How to Stay Competitive in a Crowded Freight Forwarding Market

Key Takeaways

• These days, having a strong online presence can make or break a business. FAQs can be a great way to proactively address questions from potential customers, and they double as great SEO content as well.
• Providing superior customer service to modern shippers goes beyond being friendly and helpful: the more you can help them help themselves with online shipping, tracking, and payment services, the happier they’ll be – and the fewer calls and emails you’ll have to manage.
• One way to differentiate your freight forwarding business is by developing niche specializations. This can involve focusing on specific industries or regions, such as pharmaceuticals, reefer (refrigerated cargo), or the Caribbean market.

In this industry, larger forwarders and 3PLs take up a lot of space due to their economies of scale, global reach, and ability to negotiate lower prices with carriers. However, smaller and mid-size forwarders have found ways to compete with these larger players by focusing on niche markets, providing more personalized service, and leveraging technology that enables them to do more with fewer resources.

For example, smaller forwarders may specialize in specific trade lanes or modes of transportation, such as air or sea freight, and offer tailored solutions to meet their customers’ unique needs. Some may cater to a specific market niche, like fine art, medical supplies, or produce, that may require specialized handling, shipping, warehousing, and customs clearance processes.

In addition, smaller forwarders can leverage technology to streamline their operations and improve their service offerings. For example, many forwarders are investing in transportation management systems (TMS) or specialized freight, shipping, and warehousing software to automate processes, provide real-time tracking and visibility, and improve communication with customers. However, smaller forwarders also face additional challenges, such as limited financial resources, lower bargaining power with carriers, and higher operational costs due to lower volumes.

Overall, the freight forwarding industry is highly competitive, with smaller and mid-size forwarders finding creative ways to compete with larger players. While larger forwarders and 3PLs continue to dominate the market, smaller players are making significant inroads and are expected to continue to grow in the future.

How Small and Midsize Forwarders can Stay Competitive

Build a Strong Online Presence

In today’s digital age, having a robust online presence is essential for any business. A website is an excellent way to showcase your services, experience, and credentials. Make sure your website is well-designed, easy to navigate, and mobile-friendly. In addition to detailing your range of services, your website should also have high-quality content, such as blog posts to draw in organic search traffic, case studies that demonstrate your value, and client testimonials (what marketers refer to as social proof). FAQs can be a great way to proactively address questions from potential customers, and they double as great SEO content as well.

Focus on Customer Service

Excellent customer service is critical in the freight forwarding industry. You should aim to provide exceptional service to your customers to differentiate yourself from your competitors. Respond to queries promptly, keep your customers informed about the status of their shipments, and be proactive in addressing any issues that arise. Providing superior customer service to modern shippers goes beyond being friendly and helpful: the more you can help them help themselves with online shipping, tracking, and payment services, the happier they’ll be – and the fewer calls and emails you’ll have to manage.

Offer Competitive Pricing

Pricing is an essential factor for customers when choosing a freight forwarding service. You should research your competitors’ pricing and ensure that your rates are competitive. However, be careful not to underprice yourself as this can be unsustainable in the long term. Using rate management software that digitizes and centralizes all your rates and gives you full visibility of quote performance and margins can help you ensure your business remains profitable amidst rate fluctuations and that you can provide the best value for your customers.

Build Strong Relationships with Your Customers

Building strong relationships with your customers can help you retain their business and gain referrals. You should aim to establish a personal connection with your customers and go the extra mile to exceed their expectations. This can involve offering tailored solutions, providing value-added services, and regularly checking in with them to ensure their satisfaction. Specialized logistics CRM (customer relationship management) software can also be helpful in enabling a seamless customer experience across multiple departments in your organization, from sales to operations and accounting.

Embrace Technology

The logistics industry is rapidly evolving, and technology is playing an increasingly important role. By embracing technology, you can streamline your operations, increase efficiency, and provide better service to your customers. You can leverage tools such as specialized customs compliance solutions, customer relationship management (CRM) software, and tracking and tracing solutions to enhance your service offerings. One of the fastest-growing types of software for freight forwarders is digital forwarding, or online freight portals, that allow established forwarders to offer an online presence to their customers for quotes, shipments, visibility, payments, and more.

Develop Niche Specializations

One way to differentiate your freight forwarding business is by developing niche specializations. This can involve focusing on specific industries or regions, such as pharmaceuticals, reefer (refrigerated cargo), or the Caribbean market. By positioning yourself as an expert in a particular area, you can attract customers who value specialized expertise and experience.

Expand Your Service Offerings

Offering a broad range of services can help you stand out from your competitors and meet the diverse needs of your customers. In addition to traditional freight forwarding services, you can offer value-added services such as warehousing, packaging, last-mile delivery, and customs brokerage. This can help you provide a comprehensive solution to your customers and increase your revenue streams.

In conclusion, the freight forwarding industry is becoming increasingly crowded, and standing out can be challenging. However, by implementing the strategies outlined above, you can build a competitive edge and attract new customers to your business. By focusing on building a robust online presence, providing exceptional customer service, offering competitive pricing, building strong relationships with your customers, embracing technology, developing niche specializations, and expanding your service offerings, you can stand out in a crowded market.