How To Choose a Freight Forwarder
In the market for a new freight forwarder? This article from logisticsmgmt.com provides several suggestions to help assist in the decision process.
- Identify potential partner(s)
- Evaluate feasibility and quantify potential benefit
- Develop capability requirements
- Produce a Request for Information (RFI) or Request for Proposal (RFP)
- Use the responses to narrow down the list of potential partners
- Assess and evaluate potential partners’ capabilities, experience, and amenability to risk-sharing
- Develop a short list of the best providers
- Negotiate
- Select partner(s)
- Develop an implementation plan and commence implementation.
I noticed that the above list did not mention “choose the least expensive forwarder” as a suggestion. I would be leery of a forwarder who provides the lowest rates across all lane segments because they either do not have a complete understanding of the service requirements or are just looking to gain market share. I’ve seen RFQ situations where the incumbent took business away from my company because of low rates only to see them fail miserably on the service end and request rate increases 3 months into the contract.
The best advice I could give would be to perform a thorough assessment of the potential providers capabilities and look for areas where they can provide added value. Also determine if the forwarder’s strengths match your supply chain needs. Just because a company proclaims to be the largest does not necessarily make them the best fit for your needs.
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