Has your organization been considering launching a freight forwarding business? If so, it can be challenging to realize and understand where to begin. Fortunately, companies can launch a successful forwarding company by following these three best practices and learning from existing logistics startups.
1. Get a Strong Understanding of International Laws
Unlike most brokers or domestic carriers, freight forwarders play a vital role in international trade. That means freight forwarders need to understand all applicable international laws governing trade and transportation. A successful forwarding business always considers all applicable Incoterms, liabilities, and legal ramifications. Unfortunately, it can be challenging at best. Consider this. According to Supply Chain Canada, “It can be frustrating to start a business that you’ve no idea about. For great success in freight forwarding, [new business owners must] study the industry. There’re various procedures and parameters involved. You’ll need to have an extensive understanding of international law. You also need to know the financial aspects of trading. Most importantly, you must learn the trade practices and theories.”
2. Exponentially Build Your Network
The second crucial step for launching a successful forwarding business goes back to the basics of logistics. Successful forwarding business startups have a broad, diverse, and continuously growing carrier and client base. A more extensive network should also increase exponentially. For example, when onboarding a new carrier, consider offering to assist other partnering businesses in accessing additional forwarding services. That may include small and mid-sized businesses (SMBs), third-party logistics service providers (3PLs), and other brokers. As the network expands, each new partner should bring in additional partners through word-of-mouth and interaction referrals. Of course, it is imperative to understand that not all business partners will reveal other contacts or contracts due to applicable privacy laws, non-disclosure agreements, or trade secrets. It’s all subject to continual change. However, practical work as a forwarder will inevitably lead to new opportunities to expand your network. The key lies in recognizing those opportunities when they arise.
3. Leverage a Digital Freight Forwarding Platform
The difference between extraordinarily successful and prosperous freight forwarders falls on volumes and profitability. As the volume of freight moved increases, profitability increases. The same applies to identifying the most profitable, lucrative moves. And by combining those characteristics with digital freight matching capabilities, the modern forwarding business is well poised for success. Therefore, leveraging a digital freight forwarding platform within your operation is crucial. After all, a digital freight forwarding platform offers these core benefits:
- Real-time access to available loads, capacity, carrier networks, and more.
- Automated notifications to identify at-risk moves and those that will become subject to a likely risk, such as moving freight during the winter.
- Sharing data in real-time with applicable trading partners, which builds collaboration.
- Streamlined document and data storage to reduce delays, shorten the payment clock, and enable a faster time to ROI for all bookings.
Realize the Benefits of a Successful Freight Forwarding Business With an Experienced Partner and Competitive Forwarding Platform
The best-laid plans for launching a forwarding business will fail when a company overlooks digital transformation. In today’s age, digital transformation is an absolute necessity. And while companies should follow the offer mentioned tips, it is equally important to find and implement an easy-to-use resource, such as Cargologik’s platform. Sign up for Cargologik online to get started.