Executive Briefings

From the Top: Price-Cutting Isn't the Only Way That Forwarders Can Beat the Competition

Logistics managers have recently experienced their annual high anxiety moments as carriers completed the general rate increase reviews this spring. Profit margins in the logistics services business are thin enough so when an NVOCC/forwarder absorbs a carrier cost increase to retain customers they may be jeopardizing their long-term health. Getting the best rate from a carrier often depends on factors beyond the control of an NVOCC. But there is another way for companies to stay competitive that does remain under the control of the forwarder/NVO, according to Marcia Dorer, Director of Business Services with Silver Bullet Technologies. "Extraordinary customer service" she says, is a critical challenge to logistic operators today. They must be much more proactive keeping their clients up to date. The ability to provide "quicker, more accurate information allows tighter management of supply chain events and therefore risk. Few companies can achieve that goal with existing systems, however. Those who try must maintain an army of customer-service representatives (CSRs), to manually ferret out critical information on shipments and relay it to customers immediately. For most forwarders, that conventional approach is being rendered obsolete by disruptive technology changes being applied to business processes."At a good forwarder, a CSR spends on average two to four hours a day preparing those detailed reports," Dorer says. "The reports are essential otherwise, they will lose the customer." While the information needs to be current, its retrieval and presentation is often accomplished with archaic processes. And, the internet is no magic substitute for that demanding level of service. Larger shippers who engage several forwarders in their supply chains will not settle for a spruced-up website with basic status information. Their businesses demand regular, accurate, customized reports--possibly twice a day--that detail all of their freight activity in an easy-to-read format. Ideally, the information will be color-coded to highlight important events in different contexts across the same data. Further, real-time alerts allow forwarders to get problems in front of shippers as they occur, so that corrective action can be taken as soon as possible. Smaller shippers might be content with access to websites that offer status information, Dorer says; "but this is really not customer service, it is self-service." In these cases, new business software systems written to leverage the evolving global communications infrastructure are offering a new and efficient way for NVO's, forwarders and other logistics service providers to meet the demands of shippers for accurate, instant updates. In the long run, she adds, forwarders and NVO's may exercise better control over margins once customers discover that the new level of service made possible by state-of-the-art systems is indispensable. Eventually, of course, that capability may be matched by competitors and leading providers will have to reach for an even higher level of quality. But that situation is preferable to the price wars that threaten the existence of all but the most powerful logistics providers.
http://www.silverbt.com

Logistics managers have recently experienced their annual high anxiety moments as carriers completed the general rate increase reviews this spring. Profit margins in the logistics services business are thin enough so when an NVOCC/forwarder absorbs a carrier cost increase to retain customers they may be jeopardizing their long-term health. Getting the best rate from a carrier often depends on factors beyond the control of an NVOCC. But there is another way for companies to stay competitive that does remain under the control of the forwarder/NVO, according to Marcia Dorer, Director of Business Services with Silver Bullet Technologies. "Extraordinary customer service" she says, is a critical challenge to logistic operators today. They must be much more proactive keeping their clients up to date. The ability to provide "quicker, more accurate information allows tighter management of supply chain events and therefore risk. Few companies can achieve that goal with existing systems, however. Those who try must maintain an army of customer-service representatives (CSRs), to manually ferret out critical information on shipments and relay it to customers immediately. For most forwarders, that conventional approach is being rendered obsolete by disruptive technology changes being applied to business processes."At a good forwarder, a CSR spends on average two to four hours a day preparing those detailed reports," Dorer says. "The reports are essential otherwise, they will lose the customer." While the information needs to be current, its retrieval and presentation is often accomplished with archaic processes. And, the internet is no magic substitute for that demanding level of service. Larger shippers who engage several forwarders in their supply chains will not settle for a spruced-up website with basic status information. Their businesses demand regular, accurate, customized reports--possibly twice a day--that detail all of their freight activity in an easy-to-read format. Ideally, the information will be color-coded to highlight important events in different contexts across the same data. Further, real-time alerts allow forwarders to get problems in front of shippers as they occur, so that corrective action can be taken as soon as possible. Smaller shippers might be content with access to websites that offer status information, Dorer says; "but this is really not customer service, it is self-service." In these cases, new business software systems written to leverage the evolving global communications infrastructure are offering a new and efficient way for NVO's, forwarders and other logistics service providers to meet the demands of shippers for accurate, instant updates. In the long run, she adds, forwarders and NVO's may exercise better control over margins once customers discover that the new level of service made possible by state-of-the-art systems is indispensable. Eventually, of course, that capability may be matched by competitors and leading providers will have to reach for an even higher level of quality. But that situation is preferable to the price wars that threaten the existence of all but the most powerful logistics providers.
http://www.silverbt.com