Forwarders must ensure goods are delivered within the agreed timeframe. This requires coordination with various stakeholders, including carriers, customs authorities, and other intermediaries involved in transportation process. Companies can enhance their on-time delivery and gain a competitive edge in the market.
Performance is a critical factor for forwarders as it impacts the profitability of companies. Delivery delays can disrupt supply chains, result in loss of sales, increased inventory carrying costs, and damaging customer relationships. Forwarders must prioritize performance and flexibility in operations and strive to improve them.
Key predictors of performance for the forwarding companies are as follows:
Service quality: Service quality is a predictor of performance for forwarder firms. It encompasses aspects such as responsiveness, reliability, and assurance. Forwarders consistently delivering high-quality service are more likely to satisfy customers and differentiate themselves in a competitive market. By investing in the training and development of their staff, adopting advanced technologies, and implementing robust quality assurance processes, companies can enhance their service quality and improve overall performance.
On-time delivery: Delivery on time is a crucial performance indicator for the companies. Timeliness is paramount as it affects the forwarders’ operations and customer satisfaction. Freight forwarding companies must ensure that goods are delivered as promised and within the agreed timeframe.
This requires effective coordination with various stakeholders, including carriers, customs authorities, and other intermediaries involved in the transportation process. Companies can enhance their on-time delivery and gain a competitive edge in the market by closely monitoring transit times, optimizing routes, and implementing contingency plans for unforeseen events.
Flexibility in operation: Flexibility in operation is another predictor of performance for the forwarders. Adapting to changing customer requirements and market dynamics. Freight forwarding companies that can quickly accommodate last-minute changes, and provide customized solutions are more likely to succeed. By investing in agile systems and processes, fostering a culture of innovation, and maintaining strong relationships with partners and suppliers, companies can enhance their flexibility in operation and drive performance excellence.
Cost of services:
While cost is not the sole determinant of performance in the industry, it is a vital factor that cannot be ignored. Customers expect competitive pricing without compromising on service quality and reliability. Forwarders must strike a balance between cost optimization and value creation. By adopting lean practices, leveraging economies of scale, and explore cost-saving opportunities, firms can streamline their operations and offer cost-effective solutions. It is crucial, therefore, to ensure cost-reduction efforts do not compromise service quality or lead to service failures.
Value-added services: Value-added services play a significant role in driving performance for forwarders. These services go beyond the core transportation activities and provide customer benefits. Value-added services include warehousing, packaging, customs clearance, insurance, and supply chain consulting. By offering a comprehensive range of value-added services, the companies can differentiate themselves in the market and increase revenue streams. It is essential, however, to carefully assess the market demand, invest in the necessary infrastructure and capabilities, and ensure the profitability of these value-added services.
Measuring performance: Measuring freight forwarding company’s performance requires appropriate key performance indicators (KPIs) and metrics. These metrics should align with the company’s objectives and reflect stakeholders’ expectations.
Commonly used performance indicators in the industry include delivery on time performance, cost per unit of transported goods, error rates in documentation, and employee productivity. By monitoring and analyzing these performance metrics, companies can identify areas for improvement, track their progress, and benchmark themselves against industry standards and competitors.