Hello. This is IINO.
This time I would like to talk about the theme of forwarders’ strengths and weaknesses.
Forwarders as the world’s infrastructure
First of all, my YouTube channel has been seen by many people, and I’ve been asked to do international logistics work from many countries. Thank you very much.
Even if there is a corona disaster, the economy is still moving, and cargo movement will not stop. I believe that our job as a forwarder must function as an infrastructure for the world.
There are so many different types of inquiries that come to our company. I am very grateful that people seem to think that, I can transport anything since I have been sending out various know-how about logistics.
However, in reality, I have my strengths and weaknesses, as shown in this theme.
Factors relate with Forwarders strength and weakness
It may seem like a simple job of carrying things, but not all ways of carrying cargos are the same.
Mainly it changes according to the below points.
・Contents of cargo.
・Areas to be delivered.
・Quantity of goods to be delivered.
It is the forwarder’s job to propose, the most suitable logistics method according to these factors. However, in reality, there are some cargoes that we may wonder how to transport.
I have experience in importing and exporting various kinds of cargo in Thailand.
For example, automobile parts, air conditioner parts, fresh food, processed food, alcohol, moving cargo, metal molds, paper bags, cosmetics, chemicals, activated carbon, leather products, scrap, electronic parts, construction materials, furniture, new and used machinery, plant equipment, etc.
Cargo Type and handling experience
It is easy to transport general cargo, but if we have no experience in transporting it, we may not immediately answer how to transport it when we are asked.
For example, in our case, vaccines, famous paintings and trees.
Let me tell you more about paintings as an example. The value of famous paintings sold at auctions or shipped to museums for the exhibition, is much higher than that of ordinary cargo.
They are also prone to breakage and require the utmost care in handling.
If I were asked to transport a famous painting, I would be terrified. I don’t have any experience in transporting them, and the risk is high, so it’s hard for me to say, “I’ll do it!” without hesitation.
Regarding trees, I think it is physically possible, to use flat-rack containers or conventional ships to transport them. However, I believe that quarantine in the importing country will be difficult.
There is a quarantine to keep pests and diseases, from entering other countries at bay in the transportation of plants.
I have never done quarantine for trees before, so I need to do a lot of research before accepting the request.
Then the area to be transported is also important. If it’s a country where we frequently send cargo, we can offer flexible services since we are familiar with it.
It’s also easier to work with local agents, and to transport various kinds of cargo.
However, if it is a region where we have never sent cargo before, we may not even have an agent.
Even so, the cargo itself can be transported, but it will be only to the port or airport of the export destination, and customs clearance and delivery upon arrival need to be handled by the importer.
In addition, if we have never sent goods to a region before, it will charge a tariff, or a fixed price, for ocean freight.
This is one of the major points of strength and weakness of the forwarder in the region. For example, we can offer lower prices for shipments from Thailand to Japan, because we transport more than 100 containers per month.
However, we have never sent any cargo to Chile or Colombia in South America, or Tanzania in Africa.
On the other hand, there may be forwarders who regularly send a lot of containers to South America. You may be able to get a more advantageous price or secure more space there.
Volume of Transporatation
And the amount of cargo to be delivered is also an important factor. We also have requests from individuals for cargo transportation.
In the case of individuals, except for moving, the amount of cargo shipped is usually only a few cardboard boxes.
Even if they are a corporation, there is the case that they may be sending samples or transporting small and light items.
If the amount of cargo is small, it is generally more cost-effective to use a courier or EMS. Courier is well known as DHL and FedEx. EMS is the international postal service, so the price is lower here as well.
The forwarders can only offer tariffs (fixed prices) for air cargo with an actual weight or size of 45kg or less, as I explained earlier.
The case better to use Courier service
On the other hand, couriers such as DHL and FedEx, carry a large amount of small-lot cargo in their aircraft, so they can offer lower prices.
In addition, since small-lot shipments are often small in value, they usually use a speedy method called simplified customs clearance, which saves the shipper the trouble of arranging the necessary documents for customs clearance.
From my personal experience, it is a good idea to use a forwarder if the volume of air cargo exceeds 100kg.
It depends on the contents of the cargo, the region, and the forwarder you request, in many cases, it can be beneficial.
When using LCL, it is better to have a volume of at least 1m3. This is because 1m3 is the minimum volume for ocean freight and port overhead.
LCL is explained in detail in another video, and a link is provided in the overview section.
Strength & Weakness for Spacial Containers
As it relates to the cargo content explained earlier, handling special containers is also a matter of strength and weakness.
Special containers include reefer containers, open-top containers, and flat rack containers.
Reefer containers are required when handling refrigerated and frozen cargo. They are mainly used to transport food products, and forwarders who specialize in food products handle many reefer containers.
If you need a reefer container, it is better to use a forwarder specializing in this type of transportation, to surely secure the space and have more cost effective.
Open Top and Flat Rack container
The next, I refer to type of container such as the flat rack or open-top container.
They are usually used for transportation large cargo such as machinery. As with reefer containers, forwarders who mainly handle those cargos, will have an advantage in arranging these containers.
This type of cargo is called over-gauge cargo, and I have made a video explaining it before, which you can find a link to in the overview section.
Major Forwarder Strength and Weakness
We also need to mention the major forwarders. Major forwarders have branches in many countries and their own assets, such as warehouses and trucks.
They also have an abundance of human resources so that company have experience in various transportation cases. In this sense, it is understandable why major forwarders are chosen to transport special cargo.
However, as a small to a medium-sized forwarder, let me offer some resistance. Even if it is a major company, it is the salesperson who is in charge.
In large projects, they may work as a team, but in general, it is a single salesperson who is the point of contact.
It’s not as if this salesperson understands all logistics. If there is no sharing of know-how, or information from experienced people within the company, the company is not much different from us, small and medium-sized companies.
It is also an illusion that freight rates are cheaper because it is a major company. Keep in mind that it depends on what the salesperson is willing to do.
HPS Trade Strength
Lastly, let me introduce our company’s specialty. We are a forwarder in Thailand, and most specialized in ocean exports from Thailand for corporate customers.
As I explained at the beginning of this video, we have experience in transporting various goods from Thailand, including industrial goods, food products, and daily necessities.
IINO san’s Strength
In addition, I have been working as a forwarder in Thailand for eight years now. Unlike expatriates who return to their home countries after three to five years, I have been involved in a wide variety of cargo transportation for the past eight years.
So that I have know-how in air transportation, cross border trucking to neighboring countries, installation of machinery and equipment, and customs clearance, in addition to ocean exports.
In this sense, my greatest strength is in ocean freight exports, but I believe that I am generally better at transporting cargo related to Thailand than the Japanese sales staff at other Japanese forwarders.
Now let’s summarize the contents of this video. I told you that there are strengths and weaknesses among forwarders, who deliver cargo around the world. Mainly, each forwarder’s strengths differ depending on the contents of the cargo, transportation region, and cargo volume.
A forwarder that regularly transports a specific cargo or to specific region, may have the know-how to transport it safely, and may also be able to get better rates from shipping companies and airlines. In that sense, they are good at what they do.
On the other hand, in case the cargo to an area or region is that they have never handled before, they will not have the know-how. The freight rate will be a tariff (fixed price).
There is also a difference between individuals and corporations. Individuals whose transportation volume is smaller than those of corporations often benefit more from using courier or EMS services.
And handling in special containers has its own strengths and weaknesses as well.
You shall ensure that the cargo you are planning to transport is within the expertise of the forwarder you are currently dealing with. Some forwarders may be able to offer you a better solution than others.
I hope this video will help you choose a good forwarder. That’s all for now! Thank you very much!
Contact to IINO san