In the complex world of international logistics, opaque costs are a hidden killer of profits. Traditional partnership models (phone, Excel, and email quotes) are inefficient, experience information lags, and are unable to adapt to the ever-changing market. Combining digital tools with new freight forwarding partnerships is the key to solving this problem.
I. Core Objective: From “Fuzzy Costs” to “Visible and Controllable Costs”
Past: A single lump sum price included countless “possible” fees (such as various surcharges and terminal handling fees), leaving the final cost unknown until the final invoice. Prices were negotiated annually, making them unable to adapt to market fluctuations.
Future: Costs at every stage are granular, visible, and predictable. Through in-depth collaboration with freight forwarders, you can lock in forward prices during market lows and flexibly adjust your strategy during market highs, achieving optimal long-term costs.
II. Digital Tools: Your “Cost Perspective” and “Decision Dashboard”
These tools provide the technical foundation for achieving cost transparency.
- Online Quotation and Booking Platform
Function: Book a cargo space like booking an airline ticket. Enter the port of departure, port of destination, container type, and cargo weight, and the system will automatically generate real-time freight rates and all detailed charges (Ocean Freight, BAF, ISPS, IAC, THC, etc.).
Transparency:
Instantaneity: No need to wait for manual quotes from freight forwarders; get prices in seconds.
Comparability: Quickly compare prices and services from different shipping lines and routes on a single interface.
Standardization: Standardized fee names and definitions avoid misunderstandings during communication.
Examples: Many large freight forwarders (such as Kuehne + Nagel and DHL Global Forwarding) and cross-border logistics platforms (such as Flexport and Yunquna) offer this type of platform.
- Dashboard & Analytics
Function: After logging in, you’ll see a dedicated dashboard showcasing key performance indicators (KPIs) for all your shipments: overall freight spend, per-box cost trends, route cost comparisons, destination port cost analysis, and abnormal cost alerts.
Transparency:
Trend Insights: Clearly visualize seasonal and route-specific freight rate trends, providing data support for future shipment planning.
Cost Diagnosis: Quickly identify which links and destination ports have unusually high costs, allowing for targeted optimization.
Performance Management: Data-driven evaluation of the service and pricing performance of different freight forwarders.
- Seamless API Integration
Function: Connect the freight forwarder’s system with your ERP (Enterprise Resource Planning), TMS (Transportation Management System), or WMS (Warehouse Management System) via API technology.
Transparency:
Process Automation: Create a shipping order in your ERP, and the information is automatically synchronized to the freight forwarder’s system to generate an order, eliminating the need for re-entry.
Data Integration: Logistics cost data is automatically fed back into your financial system, linked to procurement costs and sales revenue, making it easy to calculate profit per shipment.
Ultimate Visibility: Logistics costs are no longer isolated numbers; they are embedded in your entire enterprise’s operational data stream, enabling global cost optimization.
III. New Freight Forwarder Partnership: From “Supplier” to “Strategic Partner”
With digital tools, your partnership model with freight forwarders also needs to evolve.
- Data Sharing, Joint Decision-Making
Traditional Model: You conceal your shipping plans, while the freight forwarder hides their pricing strategies, leading to a game of chance.
New Model: Under the protection of an NDA (Non-Disclosure Agreement), you provide the freight forwarder with your future shipment forecast (e.g., you plan to ship 100 containers to Los Angeles in the next three months). The freight forwarder, based on your overall cargo volume and market analysis, offers you a more competitive forward contract rate. This is a deep partnership built on trust and scale.
- Explore multiple pricing strategies to lock in the best price. Discussions with freight forwarders are no longer about “Can we get a lower price?” but rather “Which cooperation model is most beneficial to both parties?”
Spot Rate: Suitable for small, volatile shipments, driven by market trends.
Long-Term Contract Rate:
“Rate Lock”: When market freight rates are low, use a contract to lock in a price for a future period (e.g., six months) to mitigate the risk of price increases. This is the core method for securing the best price.
“Volume Commitment”: You commit to a certain volume, and the freight forwarder will provide tiered discounts. Digital tools can automatically track volume completion progress.
Cost-Plus Model: The freight forwarder discloses all underlying costs (e.g., the net price charged by the shipping company) and charges a fixed percentage service fee. This is the ultimate transparency model, built on a foundation of exceptional trust.
- Joint Optimization, Not One-Way Price Cutting
Collaborative Data Analysis: Review the data dashboard with your freight forwarder account manager: “Why are my destination charges higher this month? What went wrong? How can we optimize?”
Process Optimization: The freight forwarder leverages its expertise to help you optimize packaging, improve HS code classification, and recommend more economical shipping routes, reducing costs from the source. The savings you’ll achieve far outweigh the cost reductions alone.
IV. Action Roadmap: How to Get Started?
Internal Review: Integrate your shipping data from the past year (routes, container volumes, cargo weights, and costs) to clarify your needs and expectations of your freight forwarder.
Partner Selection: Look for freight forwarders with significant technological investment (strong online platforms and API capabilities), advanced concepts (willing to explore contract pricing and cost-plus models), and professional service teams. Don’t just select based on a quote email.
Pilot Partnership: Select a key route for a pilot program, requiring the forwarder to quote and operate through the online platform and provide regular data reports.
In-depth Negotiation: Based on pilot data and future forecasts, negotiate long-term contract prices and explore the possibility of “locking in” prices.
System Integration: After trust is established, promote IT-level API integration to achieve the most efficient collaboration.
Summary:
The true “best price” is not a static number, but a dynamic process achieved through transparency achieved through digital tools and risk management and locking in through strategic freight forwarding partnerships.
Digital tools provide you with the ability to “see clearly,” which is the foundation.
The new partnership model provides you with the ability to “negotiate” and “lock in” prices, which is the core.