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the freight forwarding industry: the times they are a changing

by:VIPUTRANS     2020-04-29
I spoke to Eddie Lai, president of triumph Express Services Canada, about the freight forwarding industry and its changes.
Eddie referred to the freight forwarder as the \"freight travel agency \".
The freight forwarder purchases the shipping space from the shipping company wholesale, and then resell the shipping space to the owner.
They make a living according to the price difference.
In Canada, the industry is not as tightly regulated as in the US, they negotiate with operators in May every year and buy the space they think can be sold next year.
While the capacity commitment is firm, the price charged on the driveway may change the supply and demand forces in the market.
\"It was a demand game a few years later and the shipper was struggling for space.
For some years, like this year, this is a \"supply game\" where shippers can negotiate hard on prices.
The victory was started by Eddie\'s father, who worked for Kuehne Nagel in his early 80 s and accumulated industry experience.
When Eddie\'s father started his business, Chinese trade was just beginning.
With the growth of trade, freight forwarders have experienced a long period of time, but this is a non-
Enter the asset business with low threshold.
\"We compete with Xiao Er.
3-person shows and big shots like multinational freight forwarders.
When there is abundant ship capacity like this year, \"the competition for this business is very fierce.
\"Not long ago, shippers will negotiate rates several times a year with their freight forwarders.
There are now negotiations every week.
\"If the customer is able to get a better price from the competition, we need to go back to the line of the ship and ask for a lower price.
\"In this type of market, we are constantly reviewing the purchase rate with our core operators.
Another thing that has made the business more difficult is the ship route alliance, such as the G6 Alliance, which includes six leading operators.
In these agreements, according to vessel rotation, any carrier in the alliance can fill in the capacity reserved on the driveway.
These types of alliances make ship services more homogeneous, making it harder for freight forwarders to leverage their domain knowledge and deliver niche products.
This also increases the price competition.
Triumph also adapts to this pressure by providing customs clearance and warehousing services.
Over the years, they have developed into a 70-person company with four offices and two warehouses in Canada, earning more than $75 million.
But most of their business is still moving forward, and the company has recently taken some steps to be more competitive by offering new benefits to its customers.
Triumph has implemented CargoSmart\'s private label sailing schedule.
This is a SaaS-based web solution that aggregates the latest voyage schedule data from multiple sources.
At first, when the solution was submitted to him, Eddie thought, \"Why do I need this solution?
I can check their schedule on any line.
But when he thought of it, he realized that the solution could save time for his staff and improve visibility of the vessel.
When he thought more about the solution, he realized there were other advantages.
\"There are not many agents that aggregate data.
By opening this data to our customers, they can view the best time to ship.
\"This eliminates the suspicion that a potential customer problem is that freight forwarders choose the goods that best suit their internal needs rather than the customer\'s needs.
As anyone who handles shipping on a regular basis realizes, in fact, the sailing schedule has been changing.
For example, CargoSmart data showed that there were 5,689,979 schedule changes and 608,112 service changes in 2015 (
For example, ship lines change the itinerary by adding ports, or switch the order of service for a specific port)
And schedule delays of 234,414.
The sailing schedule is more accurate.
CargoSmart\'s plan delay alert leverages integrated navigation plan data from multiple sources and uses tools to help identify planned changes that may affect shipments.
The Daily report informs the recipient of significant schedule changes for ships whose estimated departure time or estimated arrival time changes more than 24 hours.
Eddie found CargoSmart\'s data more accurate.
\"More accurate data means better service. ”Mr.
Rei gives an example of customers who serve large retailers who charge a fine if the shipment is late.
If you can tell the retailer that it will be late ten days before the scheduled arrival at their DC terminal, the penalty may be waived or reduced.
\"At least, the sooner you tell them the better.
Some retail customers gave the tool to their buyers.
\"When the supplier tells them that \'your shipment will be ready by this date, \'the buyer can tell the forwarder,\' I want them on this ship.
In conclusion, Eddie called the solution \"a long-awaited window where shippers can view the global sailing schedule and make informed decisions that affect the supply chain . \".
This is the future of the industry.
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