10 March 2009 authored by Gen Wright – For any business that deals with International suppliers or customers, there is a high chance that sooner or later, the services of a freight forwarding company will be hired.
Such services are hired to transport large number of cargo from one shipping port to another.
For example, if you are in the business of selling furniture, you may need to import containers of furniture, or export some products to customers from overseas who made purchases from you. In this case, you must be very familiar with port pricing.
Port pricing is very important because it affects the profit margins of the business. This happens in 2 ways. The first way, which is the more obvious way, is the cost involved. Pricing may differ even though shipments may be leaving the same port, and arriving at the same destination. That is because the services are run by different freight companies. It’s up to them to decide on a pricing point. Some may decide to charge less as a business strategy to acquire more customers, while others may choose to charge more upfront so as to provide higher quality service. But usually, because price is very sensitive in this industry, the difference is often negligible.
In addition, different freight companies service different shipment routes. For instance, one company may ship to Singapore, while another doesn’t. That means you have to need to hire different freight companies, depending on where your shipment is going.
The second way a freight company can affect your business is reliability. A shipment needs to be handled by responsible personnel. The cargo has to be tracked to ensure that everything goes smoothly. Otherwise, a shipment could be delayed. When that happens, money is lost. Sometimes, a shipment may even be delayed for weeks. There are different elements that may delay a shipment. For example, a staff could get the departure time wrong, or the containers fail to be loaded on the ship on time.
Delays affect the business adversely because whenever a transaction is made, especially with companies overseas, it is always based on trust. Without trust, it is impossible to have any kind of International trade. What if a business received an order from a customer, and then placed an order for a large shipment, only to discover that the shipment will arrive late?
As you can imagine, the consequences can be disastrous. If there is a time sensitive contract in place, there may even be a breach of contract, leading to more losses.
To avoid undesirable consequences, always try (as much as possible) to work with freight companies with a proven track record. I.e. Been in the industry for years, good reputation, etc. You can always make a search online for freight company contacts.
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