Independent freight forwarders build better relationships

| November 6, 2013

Freight forwarding is an important part of many businesses. First 5000 member Ronald Spahr, managing director of International Cargo Express, explains how independent operators work differently to the large multinationals.

It’s no secret that business is as much about relationships as trade and finance. Building relationships with clients is hugely important, no matter what sector you operate in, but some businesses have an advantage over others.

When it comes to freight forwarding, independent operators tend to be more successful at building relationships than large multinationals.

International Cargo Express was founded as a small independent service provider, and though we have clearly grown over the last 25 years, we are still independent. Our success has partly been due to our ability to build and maintain relationships.

Multinational freight forwarders may have grown for similar reasons, but are now invariably too large to be able to offer the same relationship to their clients they once did. For importers or exporters looking for a freight forwarder, it is important to look at the respective attributes of multinational and small to medium-sized freight forwarders before choosing between then.

Attributes of multinationals
Multinational freight forwarders seem to have everything – good infrastructure, beautifully designed brochures, an extensive global presence and apparent financial stability.

But on the down side, they also have inflexible systems that their customers must fit into, making them incapable of dealing with individual needs or the unexpected.

They also typically have a high staff turnover, which results in poor service delivery. This is because their staff has no direct engagement either with the customer or with the company, which results in poor passion for the job, the company and the customers.

The fact is that large organisations link with customers through their processes rather than relationships. The management is hierarchic and, in most cases, decision-making processes are long and drawn out. Of course, some of these attributes supersede the negatives and suit certain customers.

Attributes of independent freight forwarders
The key difference between multinationals and small to medium enterprises is that the latter are mostly owner run. They could be companies of between 6 and 100 hundred staff, and could have an annual turnover of between $10 million and $100 million.

These smaller freight forwarders are generally flat managed, with decision-making processes that operate quickly and efficiently, but people who are local and are therefore in touch with their customers.

In terms of personnel, their staff is generally faithful, with very little staff changes, resulting in better service delivery to customers. What is more, because there is no centralisation of back office functions, customers always have a chance to speak to the person who actually provides the services. They are approachable and in the minds of importers and exporters, this is a huge plus.

Problem of critical mass
Perhaps the clearest difference between multinational and small or medium-sized freight forwarders is the issue of what we call ‘critical mass’. Their delivery systems have to operate like clockwork, so they really dislike any deviation from them, even in the case of an emergency consignment or situation.

To be able to get any action from multinationals, you have to have enough business to warrant a response. Often this is how small to medium freight forwarder actually obtain customers, with accessibility and flexibility the keys to their relationship with their customers.

Ronald Spahr is managing director of International Cargo Express, an independent freight forwarder that has maintained relationships over the last 25 years. ICE’s point of difference, when compared with a large number of multi-national forwarders who only offer “services you have to have”, is its personalised service. ICE is a mid-sized, independent company able to offer a best price policy to all our customers. ICE has a global reach and is entirely Australian owned.