Honing in on best practices: Freight forwarders share keys to success
“If you cannot build your own pallets, you will never reach the threshold to become competitive,” Forster says. “It gives us the best buying power and allows us to give customers the best rates. Of course, it has a lot to do with the productivity of our own people.”
Forster says Panalpina was one of the first freight forwarders to source airfreight from carriers.
“We might have been one of the first to use sourcing of our procurement,” Forster says. “What we do is basically invite all providers to bid for certain tonnage. These days, you cannot be without it. In order to get the best deal from a carrier, you have to tell them what you can offer on a worldwide basis. We tell our key carriers this is the worldwide tonnage we have and we split it into different trade lanes. It’s the same thing that big shippers do, companies like IBM or Apple – you name it. They do the same thing with freight forwarders.”
Vaughn Moore, president and CEO of AIT Worldwide Logistics, says one of his company’s best practices is to maintain a scorecard for both vendors and clients to ensure quality control.
“Internally, we use a vendor scorecard, and we do hold them accountable,” Moore says. “We measure monthly, and we meet with them quarterly. This includes issues such as on-time delivery and making sure we have all the items we needs. So we are in a true partnership and have an honest dialogue. We identify problem areas and things that may pop up on claims. I do believe we are doing a good job and are a best-in-class partner in that regard with vendors and our client base.”
Moore says AIT builds on the information gleaned from the scorecards and uses it to work toward continual improvement.
“It certainly holds us accountable to be a best-in-class partner with on-time shipments, low claim ratios and billing accuracy,” Moore says. “It makes us a better partner with our clients. We review trends with them and both sides are catching things that we can address. We have been able to identify problem areas that if we were not doing this, we would have missed.”
Moore notes that challenging economic times have forced forwarders to be diverse in their service offerings. He says companies have to be varied and focused at the same time.
“It’s a fine line we walk to be best in class in vertical markets such as perishables,” he says. “It’s a real tightrope walk.”
AIT has been in business since 1979 and despite the economy of recent years, it has shown strong growth over the past decade. Moore notes that the airfreight industry is undergoing challenges, but he remains optimistic.
“One industry that airfreight has never gone away from is perishables, and that will stay strong overall,” he says. “With manufacturing picking up, I am hoping to see some more just-in-time products get shipped out via air. There is a lot of near-sourcing going on, and it will be interesting to see what happens with that.”
Langham Logistics is an Indianapolis based 3PL that will mark its 25th anniversary in July. Cathy Langham, the company’s co-founder, president and CEO, says her company is diverse and is involved in forwarding, fulfillment, warehousing, pick and pack and airport logistics.
“What we do very well is leverage the strength of our team,” Langham says.
This came into play in 2012 when baking products specialist Clabber Girl, another Indiana-based company, became a customer. After a series of contacts led to a meeting with company officials, Langham Logistics had an opportunity to demonstrate its strong points.
“We came up with three areas of opportunity,” Langham says. “One of our folks is a good visual marketing person, and we synthesized their challenges into a one-page picture that allowed them and us to get a good picture of where the opportunities are and where to move forward. At that point, we had a contract of sorts, a working document that we all signed off on to make sure everyone was on the same page and moving in the same direction. It allowed us to move forward and bring our smart people and their smart people together.”
Langham says developing a simple visual solution and listening to Clabber Girl’s needs were the keys to getting its business.