Cooperation between Small Forwarders

Mr. Mark J Willis from AFL Ambassador has commented on the post Small Size Forwarders that one of the ways for the SME Forwarders to stay at the market is to unite in some form of consortium.  I would agree to some extend but we should admit that cooperation between businesses is not an easy task.  Though the positive effects of such a cooperation are obvious especially for SME Forwarders, for one reason or another it is very difficult to build partnership in an integrated manner.  What I understand in integrated manner it is that you and your partner work like you are same offices but not two different companies,  sharing the costs, problems and at the end the benefits of course.

And believe me it is not only with two small forwarders. Same is valid when two offices of the same big company work to each other.  And in the bottom line it is – lack of trust.  So the question is actually not How to build successful cooperation but should be – How to build trusted relations.

Here are some ways to cooperate and increase your business.

1. Becoming agent of a big company

One of the ways for a SSF to benefit from wider network, eventually centralized billing system, sales leads generation and additional business generation is to become exclusive or official agent of some of the big guys. This however has its negative sides. Majority of the big guys sees the agents like potential competitors and cooperate with them on an adversary mode. I can share quite an experience here. Well there are also exceptions but they are very few.  At the end the big guys either want to buy the SSF for peanuts or simply enter the already explored and matured market.

2. Join a Forwarder Network.

This is a good approach for a SSF to increase its global reach without loosing its independence.  There are several things, however, which the SME should consider before joining such a network:

* Check the network site and find how reliable the network is.
* Try to assess whether the annual network fee will be justified by the potential business you might generate by joining it
* Find out whether the network can issue their own HBL and HAWB and how members can use this opportunity
* Check whether there are some strict ethic standards
* Check how payment among members is arranged – is it no member to member basis or there is clearance procedure in place.

Checking all this will save you the unpleasant feeling you might experience if you find that you have paid 2500 USD annual fee for a membership in a network where the number of members for certain area is unlimited, you still have to issue your own HAWB and HBL and network can not assist you in a dispute you might run into with another FFN member.

3. Build own partnership network

Another way is for SME to start building up its own network of partners.  Very tough and time consuming process.  But this at the end can benefit you with very good partners – again SSF in their locations – with whom you can start building integrated network based on trust.  The third approach is good one but it is very time consuming. So if you want to have a network build on trust – start it now

4. SEKO approach

I really like it. Connecting independent forwarders under common brand. I think this is the most integral way of cooperation where the strengths of SME forwarder are combined with the strengths big forwarders have.

I would appreciate your input and your comments.

And if you have any queries or questions regarding freight forwarding in Bulgaria, please do not forget and contact KG CARGO for assistance.

2 thoughts on “Cooperation between Small Forwarders

  1. I totally agree on the comments above. As a small forwarder in Brazil, we decided to join an association called WNA, which is paying off. By the way, WNA is looking for new members, specially in South and Central America.
    The main issue for small forwarders, in my opinion, is the lack of trust. Most of us have been burned by other forwarders by not getting the correct buying rates. Also, some partners abroad look for their own convenience when consolidations are concerned or pick up services are necessary. Bottom line, we don’t get the best service, having the risk of losing the business. I also agree on the SEKO approach as the best option. Going to the market as one single company has good benefits before customers and becomes a great sales tool. My company, RWA has started a franchising type of partnership with even smaller companies or individuals in other parts of Brazil that have business but are not established as a company.

Leave a Reply

Your email address will not be published. Required fields are marked *