When it comes to international shipping, time and cost control are two of the key KPIs businesses track. Competitive sourcing in logistics requires a conscious effort on the part of the shippers and presenting valid, complete information to logistics providers is an important part of the process. Disclosing full cargo details in your RFQ (request for quotation) can go a long way in saving you the surprise costs and missed deadlines, so make sure you do not hold back any vital information from your freight broker.
1. Specify your forwarder's work scope
Get specific about what needs to be done. Do you require a point-to-point operation or door-to-door service? Is your cargo stackable? Are you willing to insure your high value cargo against all risks? Include all such details in your request for quotation if you are to avoid playing ping-pong and losing precious time. Being cryptic about basic cargo details works against the very goals you are trying to achieve: accurate quotes, cost predictability and a job executed with speed and precision.
2. Get your basics right in your quote request
Depending on the job scope and your contract with your customer, you may need to provide some or all of the following information to your logistics provider.
● Cargo origin. Indicate point of departure, including pick up address if you are requesting EXW services.
Cargo destination. Specify the delivery address if you would like your cargo to be delivered to door or to any point beyond the main hub or terminal.
● Commodity name and HS codes. By simply calling your goods "general cargo" you may end up with no quote or create an impression of someone who has no idea what they are about to ship (think about your broker's agent’s cousin flying by the seat of his pants).
● Cargo dimensions and weight. Providing the size and weight of each piece or package of your shipment saves time by taking the guesswork out of the process. In air freight, cargo size and weight often determine the carriers and routes to be used.
● Stackability. Cargo stackability is another crucial factor as non-stackable cargo is charged at different rates than stackable cargo so be clear about it early on.
● Delivery deadlines. Depending on your delivery deadlines, your logistics provider will help you choose the best shipping mode, route and carrier. Remember that carriers apply surge pricing and for "must-go" shipments, you have to pay a premium. It's a common practice among air carriers to offload shipments not labeled "express" or "priority" and prioritize consignments where shippers have paid a premium. So making your delivery deadline known helps your freight broker select a product that matches your schedule.
● Information about Dangerous Goods. You may be shipping DGR (dangerous goods) which require special handling. If this is the case, be sure to provide DG Class, UN number and a valid copy of MSDS. Hidden DG is a big problem in logistics and carriers and forwarders may face huge fines for failing to declare dangerous goods as such. It is also about the safety of vessels, crews and passengers, regardless of the shipping mode.
● Handling requirements. Shipment can be non-stackable, fragile, dangerous or require temperature control or special storage. Certain perishable items may require delivery within a limited transit time. Such special handling requirements may add to the freight cost.
● Value of the goods. In a world where carriers' liability has limits, you want to make known the value of your consignment. Unless you declare a special value for carriage, carriers will treat your shipment of gold bricks the same way as they treat clay bricks. Depending on the value of your cargo, your forwarder may advise you to take on a cargo insurance or declare a value for carriage.
3. Understand your trade contract and Incoterms
It's important to clearly understand the terms of your contract, including the applicable Incoterms. Employing the services of a freight forwarder to get your goods from point A to point B has nothing to do with your Incoterms responsibilities before your trade counterparty. For instance, even if you are shipping under CIF terms, your logistics provider is not responsible for insuring your cargo unless you specifically ask for it and are willing to bear the cost.
4. Be clear about shipping mode
Make it clear which transport mode you are looking at. For instance, air freight can be 10 or 15 times more expensive than sea freight while offering much shorter transit times and high levels of security. Consider your contract terms, value of your goods and delivery deadlines when choosing a shipping mode. As a rule of thumb, freight costs should not exceed 10% of the total value of your goods.
5. Present information in a clear format
Providing information in a standard tabular format or using bullet points to highlight key details will not only save time, but also speaks volumes about your ability to organize and present information in a professional manner. The messier your data is, the more time it takes your freight agent to untangle it or make sense of various bits of data strewn around various documents and pictures.
6. Disclose your shipping budget
Do not hesitate to disclose your shipping budget, especially if you already have competing offers from the market and looking to compare prices. Cutting straight to the target price shows you have done your research and are ready to make a decision. This helps your freight forwarder to shortlist the shipping options available to you and offer you something that matches your specific situation.
7. Ask for a quote close to shipping date
Quotes have validity dates and any price you get is good for a week at best. Carrier schedules change without prior notice and prices cannot be fixed for too long. Logistics is a volatile business - shipping schedules, and ultimately the price you pay for shipping, are dependent on weather conditions, crew availability, fuel price escalation, operating permits, availability of equipment and many other factors.
8. Provide feedback regardless of your decision
Regardless of your ultimate decision, providing honest, constructive feedback to your freight broker is important because it helps them improve their products and do better the next time. Simply walking away with information reduces your chances of receiving a quality offer in the future.
Remember that freight forwarders are extremely busy people do not drip feed information to your freight broker or hold back basic details when requesting freight quotes. Providing clear, detailed information about your shipment not only speaks to your professional attitude, but it also guarantees that you will receive a timely, accurate quotation for your shipment.
Xscale is a logistics and supply chain management company headquartered in Singapore. We operate out of our hubs in Singapore, Tashkent, Frankfurt and London, providing a complete range of logistics and procurement services to businesses around the world. We combine our global network, industry expertise and highly competent professionals to work alongside our customers and solve their supply chain challenges. Contact Us if you require any assistance.