n this third installment of the three-part survey of shipper views of air cargo services, the International Logistics Quality Institute looks at the opinions of intercontinental air shippers regarding the services of the major freight forwarders. The survey was the result of questions to more than 800 air freight shippers and included nearly 1,500 provider-specific assessments across a broad cross-section of users by industry, spending level, regional focus, and shipment weight.

The survey represents the most comprehensive picture available today in this important market segment, and for the first time provides in-depth rankings of specific air freight integrators and freight forwarding providers along a number of key service dimensions.

This article covers quality and performance rankings for major freight forwarders operating in the United States who serve the heavyweight air freight needs of intercontinental shippers. Previous articles discussed overall trends and issues facing the industry overall, and published quality and performance rankings for integrators who specialize in lightweight air freight shipments.

A key message from the findings was that shippers are generally satisfied with their freight forwarders, as shown in Figure 1.

Fifty percent of shippers indicate that they are "very satisfied" with their providers, while only 7 percent are "somewhat dissatisfied" or "very dissatisfied," findings that are consistent with the overall survey results that were included in a prior article.

A large share of respondents (43 percent) is only "somewhat satisfied" or "indifferent," however. This suggests that there is significant room for improvement in fully meeting customers' needs and expectations.

To more comprehensively evaluate freight forwarder performance and quality, shippers were asked to indicate how important each of six key attributes is to them in selecting and assessing their providers - Transit Time, Service Reliability, Network Coverage, Technology/Administrative Services, Customer Service, and Rates.

In addition, shippers were asked to rate their own providers on each attribute, with scores ranging from 1 ("One of the Worst") to 5 ("One of the Best"). These ratings were weighted by the relative importance of each attribute to develop final scores.

This ILQI methodology truly defines what "quality" means, based on the views of the shippers who are the customers for intercontinental air freight services.

Service reliability (43 percent) and rates (32 percent) were the most important attributes for shippers in choosing freight forwarders, with transit time a distant third at 11 percent. Although this is generally consistent with the overall survey results, shippers place a somewhat higher level of importance on rates in the freight forwarding segment of the marketplace, and somewhat less importance on transit time (see Figure 2).

"The importance of service reliability to shippers comes through loud and clear in these survey results, said Scott Elliff, president of Capital Consulting & Management. "Companies are continuing to seek to tighten their global supply chains, and arranging to get product delivered on time, as scheduled is a critical function performed by forwarders. The proven track record of forwarders will increasingly be a key differentiator for their success in the future."

Nippon Express is ranked Number One in overall freight forwarder quality according to the 2003 ILQI shipper survey, closely followed by Expeditors International and FedEx Freight Services, as summarized in Figure 3.

All of the forwarders ranked in this survey received generally positive ratings from customers, but these three stand out across all individual attributes, and their across-the-board performance drives their overall leadership in the ILQI quality rankings.

As shown in Figure 4, these three forwarders garnered all of the Number One rankings on each of the six key attributes, and were ranked among the top forwarders on a consistent basis.

FedEx Freight and Expeditors International are the top rated forwarders for trans-Atlantic shipping, with superior rankings across the board. FedEx Freight virtually swept the rankings, with the top score in all six quality attributes, with Expeditors in second place for 5 of the 6 categories (see Figure 5).

Kintetsu and Nippon Express are ranked Number One and Number Two for Trans-Pacific shipping. Shippers rank Kintetsu number one in rates and overall, and rank Nippon Express Number One in service reliability, network coverage, and customer service (see Figure 6).

"The good news in these rankings is that freight forwarders generally received fairly high scores across the board, said Brian Clancy, a principal of the MergeGlobal consulting firm. "The challenge, however, is that small differences matter greatly to shippers who make the decisions about who to use as their forwarding providers."

Emerging Trends

As indicated in a previous article, nearly 70 percent of shippers believe that the air freight provider industry will continue to consolidate in the future. At the same time, more than 70 percent of shippers are concerned that "one-stop shopping" will never fully meet their needs.

The ILQI quality and performance rankings of freight forwarders, combined with rankings of integrators that were published earlier, provide some new insight into these concerns. In particular, the combined rankings indicate how well those few providers who already provide both freight forwarding and integrated carrier services across the full range of light and heavyweight intercontinental air freight are succeeding - in the eyes of their customers.

Figure 7 shows that shippers rank FedEx as the most successful provider in serving the full range of shipping needs today, with top tier rankings in both the integrator and freight forwarding segments. UPS is in second place in these overall rankings, with top tier integrator rankings but only mid tier quality and performance in freight forwarding, while DHL-Danzas is judged to be in the low tier in both categories.

"Although the forwarding industry historically has been very fragmented," said David Hoppin, a principal of MergeGlobal, "the success of large players such as FedEx and UPS in providing a broad range of services for intercontinental shippers may well be a catalyst for increased consolidation in the next several years, as providers seek to put together 'one-stop shopping' solutions for key customers."

More detailed survey results can be obtained by contacting the International Logistics Quality Institute (ILQI) at (703) 276-9100 or by visiting: www.logisticsquality.org