Quality independent forwarders are fighting back against ‘rogue’ networks by forming their own association. In a two-pronged attack, they are hoping to lobby the logistics industry as effectively as the multinationals, while also ensuring they are not perceived to be at the ‘seedy’ end of the business.
The Elite association, which launches today, counts members including the WCA Family, Global Logistics Network, Lognet Global and Universal Freight Organisation. Combined membership of the Elite networks comprises more than 3,550 freight forwarding companies, with annual revenues of some $60 billion.
“We want to separate out the rogue networks from the quality networks,” explained Dan March, head of communications for the group. “It doesn’t do any network any good to get mixed up with the seedy end of the business. We get two or three complaints a day about bad forwarders.”
Over the past two to three years, forwarder networks have sprung up around the world, promising – among other things – financial security for members but lacking the ability to pay out if needed. Several networks have been highlighted on websites such as the Ripoff Report and Freight Deadbeats, warning other businesses to avoid them.
“We are still competitors, so we are not looking to share commercial activities, but we will share information on bad companies, and if there is something of value to our members that we can share without compromising competition, we will do so,” said Mr March.
The association also aims to give independent members a louder voice in the logistics industry. With organisations such as Fiata often charged with listening only to the multinationals, the independents need a way not only to be heard but also to influence decision-making.
This is particularly acute in the air freight business, where independents have struggled to engage with airlines, and have been sidelined on discussions such as e-freight.
“The independent sector has specific challenges that the multinationals don’t,” explained Mr March. “Both on the ocean and air side we need to be more involved in the transfer of data, Customs documentation, security, and the process of implementing industry standards. Independent forwarders don’t have the means to influence this alone but they want to be included in the discussions.”
One of the first ports of call for Elite will be the Global Air Cargo Advisory Group (Gacag), the two-year old body that comprises organisations from across the air freight industry. Last year cargo handlers formed a new group to give themselves a seat at the table, and it seems likely Elite will become an associate member. Des Vertannes, IATA’s head of global cargo, has welcomed the initiative.
E-freight is one key area which has left some of the smaller forwarders behind. IAG Cargo last week said it was hoping that some 30% of air waybills next year would be handled electronically, but managing director Steve Gunning admitted that this was the low-hanging – for which read “multinational” – fruit, and that the other 70%, from smaller independent forwarders, would be harder to achieve.
Once Elite is able to join the discussions, it will not only be able to explain the challenges for members but also help shape the discussions – and planned processes.
Recently, independent networks have also been attempting to appeal to individual airlines. The WCA Family agreed a deal with Eithad, while GLN recently signed an MoU with IAG Cargo. But many airlines still seem to be reluctant to work with independent forwarder networks, despite the business they collectively bring to the table. “This is a pathway for airlines to reach out to forwarders, who would normally never get to see an airline representative,” said Mr March.
Already several other networks have asked if they can join Elite, which has a strict membership criteria to maintain its position as a stamp of quality. Members need to show evidence of strong financials, two years in business, dedicated full time staff, a registered office in the network’s name, a strict vetting procedure for members, proof of a dispute resolution process and at least 80 members across all continents.
“Every network works in a slightly different way,” acknowledged Mr March. “The financial guarantee could be achieved through cash in the bank or insurance – but we need to know that networks have paid out to members as promised. We will look at each new application on an individual basis.”
