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Please map the freight forwarding customer journey. I'd like to understand all of the major milestones and touch points that a customer experiences throughout that process (i.e. From identifying and hiring a freight forwarder, to monitoring one's own supply chain and shipments, to receiving invoices).
Hello! Thanks for your question, "Please map the freight forwarding customer journey. I'd like to understand all of the major milestones and touch points that a customer experiences throughout that process (i.e. From identifying and hiring a freight forwarder, to monitoring one's own supply chain and shipments, to receiving invoices)."
The most useful sources I found to answer your question were Supply & Demand Chain Executive article, and Inbound Logistics article.
The short version is that the freight forwarding customer journey begins with identifying and hiring a Freight Forwarder, followed by monitoring one's own supply chain and shipments, and ending with receiving and paying invoices. All these have several milestones, which have to cleared for a successful journey.
Below you will find a deep dive of my findings.
METHODOLOGY
A comprehensive search was undertaken, which yielded several sources. The sources included government sites, industry sites, and news sites. Data was collected from the sources and duly analyzed in order to develop an outline of the customer journey related to freight forwarding services. Milestones and touch points along the journey were identified, along with suitable illustrative examples, wherever possible. Thereafter, the analysis was organized in paragraphs to facilitate easy readability. This analysis begins with the paragraph, "Identifying and hiring a Freight Forwarder", and ends with the paragraph, "Conclusion", which concludes this study.
IDENTIFYING AND HIRING A FREIGHT FORWARDER
According to a Supply & Demand Chain Executive, Jan 2017 article, the following should be noted for selecting a Freight Forwarder:
1. Being clear about the shipping and storage needs.
You should know the average volume of your shipments. This would determine which mode(s) of transportation it would need, and the type of services you would require from the Freight Forwarder.
2. Researching Freight Forwarders.
- Once you know what you need, you can research online or offline, to see who can provide the services.
- You may also ask your friends, or business associates, for recommendations, if they have used the services of any Freight Forwarders.
- See the terms and conditions. These are legally binding and even though they may be in fine print, yet they should be read and understood in full. Examples are:
- A glossary of shipping terms should also be read, to understand the industry accepted meaning of the terms. For example, the Emerald Freight Express Glossary may be read.
- A service guide of the Freight Forwarder should be read. For example, the FedEx service guide may read.
3. Assessing the selected Freight Forwarder.
- Once you find a freight forwarder, who can meet your requirements, you have to check the freight forwarder's credentials and experience. This is to ensure that the freight forwarder is capable of doing the job.
- While forwarding goods, problems might arise, like shutdowns, strikes, custom clearance requirements, or rerouting cargo. You need to be sure that the selected freight forwarder has the necessary experience, to handle any sort of problem that may arise.
4. Checking whether the Freight Forwarder has the Freight Broker Surety Bond (BMC-84) or not.
- Freight forwarders are legally obligated to obtain a Freight Broker Surety Bond (BMC-84). This is also known as Transportation Broker Bond, or Interstate Commerce Commission (ICC) Bond, or Property Broker Bond.
- "Freight Broker Bonds (BMC-84) are necessary for operation as a transportation broker in the United States, and are regulated by the Federal Motor Carrier Safety Administration (FMCSA). The bond demonstrates financial responsibility of a broker, guaranteeing payment to motor carriers and shippers if a broker fails to comply with its contracts and agreements."
- This bond is a guarantee for your compensation, in case the freight forwarder runs into trouble.
5. Finding out about the network of the Freight Forwarder.
- To deliver goods, Freight Forwarders need to have good connections with other transportation companies and freight forwarders. It should have a wide network and several carrier contracts. The more number and types of carrier contracts the freight forwarder has, the more safer are its operations. Being proactive in asking essential questions to the Freight Forwarder, is helpful for the customer.
6. Finding out the professional associations of the Freight Forwarder.
- Besides being connected to a large and wide network, well-known Freight Forwarders are also members of several professional associations, trade associations, or other network circles. Membership to these bodies can be obtained after the Freight Forwarder has proved its financial strength, operational efficiency and legitimacy, and professional approach. For example, being a member of WCA makes any Freight Forwarder proud.
7. Performing a mock customer service test of the Freight Forwarder.
- If your shipment is faced with a problem, then you have to interact with the customer service department. Hence, before finalizing on the Freight Forwarder, try to converse with the customer service, to find out its level of service quality. You may ask a question, and if you have to wait in line, or if you need to speak to few people to get your answer, then you may find the service to be troubling or difficult.
- It is generally better to choose such a Freight Forwarder who has an excellent customer service department, so that in a time of crisis, you are not delayed on getting crucial information.
Taking care of the above seven points, can result in choosing a reliable Freight Forwarder for domestic purposes.
American Export Lines offers 10 tips for choosing a Freight Forwarder for international purposes, which may be read for further reference.
MONITORING ONE'S OWN SUPPLY CHAIN AND SHIPMENTS
As the shipments travel through the supply chain, they can be monitored by tracking them. For example, FedEx allows tracking by a unique Tracking/Reference number, using FedEx® Tracking, or FedEx InSight®, or by email. It also provides a proof of delivery via an online letter or fax.
Similarly, UPS also offers various ways of tracking shipments. For example, shipments can be tracked by email, by reference number, by seeing the tracking history, or by other enhanced tracking features.
With constant regulatory changes, many Freight Forwarders are struggling to keep up with the changes. "At risk of compliance failures in their physical supply chains, many U.S. exporters and importers complain about their inability to manage freight forwarders and customs brokers effectively. [...] In the current economy, in which many companies are struggling to grasp regulations and keep up with requirements, there is a tendency to place the onus on freight forwarders, making them responsible for classification, reporting, accuracy, and record keeping. [...] Even in this economy, do not let cheap rates and low logistics costs wrongly influence your choice of freight forwarder. You get what you pay for."
Industry experts suggest as follows:
"- choose no more than two or three freight forwarders, as managing multiple forwarders requires more manpower and can ultimately create more problems than it solves.
- put in place a Power of Attorney (POA) with each authorized forwarder, clearly defining its role and responsibilities in your supply chain. However, limit POAs, written authorization, or signed authorization granted to agents, to the bare minimum as required by law. The more POAs and authorizations you give to forwarders, the harder they are to manage.
- establish and maintain clear communication guidelines. Creating and maintaining an open dialog with your freight forwarder is vital.
- be sure the communication process includes prior notification of shipments. For exports, use a Shipper’s Letter of Instruction or its equivalent to ensure that shipment details are communicated clearly and accurately.
- get a complete copy of the transaction. A common complaint from exporters and importers is that they are unable to get a copy of their shipping records.
- audit documents after receiving them. The audit doesn’t have to be complete, but your compliance department should establish a threshold to maintain a good compliance rating.
- maintain strict controls on Automated Export System (AES) filings. To avoid mistakes, it’s best for the exporter to directly file AES.
- know your responsibility in the transaction. Too often, companies are identified as exporter of record without their knowledge. Regardless of terms of sale, under the various U.S. export regulations, all parties remain liable for compliance.
- make compliance your business. You know your transactions better than anyone. A freight forwarder will never be able to effectively run your compliance program, and you cannot outsource liability.
- qualify your own transactions. Don’t let forwarders qualify your transactions for preferential trade agreements.
- ultimately, the importer or exporter is responsible. It’s much harder to avoid an accident if you are a passenger instead of the driver. To effectively manage your freight forwarders and brokers, be the driver in your compliance department. Be an active participant in your account. Know the regulatory requirements. When you take control, the ever-changing and evolving compliance world— including freight forwarders— becomes much more manageable."
RECEIVING INVOICES
Almost all reputed Freight Forwarders provide billing and payment options. For example, UPS provides weekly bills that can be paid weekly or monthly. It also offers options for selecting the payer, managing inbound charges, and providing consolidated payment plans. Similarly, FedEx offers billing and payment options via Electronic Funds Transfer (EFT), phone, mail and email. Likewise, DHL offers hybrid e-Invoicing and e-Billing solutions.
DIFFERENT/ CRITICAL SCENARIOS
A different situation may be when a customer sends an RFP (Request For Proposal) to freight forwarder vs. customer sets up retainer payment system with freight forwarder. If a customer asks for a RFP then the customer gets a detailed proposal, as asked. If a customer sets up a retainer payment system, then the freight forwarder is assured of the shipments and can offer timely services. If a comparison is attempted, then it may be assumed that a retainer payment system is more beneficial for the customer, as it reflects more trust in the abilities of the Freight Forwarder, who in turn provides prompt and efficient services.
A critical scenario generally occurs, when a shipment is not delivered, is lost, is misplaced, is stolen, or is damaged. These events give rise to customer complaints, which may or may not be handled with care. Customers are known to complain about Freight Forwarders regarding:
- Rude and unhelpful customer service
- Lack of care in handling goods and merchandise
- Delivery delay without any notice
- Threatening customers"
CONCLUSION
To wrap it up, this analysis concludes with the following insights:
1. The freight forwarding customer journey begins with identifying and hiring a Freight Forwarder, followed by monitoring one's own supply chain and shipments, and ending with receiving and paying invoices.
2. While identifying and hiring a Freight Forwarder, the major milestones are: being clear about the shipping and storage needs; researching Freight Forwarders, their terms and conditions, and other required documents; assessing the selected Freight Forwarder; checking for the Freight Broker Surety Bond (BMC-84); finding out the network; the professional associations; and undertaking a mock test of the customer service provided by the Freight Forwarder.
3. Almost all reputed Freight Forwarders provide tracking services for monitoring one's own supply chain and shipments, along with flexible billing and payment options.
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