Strategies for Becoming a Forward-Thinking Freight Forwarder
Strategies for Becoming a Forward-Thinking Freight Forwarder
As freight forwarders have consolidated over the last several years, smaller freight forwarders have had an increasingly difficult time consolidating goods. The consequences for them can be dire: without creative and strategic thinking and planning, they will simply not be able to survive. Leveraging technology, key partnerships, and strategic collaborations have enabled small freight forwarders to compete and to think about consolidation without losing independence. Freight forwarders who are open to change, receptive to technology, and thoughtful about collaborative partnerships will get ahead while those who resist will not survive.
With 30 years in the industry, I have synthesized the most salient ideas for forward-thinking freight forwarders in 2024:
Play the Long Game
Short-sighted freight forwarders who focus on gross margins on a shipment-by-shipment basis are going to miss out. Defragmentation of all the different parties involved has led to a lack of focus. For example, if a customer has a weekly Dallas-to-London one-ton shipment, they may use six different providers depending on who gives them the best rate. Forward-thinking freight forwarders are building partnerships not based on one week’s rate but rather on longer-term collaborations that provide better rates in the long run and in aggregate. Innovation calls for zooming out to 30,000 feet, thinking about all of the components of moving freight, and aligning with key partnerships to create optimization – not just for an individual shipment but for the entire logistics chain.
Be Open to Change
There is a categorical lack of trust and an aversion to change in the industry, which fundamentally hinders strategic thought and collaboration. A lack of trust, rapport, and accurate data in transit times fundamentally precludes gross margin optimization. Misguided “best practices” driven by detached Ivory Tower “thought leaders” often create incentives for one-off, transactional decision-making. Forward-thinking freight forwarders will prioritize strategic alliances to drive margins up and costs down, fostering a more sustainable and profitable approach.
Embrace Green Energy Mandates
The pressures of green energy are beneficial for both business and the environment. Fundamentally, fewer planes will be in the air if green energy mandates are followed, reducing excess capacity and optimizing efficiency. Eliminating half-empty planes from the skies benefits the bottom line by maximizing underutilized capacity. Small forwarders who embrace these mandates will see direct financial and operational benefits as they optimize resources and streamline their processes.
Think Big Picture
Planning for air freight complexities is easier with consolidated freight. Consider ULD (Unit Load Device) shipments – they are less likely to be bumped on a planned route. Consolidation allows for better planning, improved consistency in transit times, and a reduction in shipment damage. Handling freight at the ULD level instead of the pallet level reduces loss, forklift damage, and other risks. Ultimately, thinking strategically beyond just pricing and environmental benefits leads to a better overall experience for the end customer as well.
About Captain Cargo
Captain Cargo is a freight consolidator leveraging technology to bring flexibility and enhanced customer service to freight forwarders, enabling them to compete effectively with the industry’s largest players.
About Chris Condon
Chris is a seasoned industry expert with 30 years of experience and a forward-thinking perspective that has enabled him to bring creative and strategic solutions to small freight forwarders. His insights help shape the industry, empowering freight forwarders to adapt and thrive in an evolving global market.
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