The BIG question: “Is there a benefit to my business?”
Will partnering with a customs and logistics specialist make you more productive and your business more profitable? Will it reduce your exposure to audits and penalties? Will it accelerate your operations or enhance your growth potential? Will it give you the edge you’ve been looking for in your competitive sphere?
If you align your business with a partner with just the right mix of experience and enthusiasm, capability and character, the benefits will really add up!
Risk management • Ensure your business is fully compliant with the regulations governing cross-border trade, as non-compliance can incur significant penalties
Duty reductions • Take advantage of NAFTA and other trade agreement opportunities to significantly reduce import duties and taxes (your customs broker will help you navigate the growing number of rules, regulations and conditions)
Quicker shipments • Expedite the customs clearance and delivery of goods
Flexible staffing • Eliminate the need to hire staff with specialized customs knowledge; focus instead on revenue-generating core competencies
Operational efficiencies • Manage peaks and valleys of importing volumes; create automated entry documents from previously classified goods; benefit from full IT integration and support
Outstanding value • Brokerage fees are usually only a small fraction of a company's overall importing costs.
Trusted advisors • Enjoy ready access to a trusted, knowledgeable advisor whose logistics industry insights can facilitate sourcing, sales and other business decisions.
Proactive planning • Avoid pitfalls, navigate around restrictions and find the most cost-effective ways to import or export your products.
Flatten out the learning curve • Learn from a specialist versus learning on the fly.
Finding the logistics partner that fits!
Choosing a partner for your importing and exporting needs can be a daunting, often perplexing task. In your search for an experienced, highly competent partner, keep the following considerations in mind:
Responsive support.
Quick and easy access to a licensed broker and logistics partner is crucial to your business. You should seek direct access to industry professionals whom are intimately familiar with your business. Make this a key component of your logistic provider’s service commitments.
Rapid response times.
Look for companies that respond quickly to your inquires. If they aren’t responding quickly to a potential new customer, how will they perform when it comes to the day-to-day issues involved in clearing customs?
Top-shelf service for every customer.
Many customs brokerage and logistic companies devote the lion’s share of their resources to their high-profile clients, leaving their smaller customers to get lost in the woodwork. You’d do well to use a partner that prides itself on delivering the same level of personalized service to small and medium enterprises as it does to the Fortune 500.
Effective document management.
Clearing shipments through customs is all about managing documents. Look for a customs broker who understands and espouses the need for precision and the importance of total compliance. When it comes to customs clearing, corner cutting is just a disaster waiting to happen.
Agility over “assets”.
Many people associate ‘freight’ with transportation assets – trucks, trains, ships and planes – and they measure a logistics company’s capabilities by the size of its fleet. Those who feel it’s better to work directly with companies that own and operate their own equipment may not recognize the advantages of working with a third-party logistics company. While asset-based companies are limited by equipment availability within their fleets, third-party logistics companies’ global transportation networks provide broad, largely unfettered access to whatever equipment best suits a customer’s needs.
Integrity and accountability.
There’s no such thing as a perfect shipment. What matters is how your customs broker and freight forwarder handle issues when they arise. Choose a company with a proven record of responding quickly and creatively to matters that demand creative solutions.
Big-picture thinking.
For any customs and logistics company, delivering real value demands big-picture thinking and an enterprise-wide perspective. Align yourself with a team whose members work together to uncover opportunities and unlock greater value for their customers.
A partnership mentality.
In our industry like so many others, the most capable firms build long-term customer relationships by delivering great value and treating customers’ businesses as if they were their own. Find a partner who’ll take the time to fully understanding your business needs and challenges, navigate the complex logistics landscape on your behalf, and provide intelligent, proactive solutions.
Choosing the "right" company for your business
No matter which industry you’re in, or where you sit in the supply chain: manufacturer, wholesaler, distributor or retailer, choosing the right logistics supplier is a critically important task for most companies.
In the current era of globalization many companies outsource production, or materials, from low-cost labour countries to remain price-competitive. That necessitates dealing with customers or suppliers in different countries (different languages, cultures, time zones and regulatory systems), through extended supply chains (multiple modes of transport, packaging/labelling/documentation issues, equipment and transit-time concerns, import and export Customs formalities). Even if your firm buys goods from a distributor, chances are your distributor is importing from a foreign country, so trade, and trading best-practices, impact many Canadian companies.
Complicated? Absolutely! Are logistics suppliers plentiful? Yes! In fact, FIATA (International Federation of Freight Forwarders Associations) estimates there are more than 40,000 freight forwarding/logistics companies operating around the world[1]. The real question is, which one is the right one for you? If you pick the wrong one, you might simply find you spent more than your competitors. Or worse, you might find your shipments did not get delivered and your customers purchased your competitor’s products instead.
Unfortunately, the primary focus for many companies when it comes to negotiating with logistics suppliers is limited to cost. Cost is important, but as anyone experienced in logistics can tell you, there is much more to worry about than “cost” when you are dealing with extended supply chains that cross international borders.
When choosing a logistics supplier, look for one company that can provide all, or most, of the services you require. Typically, this involves four key areas: transportation, warehousing, Customs clearance, and IT resources capable of generating reports needed to analyze your total landed shipment costs and produce relevant performance metrics. Offering multiple services is important as this enables logistics companies to provide shipment visibility. Information gaps can develop if your supplier must turn your shipment over to another company for Customs clearance, transportation, or warehousing services. Controlling all stages of your shipment’s transit allows your supplier to provide timely and accurate information regarding your shipment’s whereabouts and estimated time of delivery.
In addition to the four areas mentioned above there are several other factors to consider when choosing the right logistics company, including willingness to negotiate rates, experience in your industry, references, an international agent network and an accessible customer service department. Also important is the ability to grow with your company, providing service offerings in different countries as your markets grow, and support and advice for compliance and regulatory requirements. A supplier that meets your needs in all or most of these areas is the right logistics company for your firm, with the potential to become something much more valuable, an integrated solutions provider.
[1] FIATA
Realizing value from your logistics partnership
When dealing with logistics suppliers it’s important to remember that they provide a service rather than a product. Sounds obvious but take a moment to think about how you evaluate your suppliers. When you’re purchasing materials, you can measure your supplier’s performance based on quality, cost, or both. When dealing with logistics suppliers however, you’re dealing with an intangible service. You can’t pick it up, or weigh it, but missed deliveries can have a dramatic impact on anyone’s definition of quality. Logistics services are critical to success in today’s global environment. And that means having strong relationships with your suppliers.
What’s the difference between “getting along” with your logistics supplier, and getting the most from your logistics “partnership”? The key difference begins with recognizing the difference between a supplier, and a supplier that is a partner in your efforts to be successful, to improve competitive advantage. If you only talk to your logistics supplier when you call for a pickup, or want to negotiate lower rates, and your supplier is accommodating, you probably feel you have a strong relationship with that supplier. There’s a significant difference however between getting along with a supplier and getting the most out of a supplier relationship.
To begin with, logistics suppliers are a collection of people – yes, they are professionals in their area of international trade, but they are people first. And as people they respond to customers who are engaged, proactive, practical and reasonable. Where product-suppliers are measured on material quality and costs, logistics suppliers are measured on the strength of their relationships. To get the most out of your relationship with a logistics supplier, begin by sharing information proactively. Share your plans for the coming year, not just next week. Be open to the use of modern technologies for sharing information electronically with your freight forwarder and customs broker, whether it be electronic payments, the use of customer portals to generate reports, shipping arrangements or document preparation.
Actively engage your logistics suppliers in dialogue on a regular basis. Share your business plans, including any appropriate information on sales trends, shipping volumes, new products, or packaging changes. Ask your logistics suppliers for their advice on your operational practices to identify any areas where you might be able to improve service or reduce costs. Its commonplace to fall into a routine, especially one that seems to work. But doing things a certain way because you’ve always done them that way, may not be the best way. Remember your logistics suppliers observe your operational processes as well as those of hundreds of other companies every day. There may be opportunities to improve operations or reduce costs by changing shipping and delivery schedules, adopting consolidations, or reducing package sizes just to name a few. When asked, logistics suppliers are happy to provide this advice.
In order to get the most out of your logistics partnerships, treat your key suppliers like partners. Good suppliers don’t mind criticism when its warranted, but they also don’t mind compliments either. Share information, be proactive; treat your logistics suppliers like people and involve them in your business operations as though they work for you. Come to think of it, they do!
