Freight Forwarders - Asia

Bunker and other surcharges: a poison for the freight industry

With the recent emergency bunker surcharge that has been raised by carriers, to the great disappointment of Asian shippers, the surcharges issue strikes again.

Surcharges are really hampering the freight industry - in no other industry (at least I don't think so) would you find such arbitrary, un-predictable, un-justified price changes.

At the end of the day, what matters to shippers worldwide is how much they will pay, all-in, for their shipment from A to B. It seems carriers forget that, or at least believe that since "every one is doing it" in their industry, they should carry on with these shady business practices.

Freight forwarders then find themselves caught between the bullet and the target, with on one hand customers asking for long term all-in tariffs, and on the other hand carriers juggling with price changes to restore their damaged margins.

The carrier that will have the courage (or intelligence) one day of cutting off the surcharges practice, and providing all-in prices (even if it includes higher margins to cover for risks that are inherent to the shipping industry) will, in my opinion, make a strike...

Could freight forwarding be more straight forward ?

When dealing with freight rates & quotes, you soon realize that there are not 2 freight forwarders who quote the same way.

Some give ballpark prices, some list every costs to the detail, some include insurance by default, some others don't , etc.

The question is: for a professional importer, when it comes to building up a budget for an import, does it really matter if the US $7 consignment fee is or isn't included ? Importers are often dealing with import projects worth x*thousand dollars - so what they really need is a quick estimation, and not wait 3 days because the forwarder needs to confirm if the documents fee is $2 per BL or $3...

Response times, ability to quickly provide & update freight quotes - these should be the real challenges for freight forwarders, and not 100% accuracy; serious importers will never argue if the final bill is actually 1 or 2% more expensive than quoted - but they will argue if they loose a business because they were not able to quote fast enough.

Why are freight forwarders disregarded by B2B online platforms ?

You can check by yourself : all major Asian sourcing websites (Alibaba, Made-in-China, Globalsources ...) have very little space, if any, dedicated to services linked to sourcing in general, and freight forwarding in particular.

This means that if you are an importer, looking for sources in China or else, you will very easily find resources, categories, search engines for PRODUCTS, but hardly for SERVICES.

Why is that ? To get an import project right, finding the product is only maybe half of the job ! Then you have all the side services that are needed (quality control, freight & duties management...) - so why should B2B websites focus quasi exclusively on referencing thousands of products suppliers ?

It's time to get professional online platforms referencing services suppliers in the import industry !

DHL, Fedex, UPS, TNT struggle

Interesting piece in ProcurementAsia, on how the 4 3PLs have struggled recently, and how DHL and UPS are relatively better off than their 2 other friends.

"This implies the shifting geographic focus to emerging markets like South America and the BRIC countries, and improving their road networks in order to cater for customers requiring alternative transport modes." says the article.

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Freight rates from China on the rise

Several releases in the past days show that the freight rates from China are on the rise.
This could be expected considering the bottom they had reached, however it's interesting to see all shipping companies announcing raises at the same time - where is the competition ?

- China shipping
- All TSA members and TSA Members (CMA-CGM, Hyundai, Cosco, etc.)
- Hanjin (though this one is for transatlantic)

Why freight forwarders should go online

Top 3 reasons why international freight forwarders should hunt clients online, rather than paying sales reps :

1. margins are low in the freight forwarding business; Forwarders need volumes - where can you reach the greatest number of buyers, if not on internet ? Putting details on an online freight quote service might bring dozens of visits every day - how many sales guys would you need to get the same results ? Get your ROI straight, spending 1 hour everyweek maintaining your online accounts will definitely be more profitable than having your 10 sales reps wandering around throwing baits.

2. international buyers are used to source online on B2B platforms (globalsources.com, made-in-china.com, etc.). If an importer is searching for freight costs over the internet, you'd better be there...

3. don't be the last one to do it ! All studies show a steadily increasing trend in B2B online marketing expenses. Establish your presence online, while there is still room for your company - don't wait for your competitors to own the space !

Going online, registering and using the specialized freight platform is definitely the most relevant marketing strategy for Forwarders !

How to find new business for Forwarders

This is a tricky one - freight forwarding is a relatively traditional industry, in that a lot of forwarders we know rely mostly for their sales prospection on physical sales force, with cold-calling and face-to-face meetings.
Although there is definitely a great room for such marketing strategies in a B2B environment, we believe it is time now for Freight Forwarders to go online !

Many other B2B industries have put internet marketing at the heart of their development for a long time now - see Chinese manufacturers chasing clients on Alibaba.com.

The freight forwarding industry, which greatly relies on volumes considering the low margins taken on shipments, should definitely be bolder on internet. Internet, by definition, is THE media that allows you to broadcast your messages to the widest audience. So instead of having your sales guys calling shippers in your region, why not simply post your freight tariffs online, and catch as many leads as you can ?

A few services are out there already, AsiaCalculator.com tries to be the simplest, most effective one - allowing Freight Forwarders to easily upload their freight tariffs and connect with their clients.

We believe most forwarders don't need a complicated software, with painful setup, that will disrupt their work habits - a simple platform, taking 20 minutes of their time every now and then, and bringing them new business, is what they need !

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First post : start of a recovery for Asian freight ?

From the Center for AsiaPacific Aviation :

HACTL stated cargo throughput is “generally a good indicator of the economy” and while the first half of 2009 has been difficult, “it is delightful to observe the relatively stabilised tonnage performance over the past few months”. AAT stated, “the global economic recession continues, however, the total tonnage has shown some improvements, hopefully it’s a sign that we have already seen the worst."

While there is also mention of Cathay Pacific stating that air freight has probably "bottomed out".

Is the worse behind us on this freight crisis ?