Major Differences Between Small and Large Freight Forwarders

Milad Nabi|Jul 21, 2022|No Comment

The Benefits Of Using A Small Freight Forwarder For Your Business

Selecting the ideal freight forwarder for their company is a crucial decision that all business owners must make. The entrepreneurs could run into several issues. These include the wide range of services available, the need to understand what they offer, and a strong desire to save money. The choice between small or large freight forwarders presents the most frequent conundrum. Are there any significant differences? Is the company size important? How do you make the best decision? These are just a handful of the many questions that business owners have.

The global supply chain depends heavily on the efficient and intricate mechanism of freight forwarding. For global supply chains to remain operational, both national and multinational freight forwarding services are essential.

In this video, La Chang, the CEO of TGL, explains the differences between a multi-national freight forwarder and a national/domestic freight forwarder, as well as which is best for your company.

What are the pros and cons of working with a multinational freight forwarder?

The multinational freight forwarders promise to satisfy all shippers. They claim they can handle shipments between nearly any two locations on the planet because of their facilities spread throughout numerous nations. 

Large forwarders can negotiate favourable rates with ocean carriers due to their high volume of shipments, and they then pass those savings along to shippers. Working with one of the multinationals may be your best option if you want to pay as little as possible for each container that travels across the ocean. Although, no single organisation can excel at everything. A forwarder that covers the entire globe is likely to provide excellent service in certain areas, sufficient service in others, and barely adequate service in others. You will be deeply dissatisfied if your partner's strengths don't suit your needs.

Furthermore, as we all know, the cheapest service is not always the best. Large freight companies might excel in moving large volumes of straightforward freight, quickly booking containers, and transporting them from port to port or door to door. They may not have the time or resources to assist with unique issues, especially if you are a smaller shipper who does not contribute much to their revenue. And, of course, the cheapest ocean rate does not always correspond to the lowest total transportation cost.

Where do smaller and domestic freight forwarders stand out?

Working with a seasoned, smaller freight forwarder like TGL may provide you with several tangible benefits:

Dedicated Solutions Specialist

From the moment you request a freight estimate until you receive an invoice, you only deal with one contact. You don't have to constantly explain what you need or ask the same questions to multiple individuals in different departments. And you won't have to worry about a critical detail falling through the cracks - for example, because the booking agent failed to transfer information to the documentation department.

Quick response 

When working with a large international freight forwarder, you may be transferred from one phone extension to another while looking for someone to respond to your concerns. You can put your key contact on speed dial when working with a domestic freight forwarder. If that person is unavailable, another expert will assist.

Employee Knowledge

Workers at large freight forwarders have vastly varied sets of knowledge about the transportation industry and international trade due to variances in employee responsibilities.

Consider the international shipping process to be a puzzle. To make the total thing work, all the separate components must come together in the correct order and at the right time. Employees at major freight forwarders are assigned to manage one or two of these pieces. This means that questioning the person who handles documentation about the customs clearance process is likely to result in some dandruff-inducing head scratching.

Smaller forwarders typically have staff members who are significantly more knowledgeable about a wide range of subjects related to their jobs.

Escalation Process

When every step goes according to plan, what distinguishes small freight companies from major freight forwarders? Probably nothing. But what about the all-too-common scenario in which things go awry? How do you contact the right individuals when you are aware that the person you've been dealing with lacks the authority to make an executive decision regarding a situation?

One of the most notable distinctions between small and large forwarders is possibly this process. Large freight forwarders have an escalation mechanism that is convoluted and ambiguous. Since management structures are considerably more vertical, it is uncommon for employees who interact with clients to also be able to make management decisions and make changes when there are problems. They likely aren't even aware of what must be done to make things right, thus they don't even have the authority to make these calls.

Small freight forwarders provide their staff members with the added advantages of departmental autonomy, control, and knowledge. Their logistics specialists have a broad range of information regarding any decisions, operations, and difficulties that may develop during a shipment because management structures are more horizontal and, there are fewer people per department. Furthermore, escalation is easy. Most likely, you are currently dealing with the best person to handle the situation; if not, they are just a phone call away.

Personalised service

Your freight specialist is equipped with the knowledge and competence to handle any problems that may arise. Would you like to reroute a shipment to avoid port congestion? Do you want to know how to save the cost of delivering oversize or heavy freight? Do you require a trucker with specialist equipment, even if space is limited? Your account representative at a large forwarder may spend days going multiple rungs up the corporate ladder seeking clearance to make any of that happen. That is, assuming it occurs at all. If you do not work for a large organisation, a large forwarder may be reluctant in doing anything other than getting your containers from Point A to Point B.

Industry Network

Large corporations frequently collaborate with other large corporations. The problem with this approach is that multinational freight forwarders behave similarly to other large corporations. When working with giant corporations, it is almost impossible to change the circumstances such as finding the correct individuals to speak with for urgent concerns, customising freight options, adjusting prices, and so many other things.

Small freight forwarders typically have extensive industry networks that include carriers, brokers, warehouses, distribution centres, and other forwarders of all sizes. This allows them the freedom and authority to develop creative solutions to meet the needs of a client.

Relationship

Business relationships are important. Strong business connections can be challenging for organisations that are responsible for managing hundreds or even thousands of clients. The time you spend on each client simultaneously diminishes as the number of clients you serve grows. Small and large freight forwarders differ significantly on this account. Although a lot of big freight forwarders try to get their agents to know their clients by name, the relationship between the client and the forwarder is regrettably tenuous.  Since multinational companies use a vertical management structure, to better serve clients, they can staff the lower levels with additional personnel. They may all get to know their clients by first names, but the staff have very little power to take advantage of that relationship in any way. As a result, you only have a kind voice on the other end of the line and no real business relationship.

Conclusion

Choosing a freight forwarder is a difficult decision. When it comes to tackling the assignment, you have two options: national freight forwarders or multinationals. While huge freight forwarders have the advantage of reputation and brand awareness, there are numerous red flags to be aware of before entrusting your business to them. When problems need to be escalated, it is challenging to get in touch with the relevant individuals due to their vertical management systems. Because there are more clients, there is less time to dedicate to each customer. Of course, huge corporations collaborate with big companies. If you're not a corporate behemoth, you are probably regarded as one of the thousands of crumbs at the bottom of their revenue funnel. So perhaps larger forwarders are too large for your business.

National freight forwarders like TGL can dedicate more time to their clients. Because each employee handles more than one piece of the puzzle, their logistics specialists are often more experienced than those major forwarders. And, of course, relationships are essential for smaller firms. Customers are the lifeblood of their business, and they strive to go above and beyond to retain those relationships.

At TGL, we offer international business to business logistics services, including sea freight, air freight, domestic freight, warehousing, and customs clearance to all industries. Get a quote today.
If you require further information about us and the services we provide, book a free no-obligation consultation session with our logistics professionals.