Going from sending packages to delivering freight can be a big move, with a whole new set of potential problems.
“Separate shipping, brokerage and delivery results in customs delays and added time and cost”
Going from sending packages to delivering freight can be a big move, with a whole new set of potential problems. There are lots of companies out there competing for your business, so what kind of questions do you need to ask?
1. Does the carrier have experience with your type of cargo?
Certain types of cargo, like pharmaceuticals, biologics and investigational drugs, are temperature sensitive. Like hi-tech industries, healthcare is highly regulated and transportation of these products needs to adhere to strict guidelines. It’s important to find out if the freight company you’re considering has experience with your type of cargo. Freight companies with experience in these industries will know what the requirements are and will be able to predict any problems before they occur.
2. Is the carrier large and experienced enough to ensure a problem-free delivery?
Look at their network. You need to know if the freight company has an office in the country you’re exporting to. It’s no help a company having offices in Asia if a problem occurs in Arizona. Some industries, such as retail, require multi-country distribution and an ability to handle different trade regulations, poor infrastructure, and synchronisation across time zones.
Experienced carriers should be able to rectify unusual situations while your cargo’s at sea or going through customs. They should also be able to adapt to volume changes. This is particularly important for the manufacturing and retail industries, where seasonal demand varies.
You should be sure that the freight company can schedule delivery through different modes of transport: ocean or air freight, rail or road. Supply chain managers need to balance transport costs against cost of inventory, especially when goods are high value.
Some freight companies only deliver to a port or airport. You’ll then have the headache of arranging onward transportation to the final delivery address. Make sure you know who’ll be responsible for the final leg of the journey and if your products will be transported safely in weather-proof trucks or containers. Using multiple parties on a single lane for shipping, brokerage and delivery can result in customs clearance delays and added time and cost. Multiple handover of goods also increases the risk of damage or loss. Dealing with multiple parties also increases the time it takes to respond to customer enquiries.
3. How will they manage risks and keeping you informed?
You need to be certain that your consignment won’t be lost. You need to be certain that your freight company is financially sound and able to get your consignment to its destination safely. Will they be able to pay the fees to release your cargo from ships? If there’s an event like a port closure or strike, will they be able to re-route the consignment? Inability to do this can cause production disruption, loss of revenue and customer complaints.
It’s important to know where your shipment is, particularly if your customers ask about delivery dates. Find out if your logistics provider offers some method of tracking the progress and delivery of orders. The best ones will offer online services, some with SMS notifications. Lack of information available to respond to customer enquiries can lead to lost sales, customer dissatisfaction and increased churn.
It might be important for you or your customers to access and track shipments. In order to offer your customers a better experience, you might need to integrate order tracking through an API with your transportation company’s technology. E-commerce customers might expect this kind of tracking service when they order online. Can the company you’re considering offer this?
4. Can your transportation company give you advice on your supply chain?
Like many businesses, yours is probably under pressure to get products to customers faster. Faster delivery also keeps inventory levels low. Yet you have to be mindful of costs and fast transportation costs more. Ask your freight company if they can give advice on the most cost- and time-efficient methods of delivery. Can they advise on restructuring your supply chain to introduce efficiencies?
5. Does your freight company’s service end with the delivery?
Hi-tech and other manufacturing, wholesaling and retailing industries have complex supply chains. They need to deliver orders efficiently, but they may also be required to have procedures in place for returns or parts replacements. These industries need a freight company that has warehouses and repair depots and can offer service parts logistics and returns services. Does the freight company you’re thinking of offer this?
As the world’s largest customs broker, with offices in over 220 countries and territories worldwide, a fleet of 96,361 vehicles, 237 aircraft, and over 400,000 problem-solvers, including experts in all business sectors, UPS can handle almost any eventuality. If in any doubts at all about your freight company, or you have any unanswered questions, we’re here to help.
Download the article from the Economist Intelligence Unit