Importance of Freight Forwarder Transparency in a Season of Uncertainty

The last several months have been difficult for a lot of us. Freight rates are all over the map, congestion is at an all-time high, and consumer demand continues to grow despite the shortage of empty container, vessels, and equipment both overseas and locally.

However, most of the issues that shippers are experiencing they’re not even aware of. By that we mean, much of the delays and obscene freight costs that shippers are experiencing are a result of dishonest or non-transparent freight forwarders who aren’t working actively to communicate market updates and adjust their strategy for their clients.

We get it – the year has been filled with uncertainty. The market has been changing faster than ever, and shippers and freight forwarders alike are both working overtime to keep up with this dynamic season. However, when the market updates fast, there should be a heightened sense of accountability on the part of service providers, as it’s their job to keep customers informed on changes in the industry. Unfortunately, that’s not what many shippers are experiencing.

Freight Forwarder Transparency: More Important Than Ever

A couple years ago, we surveyed hundreds of shippers to ask them what their greatest frustrations were with their freight forwarders, and one of the top 4 biggest frustrations turned out to be “pricing transparency.” But after speaking in further details with shippers, we noticed it wasn’t just the pricing issue – it was the entire lack of transparency as a characteristic of their freight forwarders that made them so difficult to work with.

If you’ve been paying attention to market conditions, you’ve realized that freight rates are constantly changing. And after having hit record highs in the last month, rates are finally starting to come down a little bit. It’s seasons like these where we often see frustrated customers come to us because they found out their forwarder was pocketing extra margin by keeping them in the dark on changes in freight rates.

Evaluating Your Freight Forwarder

Whenever the industry gets volatile, it’s important to survey and evaluate your freight forwarders. The most important things you can do are: (1) compare your current relationship and pricing to the past, and (2) reach out to new freight forwarders to gauge the market.

One of the biggest issues shippers fall prey to is the problem of “price creep.” This is when freight forwarders slowly jack up pricing on customers over a long period of time, so the customer won’t notice. Unfortunately, most shippers don’t notice and end up wasting tons of money on inflated freight rates, and by the time they do notice, the damage has already been done.

What we are seeing this time around is sort of the opposite of price creep. Prices were appropriately increased as carrier rates shot through the roof over the last year, but now that the market is trending down in the direction of “normal,” freight forwarders are continuing their same pricing with their customers.

If you ‘re not seeing a change in pricing as market conditions shift or aren’t being given an opportunity to change your strategy and rates in the coming quarter, it may be time to start a conversation with another freight forwarder to appropriately evaluate how much you should be getting charged.

In addition to the pricing evaluation, it’s also smart to just pay attention to how much your freight forwarder is informing you on general market conditions. Remember – your forwarder is not just an ad-hoc service provider meant to move your freight from point A to point B. Their priority worth is as a source of value for you and your entire logistics team. They should keep you in the loop on pricing changes, market updates, and forecasts for the future.

What to Do

If you feel like you are being ignored, neglected, lied to, or simply left in the dark on pricing changes from your freight forwarder, it’s time to reach out to others and evaluate your current shipping vendor.

If you have any questions about the market, changes in freight rates, best routes, congestion, or anything else, please don’t hesitate to simply reach out to one of our team members! We’re here to help you and your team out, and want you to have all necessary information to properly evaluate your current logistics situation!



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