Logistics - Working with Freight Forwarders

A fellow from last session is fixing some errors on his MOQ FOB, and he made some tactical errors vis a vis his freight forwarder we are sorting out...  pay careful attention to what I say about freight forwarders, their help is critical, but be zen like, use as little as possible...  think through and minimize...

Begin forwarded message:

From: John Spiers

Date: August 6, 2014 6:02:23 AM PDT

To: J

Subject: Re: Freight Forwarder Help

Hey J,

In my lesson on freight forwarders I stress that they are not inclined to help small exporters because usually they are a lot of work and usually no pay-off.  This is one reason of many why I stress the MOQ FOB as a tactic, "one size fits all."

She says directly there is no "one size fits all."

But there is...  and you only get ONE chance to create it.  You do not get two chances to create the MOQ FOB with a freight forwarder.

Now when you freight forwarder says:

From Winnipeg to China, for instance, cargo will come to Vancouver or Montreal whereas if the freight is going to Europe, Montreal or Halifax are more likely.

This is quite true.  For Canada, Vancouver, Montreal and Halifax are the big export ports.  So during your research, say your #1 target country was Malaysia, then you would make it FOB Vancouver.  If your target market was Bulgaria, the Halifax or Montreal.  I believe you said USA was, so them Montreal.

Your goal is all "in-country" costs known and listed up to the point from which any buyer in the world can take it from there, eg, FOB Vancouver.

Now, hear yourself:

I told her to give me estimates for Winnipeg to Montreal and Winnipeg to Vancouver to cover most of the possibilities. In the MOQ FOB Offer, I plan only to show Winnipeg to Montreal because it is the closest port.

Why are you having her do work when you will not use the fruit of her efforts? If you are not going to use Winnipeg to Vancouver then don't ask for it.  It will not do to say "I may need it" because you may also need Winnipeg to halifax and endless other combinations.  Any time spent on creating things you cannot use immediately is wasted time.   I am not picking on you, I am just showing why Freight Forwarders lose interest fast because what they offer is "free" and so people want huge helpings of "free."  

So you get only Winnipeg to Montreal, and show that.  IF it should come to pass in a year a Romanian buyer wants FOB halifax you can go back to the freight forwarder and say "Kazar of Romania is inquiring about an FOB halifax quote."  this new request is based on a solid customer inquiry, not wild "maybe this, maybe that..."

Now, you can go back to your FF and explain your "customers are in USA and you want to make it as easy as possible, so you want the FOB Montreal quote", and if she provides, then good.  You  might ask if you can link from the quote page to her email so if an american buyer wants your FF to "handle the shipment" the buyer can easily contact the FF.

Here is what is tedious for the freight forwarder:  their field is far more complicated than people imagine, and anyone who has academic information about the field, what they learned in school, has no idea about the fact the landscape changes constantly during the hours of any given day, so any thought as to how things should be done is almost always wrong.  There is nothing like selling a perishable space and time moving from place to place, faster than the market can make a price.  There is nothing like it.  And unless you do it for a living, you cannot know what it is like. Long fruitless, frustrating discussions occur.

So, when you first visit a freight forwarder, you show your research and say "I will be offering this HTS at this weight and dimension at this price, etc, from this port."  Please give me a quote.  DONE!  The FF sees you have a purpose and that your requirement is specific and limited.

So in this instance, where it seems we've crossed the "too much work" line with Cole, you can ask for that one clean Winnipeg to Montreal quote, and if your FF will not help, then find another FF, maybe one in Montreal... and start over.

Does this make sense?

John

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