Forwarders warn shippers against rates that 'look too good to be true'
Forwarders are warning customers to be wary of rates being offered by rivals for the ...
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By Alex Lennane
Mid-sized forwarders have reported they are gaining customers at the expense of multinationals as Covid-19 forces companies to be more agile and responsive.
A survey published yesterday by Barclays/BOD on the state of logistics confidence notes: “Larger companies have generally found things more difficult than smaller ones, despite being more likely to benefit from a more diverse customer base, as they may have found it harder to adapt quickly to the changing market.”
Ligentia said it had seen a rise in customer numbers.
“This year we’ve seen a surge in businesses moving to mid-tier supply chain solution providers,” said Dan Gill, chief customer officer.
“Those providers with the flexibility to adapt quickly to customer requirements, alongside the ability to provide the very latest in digital technology, have experienced an increase in new business wins.”
However, he warned: “This is not the time to be complacent, the industry is facing probably the most challenging time most of us have ever experienced, meaning customer service is now key in retaining relationships. We are fortunate at Ligentia to have some of the very best talent working in our business, who have continued to show their commitment to delivering an outstanding service at such a difficult time.”
Meanwhile Brian Hay, chief executive of Cardinal Maritime Group said his ‘takeaway’ from 2020 was that “the mid-market companies … appear to have performed so much better for their clients than the multinationals”.
He explained: “We’ve had so many approaches from businesses that have been effectively abandoned by some of the industry’s leading names, unable to provide the flexibility and adaptability needed to navigate through this challenging environment.
“This will certainly change how many importers and exporters plan for 2021, with many likely to spilt their supply chain across multiple suppliers, which actually seems a sensible strategy right now.”
Loadstar Premium has also noted the trend. Meanwhile, several observers have pointed to high charges and costs using larger companies.
“[There have been] lots of sharp practices conducted by unscrupulous large companies,” claimed William McNally, MD of McNally Haulage. “Lots of these players offer a low-ball price on a basic job but then quickly add extras contained in the small print.
“What’s worse, more often than not they subcontract the loss-making job, keep a margin on that job and still add on their ‘additional fees’.”
Keith Gaskin, group commercial director of Seko Logistics, added: “It’s not in our nature just to roll over and not serve our clients, no matter how difficult the circumstances. It’s mid-size providers like ourselves that are nimble enough to change swiftly to the challenges and demands of this market.
“While we’re all competitors in a tough market place, companies like ourselves want the same thing – to keep our clients’ supply chains moving.”
Increased digitisation has also boosted the mid-tier industry.
“The rapid digital transformation across our industry has highlighted where certain businesses are falling behind, no longer having the ability to meet the changing requirements of more agile and complex supply chains,” explained Mr Gill.
“Companies like Ligentia had already anticipated those changes and began investing heavily in the very latest technology. The pandemic this year has forced businesses to adopt new ways of working, bringing new tech requirements to the top of every customer’s wish list, and where there are gaps our new virtual world allows those unsatisfied buyers to shop around quickly.”
And according to one freight recruitment executive, mid-sized forwarders are hiring more people.
“I’ve heard that the way some of the top 10 or so are treating their customers has been disgusting,” said New York-based Danny Barnes. “It’s been a great year for mid-size forwarders and we’ve seen that reflected in increased hiring.”
Another headhunter, Scott Williams, added: “This is apparent across many suppliers. The ‘big boys’ are not able to flex and adapt. It is the ones that stand up and be counted for their clients now that will reap the rewards in calmer waters.”
However, there are risks on the horizon, according to one mid-sized forwarder who said he could feel Maersk looming large in the market.
“We haven’t lost any customers yet,- but I suspect we will. Maersk will simply stop offering named account pricing to NVOs, or want tripartite deals.
“Remember a couple of years back, when they were saying this is the only way they would deal with a BCO was through a forwarder/agent?”
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