Why Some Companies Fail When Choosing a Freight Forwarder: Price vs. Service

LAC Team


Updated: December 08, 2021

What’s more important to you when choosing a freight forwarder, low price, or good service? A freight forwarder is more than just a shipping company. The complexity of shipping cargo internationally requires knowledge and experience dealing with different aspects of the supply chain. A well-versed freight forwarding company can offer various services besides transport, and most importantly, they guarantee you the peace of mind you need.

“The bitterness of poor quality remains long after the sweetness of low price.”, Benjamin Franklin

This article will give you a clearer understanding of why you should always opt for service over price when contracting a freight forwarder.

Good freight forwarding service is priceless

Cutting costs is essential for every business—but beware! When it comes to freight forwarding services, basing your choice on price alone could backfire.

A North-American manufacturer was recently looking for a freight forwarding service to move their plant from Mexico to the USA. This was not an easy project; it required precise coordination and sufficient truck availability. After looking at all the logistics involved, our preferred solution was to work with a specialized ground transportation carrier that could guarantee the availability of the required number of trucks.
We sent our proposal to the customer, and a few days later, our sales rep. called and was told, “The price you’ve offered for the freight forwarding service I required was a little high, and so we’ve decided to give the project to your competitor.”
A week later, they called us back in desperation because our “competitor” could not make all the pickups on time; citing a shortage of trucks. We immediately called the carrier we had planned to use for the project, but unfortunately, they had already committed to another order. After a few phone calls, we managed to find another suitable carrier that could help us, but at a much higher price than the previous quote we had secured.
At this point, the price was no longer an issue for the customer who just wanted to get his merchandise picked up and delivered.

Freight forwarding is no different from any other business in the market; you always get what you pay for. Moving cargo worldwide is a complex process; therefore, choosing a freight forwarding service based only on the cheapest price is not usually a good idea. A lower price often translates to sacrificing service.

Three key indicators of excellent freight forwarding service

Freight forwarding companies come in all types: giant corporations, small family businesses, specialists, generalists, and so on. However, not all freight forwarders have the same standards of customer service.

This is what a freight forwarder, who is focused on customer service, will always do:

1. Provide constant up-to-date information on the status of your shipments

A good freight forwarder is well aware of the importance of good communication. Knowing about the status of your cargo at every stage of the supply chain is crucial for your company; it allows you to preplan and to keep everyone involved well informed.

For instance, if you are a trading company or a distributor, questions like: “When are we getting our order?” are asked to you constantly. Therefore, communicating proactively and delivering on your promise is key to maintaining a good reputation as a supplier.

When your freight forwarder fails to inform you that the delivery of your cargo is late because customs have selected it for inspection or because the truck broke down, they are not allowing you to respond to the circumstances at the right moment. When it comes to logistics every lost minute counts!

2. Have your best interest in mind

All shipping arrangements and negotiations made on your behalf must have one goal in mind: to benefit your company. A conscientious freight forwarding company knows that every decision they make about your cargo affects your business directly; therefore, they will never do anything that may put your company at risk.

A big part of a freight forwarder’s responsibility is carefully scrutinizing every carrier they hire to transport your merchandise; not doing so would jeopardize your cargo’s safety and on-time delivery.

To better explain, if a trucking company with expired permits is transporting your goods, and they get caught by the Federal Motor Safety Administration (FMCSA), the FMCA will immediately seize the truck. The carrier would not be able to deliver your cargo until the non-compliance was resolved. Therefore, a freight forwarding company must do its due diligence when selecting its carriers to avoid this situation.

At LAC, every time we add a new ground transportation carrier to our list of suppliers, our compliance department ensures that the trucking company has the required cargo insurance coverage and that their transportation permits are in good order.

3. Offer proactive solutions specifically adapted to your needs

Freight forwarders must always think proactively when offering you a shipping solution. They need to consider every possible risk or outcome before deciding on the best move to handle your cargo.

Sometimes tailor-made solutions are necessary; a well-grounded freight forwarder never presents you with a solution without a clear understanding of your needs.

One of our customers is a large food trading company that exports its products from Canada to South America. Their main requirement is that we offer them the fastest possible transit times available. Therefore, we never choose a shipping route via the United States territory. Because any minor non-compliance with their Food and Drug Administration Department would result in long delays; instead, we find direct routes from Canadian ports to the destination countries, even if the transportation price is higher.
Choose a freight forwarder that delivers high-end service.

Choose a freight forwarder that delivers high-end service and has your best interest in mind.

Three questions to ask yourself to ensure the freight forwarder will deliver

1. How experienced is the freight forwarder?

Referrals from other customers that have used their service before are also helpful. Nowadays, it is easy to find the reviews of a company on the Internet. Also, some companies have reviews from their customers on their website; just make sure the reviews are legitimate.

Lastly, you can verify what associations the freight forwarder belongs to; usually, the most prestigious associations have a long list of prerequisites before allowing a freight forwarding company to become a member. One of them, for example, is to show proof of liability.

2. How transparent is the freight forwarder about its services and prices

Choosing a freight forwarding service provider with a solid and extensive network worldwide is vital to offer you better support and more creative solutions in any country. In addition, you will be well informed about duties, taxes, and customs requirements whenever you need them.

3. How reputable is the freight forwarder?

Some freight forwarders offer a low price upfront to add endless service charges later. You need to be careful of services that are not included. Always ask for an itemized quotation describing every service offered and showing the freight forwarder’s terms and conditions. A freight forwarder should guarantee service and price with no hidden fees for services that should be included from the start.

Choose your freight forwarding service wisely, or you will pay the price

Freight forwarders are a key component of the supply chain; they coordinate the movement of your goods from the time of pickup until the time of delivery. Choosing the right freight forwarding company is crucial as there is no room for mistakes.

To get the best freight forwarding service, you must know what you are looking for. If the price is your main focus, before choosing the cheapest alternative always make sure you are making a like-for-like comparison about the services offered. Finally, and most importantly, you need to inquire about the freight forwarding company that you are planning to entrust with the shipping of your merchandise.

The choice is yours at the end of the day but bear in mind that your choice could have awful consequences if you favor low price over high-end freight forwarding service.


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