Forwarding now 'a chore – and a stressful one' – having to face angry shippers
Shippers with ‘unreasonable’ expectations are causing headaches for forwarders – big and small. Exhausted forwarders have ...
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By Guest writer
Zen Yaworsky, Programme Director of the Supply Chain Academy, takes a look at how forwarders are organised and how they set about doing their work.
I took a stand for my company at a logistics exhibition last year and spent three days engaging with visitors on the subject of developing and improving the supply chain capability within their organisations. My attempts to enter into a conversation with one chap, a freight forwarder of the very old school, didn’t go so well. He was not in the mood to slow down or make eye contact and with a curl of his lip he dismissed me with the comment, “I’ve been a forwarder for 38 years and there is nothing you can teach me.”
Most of the work I do is with manufacturers and retailers, helping to improve their teams’ capabilities to understand and optimise their supply chains. Until this year the academy didn’t class forwarding companies as typical customers but recently I have been doing some research and came up with some pretty alarming facts when it comes to freight forwarders.
- 49% of the workforce has below NVQ level 2 qualification
- 47% are over the age of 40 years with only 10% between 16 and 25 years
- The only requirements for becoming a freight forwarder are a phone and broadband connection.
When you think about it that’s a really unappealing cocktail. It can be summed up as “an ageing workforce that is desperately unqualified and which is not being refreshed by new blood and, if my friend at the exhibition is at all representative of his colleagues, one which is steadfastly resistant to change”.
Freight forwarding is hard these days, really hard. And it’s demanding more and more from forwarding organisations if they want to stay in the game. The economics of the freight market today would suggest that it won’t be long before there is some serious consolidation; after all a freight forwarder can’t live on nothing for long, and nothing or close to nothing is what a lot of the freight forwarding companies are going to be making – in fact a lot are reporting crippling negatives.
Before 2010, the ways of doing business were very much grounded on the relationship the forwarder had developed with the shipper and the shipping line; where the relationship was good then the business was good and so relationship management was and is still seen to be a core skill. Formal contracts were rare, almost unheard of, and there was little that couldn’t be resolved by a jolly good dinner and few bottles of wine.
These days there is a very harsh wind that blows. Freight forwarders are under crushing pressure from both the shipper and the lines in a market economy that no-one can second guess.
From what I can see, the majority of forwarders haven’t done much to change their game in response. I meet more and more people who are relying on their experience to try and get them through enormously volatile times, times which are inverting the normal rules of engagement. Experience may be the wrong solution.
Freight forwarders need to act fast if they want to have any control over their fortunes. There is a need to introduce new blood and there is a serious need to improve the current capabilities of the industry which are looking as inappropriate and outmoded as mullet hairstyles and wide lapels.
We are watching with interest the development and launch of The Novus Trust (www.novus.uk.com); an inspired initiative which is using really imaginative ways of attracting bright young talent into the forwarding, logistics and supply chain worlds. We will align ourselves closely with that organisation as our philosophies are very similar. Novus Trust will work with Huddersfield University and the stable of sponsoring companies who they have on board to develop young people and significantly, then guarantee them a job on graduation. But it will be four years before the first of these bright youngsters hit the ground (it’s a three-year degree with a one-year placement). In the meantime forwarders still need to get hold of the capability problem.
At the Academy, we offer a range of courses covering all aspects of the supply chain, but the one which I am concentrating on developing, specifically for freight forwarders, is a course which is sorely needed by just about all the freight forwarders I know.
The Supply Chain Academy has some of the country’s best negotiation training partners working with it and I have been playing back to them the precarious position that freight forwarders are faced with today. We agreed that if there really is a “squeezed middle” in this country then it is probably entirely occupied by freight forwarders and they are trying to rely on redundant experience to manage their positions and the critical profitability of their organisations. We came to the rapid conclusion that forwarders are desperately in need of modern, well-structured and skilfully delivered negotiation skills development.
Negotiation is a real science; it takes detailed planning, well-honed commercial acumen and a sophisticated understanding of the person and organisation on the other side of the table. It’s no longer a simple relationship-centred bargaining session but rather a complex deployment of behavioural technologies such as Neuro-Lingustic Programming and Emotional Intelligence, manipulation techniques and subliminal linguistics. There is the need for detailed preparation and forensic analysis of the positions of the sellers (the lines) and the buyers (the shippers).
It will take us until Q1 of next year before this course is ready to launch. It’s not the sort of stuff that will appeal to my sneering friend at the exhibition, but for those who are hungry to succeed and are committed to changing the way that they do business in order develop a competitive advantage, then this will make powerful sense.
The truth of the matter is that freight forwarders are purchasing professionals and it’s imperative that they start to invest seriously in their capability development and assert themselves in the negotiating arena. It will require real change, but then as Charles Darwin said almost 160 years ago: “It is not the strongest of the species that survives, nor even the most intelligent. It is the one that is most adaptable to change.”
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Comment on this article
Issa Baluch
August 28, 2013 at 12:58 pmVery interesting. I think that specific freight forwarder had a unique problem. Lack of listening ability. It pays to listen more and talk less. Anyway, please read my forst book: Transport Logistics, past, present & predictions. You will see first hand the history of freight forwarders and their future if they do not adopt…
I know it because I am a living example..
Best wishes.. Issa
Michael Kusuplos
August 28, 2013 at 9:29 pmThe words of Mr. You Can’t Teach Me Anything, reminds of a my lessons in my ethnic hertiage as a much younger man. One particular one was this:
” True knowledge exists in knowing that you know nothing.” – Socrates
Physical age means nothing in the continuing search for Knowledge. If you do not gain a minimum of one item per day, the day was a waste.
Steven W Ingels
August 30, 2013 at 2:18 amNo offense, it appears you are polling in pubs near Heathrow between the hours of 9-11 pm. My next comment then would be “that must explain the jaded or ginned mentality you used in your guest slot article’s composition”. After you berate the UK model will you stick to the EU or go global? Forwarding was the name for 3pl and pm before consultancies (retired specialists frm the industry) developed markets with the new special names for the same services and made niches with selected and direct improvements.
In 1975 I would have said yes but this is 2013 and the largest percentages are not that way.
Steven W Ingels
August 30, 2013 at 2:30 amContinuing… Negotiating has been one of the base skills in all modes of transportation. The investment in specific skills beyond handshakes and asking for the business or the needed per kg rate vary by company. This exists in all commerce. Please contact any of the top 20 forwarders in the UK and interview the MD. I urge you to.
Cheers
Zen Yaworsky
September 04, 2013 at 8:03 amThanks for your comments. Of course it would be unprofessional and redundant for me to use anecdotal information with regard to the qualification levels in the industry. The statistics I was quoting were not of my making but are the result of studies done by the Freight Transport Association. And I agree with your later comment that negotiation has been one of the base skills in all modes of transportation. The point I was making was that new circumstances in the industry (and I think you will probably agree that the current climate and “state of the nation” in forwarding is throwing up new challenges and it is important that new skills, appropriate to the times, are developed to meet those challenges.
Leslie Taylor
September 02, 2013 at 11:10 pmIssa Baluch’s book is a very interesting book. I recommend reading it. Mr. Baluch has a very distinguished long career in Freight Forwarding.
I tend to lean toward Mr. Ingel’s synopsis in a general sense.
The author’s company is a “For Profit” Academy, hence his motivation is to increase his business. Not that there is anything wrong with this. Continued education is definitely something the industry needs.
He should promote continuing education, not a “adapt or perish” thought process.
The Industry has been hearing how small to medium size freight forwarders are going to disappear like dinosaurs for now over 25 years, be it due to the integrators, multi-nationals, IT Technology, etc, and it has not happened, nor will it.
Promote and support educational processes within the industry. Using “scare” tactics will simply fall flat on its face.
Freight Forwarders may not all be highly educated, but I can guarantee you they all have their feet firmly planted on the floor and use their street-smart knowledge which can never be taught in any class.
And seriously, the word “sneering” is just plain derogatory, and inflammatory and meant to gain attention. I don’t know many people in this industry who “sneer”.
Zen Yaworsky
September 04, 2013 at 8:13 amLeslie, thanks for your observations. The article or blog that I wrote was a piece of opinion work, an observation from where I stand. Some of the facts are however beyond opinion; it is undeniable that freight forwarders are in a dangerous place if we use earnings and profitability as a measure. Like you I believe that the continued presence of small to medium size forwarders is something that will be a constant in the make up of the industry and they are to be welcomed – there is some excellent entrepreneurial activity going on in that area. I hope you will agree that forwarders are under quite extraordinary pressure at the moment, pressure that may not be able to withstand.
Leslie Taylor
September 04, 2013 at 4:03 pmDear Zen,
I agree with your points on an overall basis.
Education is a must, be it internal, or from an outside source.
You need to reach out to all the Forwarding Associations around the world and see if you can be accepted to collaborate with them for the further benefit and enrichment on the their members. This will give you an ability to reach the thousands of Independent Freight Forwarders throughout the world in a Professional Manner.
I recommend you “friend” Freight Forwarders, don’t alienate them.
Using “Adapt or Perish” and/or “pressure they may not be able to withstand” will only serve to create resistance to what you are actually trying to do for the industry.
Trust me, you want the Freight Forwarding Industry to embrace you, not embargo you.
You have good ideas. Implement them in a positive fashion and no doubt, it may be a success for all parties.
Terry
November 17, 2013 at 8:37 pmHowdy,
Some valid points have been made here
Forwarders are a business like any other, yes they purchase but only as an integral part of a larger more important sales process (which in no doubt is part of a marketing technique or style that we respect as god of all and set aside for now), the focal point is not that forwarders are not making ‘the purchase’, they are not making ‘the sale’
Put simply the sales process puts money in the bank and without that, there is no business
To lose sight of the sale as a result of unfair attention to purchasing is surely losing sight of the steak for the sake of the peas
As we may agree a sale is made only when successful communication has taken place, successful communication is a result of asking questions not making statements and building or grouting stone walls “there’s nothing you can teach me about forwarding …” so my forwarding friends as sales people we are failing
Genuine sales achievers get ‘inside’ their customers business, they partner short, medium and long term decisions that affect the relationship that binds their companies together, they become an essential organ in their customer’s business
The winner is the one that makes business easier for their customers