Back in the late 1990’s I attended a series of Export Club Breakfasts hosted by East Lancashire Chamber of Commerce (great bacon butties!), whose offices were conveniently located opposite where I worked. A key northwest freight forwarder attended almost every event, and I had used their freight forwarding services in a previous life shipping machines to North America. Although this time around their business profile did not match what I was then looking for, I remember thinking that some logistics companies are good at some things, experienced in shipping to specific regions of the world, but none of them can do everything. And so it set in motion a train of thought and action to find the right companies to ship our floorcovering products across the length and breadth of Europe. And I have since recommended that particular forwarder to a number of my clients.
During the process, I contacted nearly 50 freight forwarders, all of whom offered a range of services into Ireland and mainland Europe, which was my key focus. I was very clear about what I wanted to achieve: competitive rates both DDP and FCA, based on an up to date weights and dimensions chart and quantity breaks; genuine quick service, both in terms of collection and delivery times and in response times to our frequent needs; minimal transhipment between the forwarders and their overseas partners; and a list of where they offered direct services and where they relied on partner companies. I received 23 replies, and shortlisted 12 to go and visit so that I could fully understand the services they could provide for us.
It was an enlightening and productive exercise that resulted in the selection of five freight forwarders: a prime forwarder to carry product throughout Germanic Europe, to transport goods to Turkey via Trieste, and specifically to ship to the growing number of EU outlets of a global car rental company; a second to handle all shipments to France; a third for Spain; a fourth to service the market in the Republic of Ireland; and finally a specialist forwarder based in the east of Germany whose experience was critical to for shipping goods efficiently into Russia. In learning about the strengths and weaknesses of each company, we were able to achieve almost all of our objectives, and to be sure of the cost of the transport element to each shipment. Our forwarders became longstanding partners, and everybody won from the arrangement.
The company that we worked with to ship goods to Turkey partnered a Turkish freight forwarder who owned a share in the Trieste to Istanbul ferry. This mean that our goods were shipped straight to Italy to meet the sailings to Istanbul, which at the time cut the journey time by three days from the standard ten day overland journey time via Romania. Both parties were very active in trying to ensure that they handled our shipments efficiently and two of their key Manchester staff had long experience in dealing with shipments to and from Turkey. We met in Manchester and Istanbul for annual reviews, and we rarely had any issues in shipping goods to what was then our most important export market.
The arrangement between us, and the price points that we agreed, enabled us to provide to the global car hire company with an annually reviewed fixed euro price for the supply and shipment of our products to their multiple sites across Germany, into France, and Switzerland, and also provided a platform on which we could help them to expand their business around Europe.
The company in eastern Germany had deep experience of the various border issues, and at that time this was vital in ensuring the swift and safe shipment of goods into Russia, and they also had a regular presence here in the UK. The delays that could occur at the Russian border for companies whose documents were not up to standard, with the correct certifications, and in the right format could be quite lengthy, so it was important to work with a ‘known’ forwarder who would cut through all that. The French, Spanish, and Irish forwarders were by comparison a breeze!
Looking back now, I realise that the whole selection process was probably too laborious and long-winded. However it was worth it and had a number of positive knock-on effects: our warehouse staff got to know schedules of the truck drivers, and orders were invariably ready for immediate loading; the documentary process was seamless, even when we were dealing with orders against Letters of Credit; transit times were as good as we could hope to achieve; information on local delivery conditions was advised to the drivers so that the right size of truck was used when access was difficult or restricted; we got a good deal, our shippers got a good deal and regular business, and our prices remained sharply competitive.
So why not include as part of your market entry plan an appraisal of the costs and efficiencies of freight forwarders who service your selected markets?