How To Choose A Domestic Freight Forwarder
The use of a domestic freight forwarder within your supply chain can allow your firm
to take advantage of the freight forwarder's volume buying power and expertise resulting in a freight forwarding program that not only meets deadlines but also reduces your costs.
The key is selecting the right partner to handle your freight forwarding needs. Perhaps the first area you should evaluate in a potential freight forwarding partner involves learning some basic, general information about that potential partner and its operations.
Here 14 key facts you should learn about each of the freight forwarders you are considering:
1) Is the company a full-service freight forwarder?
2) How long has the company been in business?
3) How large is their staff and what is their level of experience?
4) What are their business hours?
5) What is the company's weekly tonnage to various cities?
6) Is the company certified to handle the shipping of hazardous materials?
7) Does the company specialize in certain commodities and/or shipping methods?
8) Can the company provide additional support services such as handling letters of credit?
9) What are the charges for documentation handling, local and destination charges and banking?
10) Does the company charge extra for faxes and other incidentals?
11) Does the company have warehouse facilities and what type of security is provided at these facilities?
12) Are the company's main office and local/regional offices equally dependable?
13) Are their clear lines of communication between the company's various offices?
14) What are the company's plans for future growth?
In addition, there are a number of other key points in several other important areas you should factor into your decision when selecting a domestic freight forwarder:
Price
- How is the company's pricing determined? Is it a flat rate?
- What are their fuel and storage charges?
- Do they offer volume price breaks?
- Is their price based on total weekly commitment?
- Are there seasonal price increases?
Transit Times
- What is their percentage of on-time deliveries?
- Do they offer pre-alert notifications and the option of alternate shipping methods?
- Do they offer a money-back guarantee?
Allocations with Airlines, Trucking Firms, etc.
- Who are their top three carriers?
- What is their tonnage per week with their various carriers?
- Do they offer daily or weekly consolidations?
- How many of their weekly consolidations have extra space?
- Do they offer charter service during peak seasons, such as Christmas?
IT/EDI Capabilities
- What are their capabilities in connecting to your systems, your bank's systems or to the systems of other parties in the transaction?
- What are their future plans for electronic transmission of documents?
Insurance
- What is the cost of insurance?
- Will they share specific details of their coverage, including photocopies of their policy?
Experience with Specific Types of Materials and Transactions
- Returns and repairs
- Drawback programs
- Palletizing, crating and handling of cargo
- Sensitivity to damage and other packing issues
- Hazardous materials regulations
Invoicing
- Do they offer monthly billing?
During your selection process, be sure to ask for references and include site visits to the domestic freight forwarders that make it to your short list. When you build your RFQ (request for quote) be sure that it is complete and up to date. The RFQ needs to thoroughly define your requirements and expectations.
Be selective. Narrow your field of prospective freight forwarders to a manageable short list before the formal RFQ stage. If you send out too many RFQs, you will have a difficult time reviewing them in a thorough yet efficient manner. And, when it comes time to negotiate, negotiate rates based only on the services your company will use.
by: Fred Dubya
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