Time to address the age-old question: “Does size matter?”
I can’t seem to remember if that was about freight forwarders or not… Regardless, there’s not a simple “yes” or “no” answer. Every freight forwarder has their own similarities and differences. However, there are a few considerable differences between large corporate giants and the small kids on the block.
5 Differences Between Small and Large Freight Forwarders
If you are looking to make a switch, or are simply curious on what the primary distinctions are among small and large freight forwarders, here is a small summary of the most obvious signs:
1) Escalation Process
What’s the difference between small and large freight forwarders when everything goes as planned?
Little to none.
But what about those unfortunately not-so-uncommon scenarios in which plans go sideways? When you know the person you’ve been speaking with has no authority to make an executive call on an issue – how do you get to the right personnel?
This is perhaps one of the biggest points of difference between small and large forwarders. With large freight forwarders, the escalation process is rather complicated and difficult to define. Management structures are much more vertical, meaning those who deal with customers are rarely the ones who have management authority to change anything when there’s issues. Not only do they not have the authority to make these calls – they probably don’t even understand what needs to be done to set things straight.
Employees at small freight forwarders have the added benefits of autonomy, control, and knowledge in their departments. Since management structures are more horizontal, and there are less people-per-department, employees have a wide range of knowledge regarding any decisions, actions, and issues that may arise during a project. Furthermore, escalation is simple. You are probably already speaking to the correct person to handle the issue, and if not, the right person is one phone call away.
2) Flexibility in Process
Large corporations are well-known for having defined processes and actions for any project. The benefit of this is that employees always have a clear-cut linear progression of steps to accomplish a task. The downside of this is that not every customer has the same needs or work process necessary for their freight forwarder to accommodate them.
Smaller freight forwarders have the ability to customize their work flow to better mesh with the needs of clients. If you have a specific way that you like things done or have any out-of-the-ordinary needs, let us know! We are sure we can find a way to accommodate your specific needs.
3) Employee Knowledge
Due to employee responsibility differences at large and small freight forwarders, workers have largely different sets of knowledge regarding shipping process and international trade.
Think of the international shipping process like a puzzle. In order for the whole thing to work out, all the individual pieces need to meet in the correct order and the right time. At larger freight forwarders, employees are designated in their roles to handle one or two of these pieces. This means asking any questions about customs clearance process to the guy who handles documentation is likely to result in some dandruff-inducing head scratches.
Employees at smaller forwarders are much more versed in a wide range of topics regarding their positions. You may even be surprised at the import knowledge of export workers and vice-versa. If you ever have difficulties learning about an industry-related topic or issue, give us a call and see if we can answer it! We’re happy to help whenever we can!
4) Industry Network
It’s well-known that big companies work with big companies. We don’t entirely understand why this is always the case, but there’s no doubt that large freight forwarders try to limit their network connections to include only the sizeable players.
The issue with this method is that big companies also act like all other big companies. Finding the right people to speak with for urgent matters, customizing project options, changing pricing, and so many other circumstances are near impossible to change when working with large companies.
Small freight forwarders generally have a wide industry network of carriers, brokers, warehouses, distribution centers, and other forwarders both large and small. This gives them the flexibility and empowerment to find unique solutions for a client’s need.
Relationships are crucial in business. For companies that are managing hundreds or even thousands of clients, maintaining strong business relationships can be difficult. It’s simple logic that as the number of people you service increases, the amount of time you dedicate to each simultaneously decreases. This is a major difference between small and large freight forwarders.
While many large freight forwarders do their best to get their agents on a name-to-name basis with customers, the relationship between the client and forwarder is unfortunately rather shallow. Here’s what we mean by this. Larger forwarders have a vertical management structure. This allows them to staff more people at the bottom levels to deal with customers. While each of those members may develop relationships with clients on a first-name basis, those employees have very little leverage to act on their business relationship in any way. This leaves you with a kind voice on the other side of the phone, but not a genuinely beneficial business relationship.
On the other hand, small freight forwarders have more time to dedicate to each customer, as well as the ability to use these relationships for the customer’s advantage. The occasional, “I owe you” isn’t a violation of corporate rules. We like when business works as usual, but we also understand coloring outside the lines is needed sometimes. We do everything in our power to keep our client relations close.
Picking a freight forwarder is a stressful decision. When it comes to tackling the task, you can choose between two primary categories: small or large forwarders. While large freight forwarders have the advantages of reputation and brand awareness, there are plenty of red flags in handing your business over to them. Their vertical management structures make it difficult to contact the right personnel when issues must be escalated. Communication is minimized since more customers means less time can be devoted to each customer. And of course, big companies work with big companies. If you’re not a corporate giant, chances are you’re viewed as one of thousands of crumbs at the bottom of their revenue funnel. So maybe large forwarders are too big for your company.
Small freight forwarders have more time to devote to their customers. Their staff are generally more experienced that large forwarder employees, since each worker handles more than one single piece of the puzzle. And of course, small businesses thrive on relationships. Customers are the lifeblood of our existence and we always attempt to go above and beyond to maintain those business relationships.
If you are looking to make a switch, or would like to learn about how we work with our clients, we’d love to chat when you’re available. Give one of our team members a call and we’d be happy to help!