Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today’s theme is Forwarder Management.
It has been five years since I ran a forwarder company in Thailand. I would like to talk about what I have noticed and felt during that time.
Our company is a forwarder whose strength is in marine transportation, so please understand that this is mainly about shipping.
Daily Logistics Radio by IINO san in 29th Sep. 2021
Cash is needed anyway
When transporting cargos by sea, the forwarder has to pay the shipping company the ocean freight and other charges beforehand.
It depends on the relationship between the shipping company and the forwarder, but in general, the payment is made when obtaining B/L from the shipping company.
Then it takes about a month to collect the payment from the customer.
For example, the ocean freight rate from Thailand to New York in North America nowadays is over USD 10,000/40′. If this is 10 containers in one shipment, the amount will be more than USD 100,000.
Without this cash, we will not be able to get space from the shipping company nor provide services to your customers.
Purchasing work is important
Forwarders’ job is to rent containers and space from shipping companies and provide services.
If the freight itself is high when purchasing from the shipping company, the selling price to the customer will automatically be high as well.
If the freight rate is too high, it is not at all impossible to sell but quite difficult.
In addition, if we don’t get space from the shipping companies, we don’t have anything to sell in the first place.
Nowadays, the shortage of space due to Corona disaster is becoming a problem, so if we are weak in purchasing, we will not be able to secure space.
Once again, I feel that purchasing is a very important for this business.
Recruiting and Retaining Talent
I am running a business in Thailand. Changing jobs have recently become more and more common in Japan, but I have the impression that the frequency of job changes in Thailand is much higher than in Japan.
Also, in the forwarder job, the job content does not change greatly at another company. Therefore, it is common for people to change jobs if they find a company with better conditions.
I think that the active turnover of human resources is a good thing for a large company.
However, if employees don’t stick around for a few years after starting the business, the president himself will have to spend a lot of time recruiting new employees.
It is difficult to offer high salaries from the start, therefore I personally have been struggling with this recruitment issue.
I, Japanese, need a strong local partner to run company in Thailand. In my case, I had a Thai partner from a shipping company and the Thai president of the parent company to support me in this aspect.
As I mentioned above, I think that I was able to demonstrate my strength in purchasing and concentrate on sales and marketing, which was one of the reasons why the company was profitable for five years.
As a Japanese business owner, I think it is important to be able to speak the local language. In our company, only a few staff can speak English fluently.
Most of the time when I talk to my staff, it is in Thai, although I am not very good at it. When I communicate more important things, I talk in Thai through my partners. I think this is my effort as the president of a small company.
Logistics industry is job stable
And finally, nowadays, the impact of Corona disaster on the economy is a global problem. Even in such a situation, the international logistics industry will never stop working as an infrastructure.
In recent years, it has been reported in the news that major shipping companies and forwarders are making large profits, so it seems that this industry is revitalized more in the time of confusion.
When I started my business five years ago, low freight rates were a chronic problem. However, if we had strong purchasing power, it was possible to make a profit by proposing benefits to our customers.
Although the competition is fierce, I believe that the international logistics industry will continue to be needed as an infrastructure for the world in this way.