Quality of service, options, communication, relationship – they all play a role in selecting a vendor. However, despite the service and company, we all know that price holds great influence on a customer’s final decision. Selecting a vendor can be a stressful process, and it seems that the “perfect” freight forwarder always lays just outside of your preferred budget. Luckily, there are a few things you can do to negotiate the best rates from your freight forwarder. This can keep you from making sacrifices to your company’s efficiency in logistics and decrease your overall costs.
Getting the Best Rates from Your Freight Forwarder
Freight forwarders understand that every customer has different processes, requirements, and price points. Although not everything is up to negotiation, here are a few tips and tricks for getting the best rates from your freight forwarder.
Discuss Annual Shipment Volume
If your company ships on a frequent basis, you may be able to leverage this to your advantage. Freight forwarders book massive volumes with steamship lines on an annual basis, which allows them to receive lower prices that companies who go directly to steamship lines. This also means that freight forwarders love having customers that ship large quantities of containers on an annual basis. If you currently ship a lot, or plan on increasing the number of shipments you do on a yearly basis, reach out to your freight forwarder and let them know. Transparency of your shipping volume will help you to get the best rates from your freight forwarder.
Plan Your Shipments
A freight forwarder’s biggest “pet peeve” is last minute requests – especially for international shipments. They are more than capable of handling them and are happy to do so, but you will need to be expectant of paying quite a bit more for the service.
International shipments are planned multiple weeks, or even months in advance. Trying to book a shipment last-minute means your freight forwarder will have to pull some strings to get your cargo moving. However, it also means higher prices and a higher risk of delayed or missed delivery. If you want the best rates from your freight forwarder, let them know well-in-advance of your upcoming shipments so they can begin to plan them now.
Transit Time vs. Price
As most of us could expect, shipments that need to move faster do so for a higher price. Booking a next day air shipment will cost significantly more that transport via ocean or intermodal methods. Discuss with your freight forwarder the projects you have at hand, and have open ears to their suggestions as to what the best option would be to accommodate your budget. Often times, businesses will stick to their traditional processes/shipping preferences without realizing that they may be wasting money.
We have helped many customers switch from air and truck transport intermodal, which lowered their rates significantly without dropping the quality of service they received. Reach out to us to discuss if there may be a better shipping process for your company to lower costs without causing hiccups in your operations.
Much of this boils down to the difference between FCL and LCL shipping. Many companies don’t realize that booking more than 15 CBM’s on an LCL container could be costing them more than renting the container in its entirety. FCL shipping may be more cost-effective than LCL shipping once you are able to fill half of a container. Talk with your freight forwarder about different consolidation methods to see if you can reap the cost benefits of FCL shipping. It may require some schedule re-arranging if you ship on an infrequent basis, but it’s a good way to get the best rates from your freight forwarder.
Don’t make your decisions based on the quotes you receive from an RFQ or freight forwarder bid. Firstly, without understanding your current and future plans in their entirety, it is difficult for a freight forwarder to make an accurate assessment of the rates that should be given. Secondly, depending on your unique circumstances and projects, you may benefit greatly from having a short discussion of different consolidation and shipping methods your freight forwarder could provide to reduce costs. The best way to learn how your can get the best rates from your freight forwarder is to hold a conversation with them. If you have freight forwarders reaching out to you, or are consistently running across one online, call them and see what better value they may be able to provide you.