That Sinking Feeling: Keeping shippers from running back to seafreight

…But keep the human element

However, automation alone won’t cut it, Fried stressed, insisting that it goes hand in hand with personal relationships. “I’ve always said that forwarders are part of a customer’s business solution,” he said. “They are on staff, just like an accountant or any other service provider to the shipper. Forwarders understand the shipper’s business model, anticipate shipper needs well in advance, and they understand the impact of what they do on the shipper’s product.”

The emphasis on customer service is equally true for air cargo carriers. While Russians don’t have a reputation for congeniality, Sergey Lazarev, general director of AirBridgeCargo, attributed the Moscow-based carrier’s growth in the first quarter of 2017 to ensuring that ABC met its customers’ expectations.

“In order to be able to deliver it, we are also ensuring that our organizational structure and communications are aligned accordingly,” Lazarev explained. “We will continue to stay in close contact with our customers to provide the network services and product solutions they require, and this will be supported by further growth of our fleet and more focus on carrying special cargoes.”

Maintaining that contact is also a big part of what van Haeften does at Emirates. That means engaging in what he calls a “a tripartite discussion” to add value in the logistics process. In the case of high-value goods or a shipment of temperature- or time-sensitive pharmaceutical products, he has found that engaging in a transparent relationship with both the freight forwarder and the shipper “will help result in a flexible solution that works best for all parties concerned.”

This sounds similar to the agenda that Perez has been pushing at Swiss WorldCargo. The company’s strategy includes understanding shippers’ finances, especially their aversion to “bound capital,” which refers to the delay in payments over the transit and delivery time. The higher the value of the shipment, the more expensive maritime and overland becomes. Once sold to a customer, Perez explained, the shipments have to move quickly. For routes such as Europe to Asia, “it is actually more expensive to ship it by ocean than by air, because of bound capital.”

Perez says that Swiss WorldCargo can move fast to streamline these high-value deliveries because the carrier is small and agile. “We can adapt and innovate in time, understanding the customer, and quickly giving him what he needs, rather than just having a ‘take it or leave it’ portfolio,” he said. “When we select our partners, we have to make sure that they deliver the same quality that we deliver.”

Just as experts were talking about “tapering growth,” the airfreight market started putting up some of the most robust numbers in years this spring. With forwarders scrambling for capacity on busy routes, customers will be lining up to be friends with carriers, but that doesn’t negate Whitehead’s warning about violently shifting markets. When the surge inevitably subsides, it will be the carriers that established relationships with, and integrated their services into, shipper’s supply chains that benefit the most from the boom times.

Revisiting Dr. Joel’s observations on interpersonal relationships, steps that carriers and forwarders take now will distinguish them from alternatives of convenience, and instead make them reliable partners that carve out an indispensable place in their customers supply chains. That way, when the market cools, air freight will be in a stronger position, allowing it to capitalize on the next trend.

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