What does strategic value look like from a freight forwarder?Sep 30, 2022
Freight forwarders and businesses have been working together since the 18th century – while much has changed in that time, it’s notable that the goal of the relationship between the two parties has stayed much the same. Freight forwarders move goods from origin to destination, then the client takes it from there. But what if there could be more?
The advent of digital tools has made it easier to track, analyse and improve supply chain performance, but many forwarders are still just focused on containers.
To understand more about the scope for strategic collaboration between freight forwarders and shippers we sat down with Zach White, VP of Customer Success at Zencargo on our weekly podcast Freight to the Point. Zach brings over 10 years experience in customer success at leading businesses such as Forrester and Cognism and aims to apply some of the same methodologies to helping shippers go beyond transactional freight value.
As supply chain continues to play a key role in not only enabling businesses, but driving competitive advantage, we explore the role that freight forwarders can play helping companies achieve key goals and outcomes.
From operational to strategic value
The traditional freight forwarder value model is largely operational – performing the necessary tasks to enable the customers’ business to function, whether that’s moving components for manufacturing or stock for stores. This is an essential function – if those components don’t arrive on time, a factory shuts down.
Accordingly forwarders have become experts at knowing the right carriers, routes and modes to get cargo where it needs to be. Once the shipment arrives at the destination, that value has been delivered. The reason forwarders couldn’t do more was that it was hard to get a holistic, accurate picture of what was going on in the supply chain to find improvements. But new technology has changed that.
‘In our role, we’re aware of the market, aware of the customer need for freight, but this is where we go that above and beyond that and really bring that kind of SaaS prescriptive model, which is really leveraging our platform to understand insights that our customers are doing and then taking those insights to deploy initiatives for our customers to change how they work with supply chain, and that ranges from a variety of different projects,’ explains Zach.
With technology now available to capture data points across the supply chain, from orders through manufacturing to destination, digital freight forwarders start asking new questions, such as:
- Is this the most efficient route for this product?
- How efficiently are we using resources?
- Is this method of shipping aligned with customer and commercial needs?
- Are we moving this in the most sustainable way?
These are the questions that take a freight forwarder relationship beyond simple operational enablement to strategic collaboration.
‘While most freight forwarders would just do that operational deployment, but we want to take that activity and use it to provide opportunities for our customers to really drive and change that outcome leveraging that digital side,’ says Zach.
Setting foundations for success
Strategic collaboration requires a foundation of reliable information to understand what’s going on in your supply chain, what can be improved and what the commercial impact will be. At Zencargo, the core of this is our own supply chain management platform which centralises, analyses and shares information from across the supply chain for relevant stakeholders.
Not only does this enable teams to see what’s going on in their supply chain, but they can also use this data to understand the impact of their supply chain on the rest of their business.
‘You’re not really changing how a company behaves if you’re just improving container utilisation,’ says Zach. ‘It’s really about getting them to understand container utilisation on [Zencargo’s] platform and tracking that, then looking at that as a cost saving initiative that they could bring back to their board, their CEO, in terms of what they’re doing to save the business money and drive better values, better outcomes for their business.’
In this scenario, container utilisation can be linked to the broader strategic goals of the business, such as reducing emissions through fewer containers, improving margins by reducing freight spend or improving packaging and ordering to improve freight efficiency.
At Zencargo, this approach to value is built into the way we work with customers – which is the whole purpose of Zach’s team. Each new customer goes through a flow designed to help us work closely with their team and help them achieve their goals:
- Customer onboarding: Working with each new customer to understand their existing processes, partnerships and needs, as well as their wider business goals.
- Technology implementation: Integrating their core systems and existing data with the Zencargo platform to create wider visibility of their historic performance and future plans.
- Strategic review: Assessing how their current supply chain is enabling the wider business, finding opportunities for improvement and setting concrete targets to be reviewed on a regular basis.
Tailoring strategies to shipper needs
Just as every business is different, supply chain goals vary widely with product type, target market and target metrics. The goal of customer success and a successful strategic relationship is to enable the business to align supply chain performance with commercial success across the business.
‘Looking at an industry like furniture, we focus on efficiency gains and cost because, generally speaking, furniture’s low margin in comparison to something like cosmetics…With a lot of beauty companies and cosmetics, cost is still going to be important, but there’s also a lot of room for things like sustainability,’ says Zach.
‘For customers used to working with a regular freight forwarder to save some cost, we now hear them say, “I’ve improved our lead times here.” It shows what supply chain can bring to a business and how much it allows you to adapt to an ever-changing market, ever-changing economy.’ says Zach.
‘If that’s not at the top of a company’s list, they’re missing out on a really easy trick to move the needle for how they perform.’
Building value-led relationships
As the freight market evolves, so too must the relationships between forwarders and shippers. In a digital world, shippers need to demand more from their partners, going beyond operational enablement to deliver measurable, strategic value.
Zencargo’s digital freight forwarding service puts your business goals at the heart of our process, tailoring every step of your supply chain to give your business the flexibility, control and insight it needs to adapt to the needs of the moment. If you want to find out more about how we work with customers or discover case studies of real businesses that we’ve helped, get in touch with our team today.
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