarder have a multilingual staff and a respect for and insight into other cultures that helps deliver better service.

Professional certification—A freight forwarder should meet the international process quality certification standards in its regions and as appropriate. It should also be approved to participate in cargo security programs such as the Department of Homeland Security’s Customs-Trade Partnership Against Terrorism (C-TPAT) for global imports from any country, and the Transportation Safety Administration’s Certified Cargo Screening Program (CCSP) for air cargo. A good indication of professional standing is membership in leading industry associations worldwide, such as the Council of Supply Chain Management Professionals and country specific freight associations.

Making the Difference