Shipper’s Dilemma: One Freight Forwarder or Multiple?

 Several shippers depend on stock forwarders as key building elements in generating and executing a logistics system. Some choose single forwarders or 3PLs (Third Party Logistics) to establish and keep their supply chains. For others though, it’s a multiple forwarder option. So which option is best for your company?

By John Lipscomb, President of www.nationalshipperlist.com

CHOOSING A SINGLE FORWARDER

Advantages of using a single forwarder include:

The benefits of choosing a single forwarder feature:

 

-Better accountability. Errors and mishaps can be identified more easily when they come from a single provider. Above all, any mistakes can be fixed more quickly and with minimal finger-pointing.

 

-Focused freight ordering. Thanks to one forwarder operating all the shipper’s cargo load, agreement targets can be fulfilled with ease. Price savings are also amplified when the forwarder’s chosen air and ocean shippers are used.

 

-Applied technological means. Orchestrating technological tools between a single forwarder and a shipper is a quicker, less challenging, and less costly process compared to the integration of several systems into a shipper’s IT system activity.

 

-Single service levels. Single service standards differ from one forwarder to another. When using a single source, the shipper will be able to get a consistent service quality throughout its supply chains.

 

-Concentrated payments. Handling seller payments, shifting charges, and fixing billing errors is much easier when working with a single forwarder rather than many, especially if global quotes are a part of the process.

THE MORE THE BETTER

Advantages of using two or more forwarders include:

The perks of working with two or more forwarders include:

 

-Vaster experience and insights. Single forwarders sometimes don’t have all the answers. However, one integrator may possess a higher knowledge of local providers and a better grasp of a region’s climate conditions. Moreover, an extra forwarder on the shipper’s logistic department may have closer and long-term bonds with local administrations of air forwarders and shipping routes.

 

-Better serving of shipper’s varied needs. When it comes to shipper companies, especially multinational ones, splitting operating units is a common practice. All these units demand special knowledge and skills in carrying their stock. For instance, one department may require sufficient heavyweight or bulk shipping. Another division may have to employ intermodal transfer for most of its stock. Thanks to a multi-agent approach, the shipper can utilize the forwarder’s special strengths.

 

-Generating healthy competition among forwarders. Shippers with several integrators in their logistics department can utilize extra services and benefit from price consolidations.

 

-Decreasing vulnerability. When multiple forwarders are handling a cargo shipment the shippers have a back-up solution in case shipment doesn’t go as expected.

 

-Wider regional coverage. Even big forwarding companies will struggle to be available in multiple locations. They have a limited number of outlets across an area. When two or more brokers are involved, the shipper’s geographical coverage stretches. There is also less reliance on independent brokers who may offer services of dubious quality.

CHOOSING THE RIGHT MATCH

Before shippers develop a logistics team, they should know exactly what their needs are. Do they want a mere transfer from point X to point Y taken over by one forwarder? Or do they need a consolidated logistics package from stock management to customs mediator skills requiring several forwarders? Identifying these demands will help shippers develop a team that fits them.