How to increase your freight forwarder revenue
Created on September 30, 2021 | Last updated on November 25, 2021 at 01:24 pm
In this article you will get:
To increase revenue is every freight forwarding company’s dream, isn’t it? However, it can be quite challenging when you think about going after new freight partners, after all, the competition is huge inside the forwarding industry. So what if I tell you how to increase your freight forwarder revenue through partnerships you already have?
Yes, you read that right, there is a way for you to start improving your freight forwarding company’s profit through the forwarder partnerships you currently have. To do so you will need to start thinking about taking a closer look at the business you have been exchanging with your forwarder partners and analyze them, partnership by partnership.
Analyzing your freight forwarder partnerships
In order to improve the profit margin in your forwarding business analyzing your current freight forwarder partners is better than going after new partnerships. That is because you have already managed to get to know your current partner, you have already exchanged business with him, you already know how he operates, the work flows better than with a new partner, which is natural.
So, how to increase your freight forwarder revenue through partnerships you already have? Well, you will need to think about 2 main points:
- The business exchanges you have been making with each partner
First things first, you will need to map the top most important information about each of your forwarder partners, for instance: cargo expertise, countries and cities they act on, the type of services offered, the average price, the amount of business being exchanged between the two of you per month, and the profit you have been making. If you feel like there is something missing please, feel free to add.
After you gather all the information in a spreadsheet it’s time to act on it – analyze! There are a few ways for you to make your analysis:
- By comparing forwarder partners that offer you the same kind of services in the same country. Let’s say that you have two freight partners in China, from forwarder A you are not receiving business, but you are giving them around 20 cargos per month. From forwarder B you are receiving around 10 cargos a month, but you are not giving them anything. That’s is when you will know that the best option would be to give forwarder B the cargos you are currently giving to freight A, leading to a more profitable partnership.
- By taking a look at opportunities you might have in a certain country or city. For example, imagine that you are sending many ceramic commodities to Iran, the smarter improvement would be to get in touch with freight forwarders in Iran and show them how great you are at dealing with this kind of commodity.
- By analyzing your routing orders, there are some cases where you can stop receiving routing orders from your freight partners and not notice because you are not keeping track of your transactions. So you should keep the habit of analyzing partnerships one by one to understand the reason if this kind of situation happens.
Those are some of the ways you can make your partnership’s analysis to know if your forwarder partner is profitable in order to increase your freight forwarder revenue.
You might be thinking that this can be a difficult analysis to make with only a spreadsheet, after all, they are not really visual. That is why I recommend you to take a look at Parnity’s solution for partnership analysis, with Parnity’s tool – Partnership Analytics – forwarders are allowed to visualize the volume of cargo send and received, the profit generated, the amount of business exchanged per month by criteria (modal/city/expertise), all of it can be seen by each individual partner.
- The relationship you are building with your partners
Now that you have mapped the data of each of your forwarder partnerships you should think about the kind of relationship you are having with them.
Are you getting in touch with your partners after each transaction to get their feedback? Are you letting them know that you are happy, or unhappy with their services? Are you making clear to your partners that their services are important to you?
Those are questions that you always need to bear in mind, if your answer was no to any of them, you start working to make them turn into yeses!
Letting your partners on the same page as you is extremely important, this is how you will know if there is anything you can do to improve your freight forwarder business, therefore, increase your revenue.
The best way to work on that is to turn your forwarding company to be customer-centric, meaning that all of your actions will be done thinking of the best interest of your forwarder customers. Here is a great piece explaining all about being customer-centric.
Whereas, here are some tips I prepared to help you build a good relationship with your freight forwarder partners:
- Agree on expectations – make sure you and your forwarder partner are always on the same page about the business you will be exchanging. Make sure to clarify all the documentation needed and regulations.
- Establish an official channel of communication – it’s common to exchange emails, messages, phone calls, and much more in a business. But to avoid misunderstandings it’s important that you establish an official channel to exchange information.
- Keep constant follow-up – be sure to always keep in touch with your freight partners, ensure that the cargo got there well, and don’t forget to give and ask for feedback.
It’s time to get the work done
Now that you know how to increase your freight forwarder revenue through partnerships it’s time to get the work done! Follow all the tips listed above and make sure to always think about the best interest of your forwarder partners, this is how you will grow your freight forwarding business.
Don’t forget to always keep your analysis updated and to keep constant contact with your forwarder partners.