The shipper-freight forwarder interface is a critical point in the supply chain that seems to be plagued with more than its share of misunderstandings and disagreements. Yet practitioners on both sides of the fence recognize the importance of good communication to a successful business relationship, and they have consistent ideas about how to make those relationships more efficient and professional.

Generally speaking, there are three main stages of shipper-forwarder communications: courtship, or getting to know each other; work-in-progress, or establishing operations strategies; and maintenance of a relationship through continual updates. Experienced participants in shipper-forwarder dialogues also say that how they communicate is important, and that different modes of contact should be employed for different situations.

Both shippers and forwarders agree that the most important round of conversation may be the one that determines whether the two parties should be talking at all.

There is a tendency in early negotiations for the shipper to focus on price and the forwarder to promise whatever is needed to close the sale, without either one knowing enough about the other. That approach isn't helpful to either party, say forwarder executives.

"Freight forwarding is a service, and understanding the shipper's business should be the number one consideration in the relationship," observes Ron Jones, manager of account services at OIA Global Logistics Inc. in Portland, Ore. "The forwarder has to understand the shipper's logistics cost model, and the shipper has to know what the forwarder's capabilities actually are."

A red flag should go up if a freight forwarder doesn't make that kind of information a priority. "A shipper should find out what the forwarder's attitude and credentials are," recommends Tom Case, CEO of Camelot Co., a freight forwarder based in Schiller Park, Ill. "Is the forwarder only interested in how many pieces, their weight, and destination, or does he ask first about the business in general and then the contents and the nature of the shipment? The shipper has to explain his business needs if he's going to find the right forwarder."

For a shipper-forwarder relationship to be a good match, both parties need to ask many questions and give honest answers to inquiries such as:

• What is the nature of the shipper's product, including special handling characteristics?
• What is its shipping history, including any misadventures?
• What are the shipper's logistics cost requirements and restrictions?
• Does the shipper understand the Customs and Export Administration rules that apply to the product?
• Is the forwarder properly licensed by the government and certified in regard to cargo security?
• Does the forwarder have experience with this specific type of cargo?
• What kind of tracking capabilities does the freight forwarder have? Can it provide proof of delivery, and how does it communicate emergency-related intelligence?

Smaller shippers and forwarders often exchange this kind of information in personal discussions, while larger companies typically rely on a written request for proposal (RFP). Even shippers that use RFPs, though, need to meet prospective forwarders in person and tour their facilities. "Electronic bid proposals are turning transportation transactions into a commodity auction," says Phil Alling, manager of import-export operations at Atlanta-based Lanier Worldwide Inc., a subsidiary of Ricoh Corp. "The first meeting should be person-to-person so you can evaluate the prospective partner's operational environment and see what their procedures, policies, and personnel are like. And don't be afraid to ask questions to see if their people know their stuff," he adds. Continued...

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