Exporters Choice of Freight Forwarder in
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
Research Article
Exporters Choice of Freight Forwarder in Moving Their
International Cargo
Authors:
K. Parimala *
Address For correspondence:
1
Assistant Professor, PSGR Krishnammal College for Women, Coimbatore
INTRODUCTION
The goods are moved from the manufacturers/exporters to the customers/consumers by the freight
forwarders with their effective utilization of the road/sea/air transportations. The key concept in
freight forwarding service is the delivery of the cargo till the destination point or at the forwarders
place to perform the operations to bring the goods to their end users. The international freight
forwarders act as bridge between the manufacturers/exporters to the destination of the consumers.
Their role through the development of multimodal transport operations is important to increase
efficiency in international movement of goods, which is a critical component in the quest of
improving our total export competitiveness.
LITERATURE REVIEW
The study “Freighter operators' choice of airport: a three-stage process 1” focuses on the
increasing levels of congestion at the major cargo hubs and further restrictions on noise and
night-time flying, freighter operators' airport choice is a complex and important issue. The
aim is to identify the factors that affect the airport choice of freighter operators through a
review of the published literature.
This paper “A study of the freight forwarding industry in Hong Kong 2”, reports the results
of survey administered to over 1,100 companies in the industry, examining their
demographic profiles, capability in providing different types of logistics services, service
performance and the perceived prospects of the industry. While many freight forwarders in
Hong Kong are highly capable of providing freight forwarding and many traditional logistics
services, they seem to lack the ability to provide other value-added services.
urspari2003@rediffmail.com *Corresponding Author Email-Id
Manuscript Id: iJARS/692
1
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
This research “Profiling international freight forwarders: an update” provides results from
a recent empirical study of US-based international freight forwarders (IFFs). Compares IFF
demographics with those from previous empirical research and finds that the IFF industry is
still dominated by small companies and that IFFs continue to diversify their revenue bases.
Presents information concerning contemporary issues affecting the forwarding industry and
finds that IFFs generally view the Internet as a complement to, rather than a substitute for,
EDI.
The Study focuses on “The Differentiation In Service And Performance By The Freight
Forwarders In Logistic Operations.
NEED FOR THE STUDY
Depending on the type of forwarder or their specialty, they will set you up with insurance, they may
assist in inventory management, transshipment and some will handle customs clearance. Many
times freight forwarders are specialists in a particular market. If they handle the same cargo for
various different companies who are shipping similar goods it can be very beneficial financially.
Price, security, and compliance rank high on the list of criteria for selecting an international freight
forwarder on the part of shipper. Auctions have gained popularity, with freight contracts going to the
lowest bidder. But choosing on price alone can leave a company shortchanged.
So the researcher has keen interest towards learning the perception of exporters in Coimbatore
towards their choice of freight forwarders in moving their international freight.
SCOPE OF THE STUDY
A recent study found that some IFF companies begin by offering value added services and move
towards becoming a logistics service provider. The evolution of the concept of "total logistics
support" led IFF companies to offer value added services such as customs clearance, logistics
management, information technology and more. In order to measure to what extent clients purchase
the additional services that IFFs offer, we defined scope-of-use of IFF services.
We employ scope-of-use as a segmentation tool and define three categories which classify scope-ofuse in this study: (1) international forwarding only; (2) a complete "solution" for all of an
organization's logistics requirements; (3) international forwarding requirements and part of the
organization's logistics requirements.
OBJECTIVES OF THE STUDY
To study the role of freight forwarders in international logistics.
To access the perception of shippers towards the choice of freight forwarders in moving their
freight internationally.
Manuscript Id: iJARS/692
2
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
FREIGHT FORWARDERS – “Logistic Architect”
Freight forwarders are generally viewed as a necessity only by businesses dealing with international
business. However, they can be a godsend to any individual faced with an international freight
problem. Freight forwarders provide logical and professional shipping solutions to any client
requiring their expertise. Although international freight shipping might seem like a straight forward
affair, unless the shipper is well versed in the many treaties governing international trade and
import/export restrictions, then he might run into unforeseen problems even if all he moves is his
personal belongings.
Why does a Shipper need a Freight Forwarder?
Hiring the right freight forwarders to help you with your international freight requirements is a
logical first step to getting your belongings to your ultimate destination. Regardless of what you
have to ship over, unless you are relocating with nothing more than a backpack, then you will have
to find shippers to help you book passage on a ship or aircraft, deal with customs obligations and fill
out all of the necessary documentation. International freight is especially tricky because you must fill
out the correct papers and file them with the proper authorities in a timely fashion or risk having
your belongings held up at customs for an indefinite length of time.
Freight Forwarder (or) Shipping Company?
Shipping goods overseas also involves having to rent a container to hold all of your belongings.
Unless you know exactly what kind of a container to rent and from where you can obtain such a
vessel on your own, you will have to use the services of either a shipping company or a freight
forwarder. While a shipping company might be able to cover some bases, they will undoubtedly
have to call on third parties to fill other aspects of your move. Most international freight companies
will partner up with customs brokers and will book space on ships and aircraft in order to ensure
space for their customers' shipments. However, freight forwarders generally tend to either have all of
these services offered under one, practical umbrella or they have a very extensive network of
partners, meaning that they have are able to offer you a turn-key service for your international
freight shipping needs.
ROLE OF FREIGHT FORWARDERS
Traditionally, the role of freight forwarder was simply to undertake transportation on behalf of the
shipper/exporter. However, they must now provide a whole range of additional services, to keep up
with competition.
Manuscript Id: iJARS/692
3
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
On behalf of the shipper , they can provide a quotation on:
Freight costs
Port charges
Consular fees
Cost of special documentation
Insurance costs and
Freight Forwarder’s fees.
This information is used to prepare an accurate price quotation to foreign customers. At the shipper’s
request, the freight forwarders can make the actual arrangements and provide the necessary services
for expediting the shipment to its overseas destination. This can include:
Booking space with the carrier
Completing export documentation
Arranging for cargo insurance
Advising on foreign import regulations
Providing guidance on packaging, marking and labeling
Arranging for products to be packed and containerized at the exporter’s request
Export clearance.
SHIPPERS CHOICE IN SELECTING A FREIGHT FORWARDER
Shippers/Exporters each have their own needs to consider when selecting a freight forwarder, and
the following are some factors to be taken into account when selecting a freight forwarder.
It's important to look for a freight forwarder that is accredited. They must have a license from the
Federal Maritime Commission in order to handle ocean freight. Freight forwarders that handle air
freight must be registered with the International Air Transport Association (IATA).
You should determine whether the freight forwarder is financially stable. You can request credit
references and confirm them. You could also consult freight companies to see whether the freight
forwarder has a good payment record. If the freight forwarder is a large company, you could see
whether it is listed on the New York Stock Exchange or the NASDAQ and request a copy of their
annual report.
You could ask the freight forwarder for references from its customers, and then call those customers
to ask about their satisfaction with the service provided. You could ask the freight forwarder
directly, or its customers, if the forwarder has knowledge and experience with your company's
product, your preferred mode of transportation, and the destination country.
Manuscript Id: iJARS/692
4
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
You should find out whether the forwarder is large enough to meet your company's exporting needs.
Do they have an office in your destination market?
Do they have a network of agents abroad?
Do their offices and agents have the ability to communicate on line?
Do they have warehouse facilities, in case you need that service?
Do they have sufficient staff to manage the volume and needs of your exporting company?
Do they have insurance against errors and omissions?
Are they willing to take the necessary time to explain the terms and procedures in a way that
you can clearly understand?
You should inquire about the cost of using the freight forwarder's services.
o How do they charge for their services?
o Do they charge the exporter a fixed fee plus reimbursable expenses?
o Do they charge the freight company a percentage of the cost of freight?
o How much do they charge for packing and documentation?
10 Tips for choosing the right Freight Forwarder
1. Determine your overall requirements. Look at imports, exports, distribution and brokerage. Be
clear about your objectives, and be able to compare freight forwarder responses equally. Think in
terms of total cost, not just transportation cost by lane. Decide if you want a large or small partner.
Look at the coverage necessary to support your business, as well as your customer service,
information technology, and reporting needs.
2. Get internal management buy- in. This is the toughest part. Be sure that management is
committed to making the change and your internal organization supports the decision.
3. Come to the negotiating table prepared. Have your demands ready. Specify your objectives and
why you are seeking a new partner. Identify a target start date. Have the information on commodities
and density, as well as terms of sale. Know your criteria; know your volumes by lane; and know the
product and service levels you need.
4. Do your homework. Research the forwarders you are interested in. Know their financial strength,
coverage, and local office. Talk to colleagues in your market about which forwarders they use and
why.
5. Talk to the forwarders. Get out into the field. Invite these service providers to see you. Ask the
forwarders what information they need from you so they can provide the best shipping solutions.
Manuscript Id: iJARS/692
5
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
6. Build your Request for Quote (RFQ). Look over your current RFQ to ensure that it's complete
and up to date. Provide sample agreements and the terms and conditions you desire.
7. Be selective. Issue RFQs to "qualified" companies you have pre-screened. Don't blast RFQs out to
the world—you will not have enough time to do an efficient review.
8. Set a time frame . Determine a reasonable time frame for forwarders to reply to your RFQ. Set up
a question-and-answer period with a minimum of three weeks for forwarders to provide
comprehensive responses.
9. Narrow your choices. Go through the RFQs and invite forwarders who meet your criteria to a
follow-up meeting—but have a conversation with them in advance so your concerns can be better
addressed. Listen to their presentations, but ask questions based on their initial responses.
10. Negotiate the nuances and make your choice. Starting up with a new freight forwarder is just as
critical as the selection, so set a reasonable time frame and appoint a team to get it done.
IFF Evaluation Factors
Factors
Factor Explanation
Expertise
Personal attention
Customization
Flexibility
Additional logistic services
Reliability
Meeting Deadlines
Degree of expertise in providing relevant services
Ability to work with one contact point personnel
Ability to meet unique customer requirements
Ability to provide both air and sea freight services
Ability to provide a wide range of services
Reliability of the IFF's service
How well the IFF meets pickup, delivery and distribution
deadlines
No. of branches/offices worldwide; no. of countries in which
the IFF is represented
How well the IFF meets ISO 9002 and IATA and FIATA
standards
Years of forwarding activity
No. of IFF company employees
The ability to access/interface with the IFF's information
technology
The reliability of IFF's information systems
The ability to receive price quotes over the Internet
The customer's ability to produce status reports independently
Ability to offer attractively priced services
Ability to minimize the customer's tax payments
Ability to create a customs classification data base
International Deployment
Quality certification
Experience
Company size
Information availability
Reliable information
Online pricing
Reports tools
Competitive prices
Taxation
Classification retention
Manuscript Id: iJARS/692
6
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
SUMMARY
The factor perceived as most important to international traders is Reliability. We also found that the
Reliability group of factors is the most important. The second most important perceived factor is
Deadlines. The ability of forwarders to meet deadlines directly affects their clients' ability to meet
their own obligations towards their customers and to provide them with reliable supply schedules.
The third most important factor is Competitive Prices. Selecting an IFF company is basically an
economic decision, based, to a large extent, on cost considerations. We could find significant
differences in regard to the number of destinations a client may have. We found that the importance
of the Reliability group and Service and Prices group is significantly higher for respondents who
work in a company with a smaller number of destinations. Consequently the study suggests that the
aggregate data regarding the group criteria is sound and not influenced by the shippers
characteristics and the business environment.
The present study investigated the perception of IFF customers as to the most important factors in
selecting an IFF service provider. Future research might examine the importance of key factors from
the viewpoint of the freight service providers and then to compare the different perceptions of
providers and clients. Another area for further research would be to repeat the present study using a
different sampling frame, which would examine whether the results would be similar or different
among IFF users from other countries.
REFERENCES
[1] D. Wang, Y. Tian, and Y. Hu, "Empirical study of supplier selection strategies across the supply chain management
in manufacturing companies", International Engineering Management Conference, Proceedings, 2004, pp 85-89.
[2] V. Markides, and M. Holweg, "On the diversification of international freight forwarders A UK perspective", Int. J.
Physic. Distr. Logist. Manag., vol. 36, pp. 336-359, 2006.
[3] P.R. Murphy and J.M. Daley, "Investigating selection criteria for international freight forwarders", Transp. J., vol.
37, pp. 29-36, 1997.
[4] A. Özsomer, M. Mitri, and S.T. Cavusgil, "Selecting an international freight forwarder: an expert system
application", Int. J. Physic. Distr. Logist. Manag., vol. 23, pp11-22, 1993.
[5] R.C. Lieb, R.A. Millen, and W.L.N. Van, "Third-party Logistics Services: A Comparison of Experienced American
and European Manufactures", Int. J. Physic. Distr. Logist. Manag., vol. 23, pp.35-44, 1993.
[6] S.M. Matear, and R. Gray, "Factors influencing freight service choice for shippers and freight suppliers", Int. J.
Physic. Distr. Logist. Manag., vol. 23, pp. 25-36, 1993.
[7] E.L. Pedersen, and R. Gray, "The transport selection criteria of norwegian exporters", Int. J. Physic. Distr. Logist.
Manag., vol. 28, pp. 108-116, 1998.
[8] S.R. Premeaux, "Motor carrier selection criteria: perceptual differences between shippers and motor carriers",
Transp. J., vol. 42, pp. 28-38, 2002.
Manuscript Id: iJARS/692
7
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
[9] M.M. Akarte, N.V. Surendra, B. Ravi, and N. Rangaraj, "Webbased casting supplier evaluation using analytical
hierarchy process",J. Operat. Res. Society., vol. 52, pp. 511-522, May 2001.
[10] C. Kahraman, U. Cebeci, and Z. Ulikan, “Multi-criteria supplier using fuzzy ahp", Logist. Info. Manag., vol. 16, pp.
382-395, 2003. [11] M.D.Voss, T.J. Page, B. Keller, and J. Ozment, "Determining important carrier attributes: a fresh
perspective using the theory of reasoned action", Transp. J., vol. 45, pp.7-19, 2006.
[12] M. A. McGinnis, "A comparative evaluation of freight transportation choice models", Transp. J., vol. 29, pp.36-46,
1989.
[13] P. R. Murphy, and J.M. Daley, "Profiling international freight forwarders: an update", Int. J. Physic. Distr. Logist.
Manag., vol.31, pp. 152-159, 2001.
Manuscript Id: iJARS/692
8
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
Research Article
Exporters Choice of Freight Forwarder in Moving Their
International Cargo
Authors:
K. Parimala *
Address For correspondence:
1
Assistant Professor, PSGR Krishnammal College for Women, Coimbatore
INTRODUCTION
The goods are moved from the manufacturers/exporters to the customers/consumers by the freight
forwarders with their effective utilization of the road/sea/air transportations. The key concept in
freight forwarding service is the delivery of the cargo till the destination point or at the forwarders
place to perform the operations to bring the goods to their end users. The international freight
forwarders act as bridge between the manufacturers/exporters to the destination of the consumers.
Their role through the development of multimodal transport operations is important to increase
efficiency in international movement of goods, which is a critical component in the quest of
improving our total export competitiveness.
LITERATURE REVIEW
The study “Freighter operators' choice of airport: a three-stage process 1” focuses on the
increasing levels of congestion at the major cargo hubs and further restrictions on noise and
night-time flying, freighter operators' airport choice is a complex and important issue. The
aim is to identify the factors that affect the airport choice of freighter operators through a
review of the published literature.
This paper “A study of the freight forwarding industry in Hong Kong 2”, reports the results
of survey administered to over 1,100 companies in the industry, examining their
demographic profiles, capability in providing different types of logistics services, service
performance and the perceived prospects of the industry. While many freight forwarders in
Hong Kong are highly capable of providing freight forwarding and many traditional logistics
services, they seem to lack the ability to provide other value-added services.
urspari2003@rediffmail.com *Corresponding Author Email-Id
Manuscript Id: iJARS/692
1
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
This research “Profiling international freight forwarders: an update” provides results from
a recent empirical study of US-based international freight forwarders (IFFs). Compares IFF
demographics with those from previous empirical research and finds that the IFF industry is
still dominated by small companies and that IFFs continue to diversify their revenue bases.
Presents information concerning contemporary issues affecting the forwarding industry and
finds that IFFs generally view the Internet as a complement to, rather than a substitute for,
EDI.
The Study focuses on “The Differentiation In Service And Performance By The Freight
Forwarders In Logistic Operations.
NEED FOR THE STUDY
Depending on the type of forwarder or their specialty, they will set you up with insurance, they may
assist in inventory management, transshipment and some will handle customs clearance. Many
times freight forwarders are specialists in a particular market. If they handle the same cargo for
various different companies who are shipping similar goods it can be very beneficial financially.
Price, security, and compliance rank high on the list of criteria for selecting an international freight
forwarder on the part of shipper. Auctions have gained popularity, with freight contracts going to the
lowest bidder. But choosing on price alone can leave a company shortchanged.
So the researcher has keen interest towards learning the perception of exporters in Coimbatore
towards their choice of freight forwarders in moving their international freight.
SCOPE OF THE STUDY
A recent study found that some IFF companies begin by offering value added services and move
towards becoming a logistics service provider. The evolution of the concept of "total logistics
support" led IFF companies to offer value added services such as customs clearance, logistics
management, information technology and more. In order to measure to what extent clients purchase
the additional services that IFFs offer, we defined scope-of-use of IFF services.
We employ scope-of-use as a segmentation tool and define three categories which classify scope-ofuse in this study: (1) international forwarding only; (2) a complete "solution" for all of an
organization's logistics requirements; (3) international forwarding requirements and part of the
organization's logistics requirements.
OBJECTIVES OF THE STUDY
To study the role of freight forwarders in international logistics.
To access the perception of shippers towards the choice of freight forwarders in moving their
freight internationally.
Manuscript Id: iJARS/692
2
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
FREIGHT FORWARDERS – “Logistic Architect”
Freight forwarders are generally viewed as a necessity only by businesses dealing with international
business. However, they can be a godsend to any individual faced with an international freight
problem. Freight forwarders provide logical and professional shipping solutions to any client
requiring their expertise. Although international freight shipping might seem like a straight forward
affair, unless the shipper is well versed in the many treaties governing international trade and
import/export restrictions, then he might run into unforeseen problems even if all he moves is his
personal belongings.
Why does a Shipper need a Freight Forwarder?
Hiring the right freight forwarders to help you with your international freight requirements is a
logical first step to getting your belongings to your ultimate destination. Regardless of what you
have to ship over, unless you are relocating with nothing more than a backpack, then you will have
to find shippers to help you book passage on a ship or aircraft, deal with customs obligations and fill
out all of the necessary documentation. International freight is especially tricky because you must fill
out the correct papers and file them with the proper authorities in a timely fashion or risk having
your belongings held up at customs for an indefinite length of time.
Freight Forwarder (or) Shipping Company?
Shipping goods overseas also involves having to rent a container to hold all of your belongings.
Unless you know exactly what kind of a container to rent and from where you can obtain such a
vessel on your own, you will have to use the services of either a shipping company or a freight
forwarder. While a shipping company might be able to cover some bases, they will undoubtedly
have to call on third parties to fill other aspects of your move. Most international freight companies
will partner up with customs brokers and will book space on ships and aircraft in order to ensure
space for their customers' shipments. However, freight forwarders generally tend to either have all of
these services offered under one, practical umbrella or they have a very extensive network of
partners, meaning that they have are able to offer you a turn-key service for your international
freight shipping needs.
ROLE OF FREIGHT FORWARDERS
Traditionally, the role of freight forwarder was simply to undertake transportation on behalf of the
shipper/exporter. However, they must now provide a whole range of additional services, to keep up
with competition.
Manuscript Id: iJARS/692
3
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
On behalf of the shipper , they can provide a quotation on:
Freight costs
Port charges
Consular fees
Cost of special documentation
Insurance costs and
Freight Forwarder’s fees.
This information is used to prepare an accurate price quotation to foreign customers. At the shipper’s
request, the freight forwarders can make the actual arrangements and provide the necessary services
for expediting the shipment to its overseas destination. This can include:
Booking space with the carrier
Completing export documentation
Arranging for cargo insurance
Advising on foreign import regulations
Providing guidance on packaging, marking and labeling
Arranging for products to be packed and containerized at the exporter’s request
Export clearance.
SHIPPERS CHOICE IN SELECTING A FREIGHT FORWARDER
Shippers/Exporters each have their own needs to consider when selecting a freight forwarder, and
the following are some factors to be taken into account when selecting a freight forwarder.
It's important to look for a freight forwarder that is accredited. They must have a license from the
Federal Maritime Commission in order to handle ocean freight. Freight forwarders that handle air
freight must be registered with the International Air Transport Association (IATA).
You should determine whether the freight forwarder is financially stable. You can request credit
references and confirm them. You could also consult freight companies to see whether the freight
forwarder has a good payment record. If the freight forwarder is a large company, you could see
whether it is listed on the New York Stock Exchange or the NASDAQ and request a copy of their
annual report.
You could ask the freight forwarder for references from its customers, and then call those customers
to ask about their satisfaction with the service provided. You could ask the freight forwarder
directly, or its customers, if the forwarder has knowledge and experience with your company's
product, your preferred mode of transportation, and the destination country.
Manuscript Id: iJARS/692
4
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
You should find out whether the forwarder is large enough to meet your company's exporting needs.
Do they have an office in your destination market?
Do they have a network of agents abroad?
Do their offices and agents have the ability to communicate on line?
Do they have warehouse facilities, in case you need that service?
Do they have sufficient staff to manage the volume and needs of your exporting company?
Do they have insurance against errors and omissions?
Are they willing to take the necessary time to explain the terms and procedures in a way that
you can clearly understand?
You should inquire about the cost of using the freight forwarder's services.
o How do they charge for their services?
o Do they charge the exporter a fixed fee plus reimbursable expenses?
o Do they charge the freight company a percentage of the cost of freight?
o How much do they charge for packing and documentation?
10 Tips for choosing the right Freight Forwarder
1. Determine your overall requirements. Look at imports, exports, distribution and brokerage. Be
clear about your objectives, and be able to compare freight forwarder responses equally. Think in
terms of total cost, not just transportation cost by lane. Decide if you want a large or small partner.
Look at the coverage necessary to support your business, as well as your customer service,
information technology, and reporting needs.
2. Get internal management buy- in. This is the toughest part. Be sure that management is
committed to making the change and your internal organization supports the decision.
3. Come to the negotiating table prepared. Have your demands ready. Specify your objectives and
why you are seeking a new partner. Identify a target start date. Have the information on commodities
and density, as well as terms of sale. Know your criteria; know your volumes by lane; and know the
product and service levels you need.
4. Do your homework. Research the forwarders you are interested in. Know their financial strength,
coverage, and local office. Talk to colleagues in your market about which forwarders they use and
why.
5. Talk to the forwarders. Get out into the field. Invite these service providers to see you. Ask the
forwarders what information they need from you so they can provide the best shipping solutions.
Manuscript Id: iJARS/692
5
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
6. Build your Request for Quote (RFQ). Look over your current RFQ to ensure that it's complete
and up to date. Provide sample agreements and the terms and conditions you desire.
7. Be selective. Issue RFQs to "qualified" companies you have pre-screened. Don't blast RFQs out to
the world—you will not have enough time to do an efficient review.
8. Set a time frame . Determine a reasonable time frame for forwarders to reply to your RFQ. Set up
a question-and-answer period with a minimum of three weeks for forwarders to provide
comprehensive responses.
9. Narrow your choices. Go through the RFQs and invite forwarders who meet your criteria to a
follow-up meeting—but have a conversation with them in advance so your concerns can be better
addressed. Listen to their presentations, but ask questions based on their initial responses.
10. Negotiate the nuances and make your choice. Starting up with a new freight forwarder is just as
critical as the selection, so set a reasonable time frame and appoint a team to get it done.
IFF Evaluation Factors
Factors
Factor Explanation
Expertise
Personal attention
Customization
Flexibility
Additional logistic services
Reliability
Meeting Deadlines
Degree of expertise in providing relevant services
Ability to work with one contact point personnel
Ability to meet unique customer requirements
Ability to provide both air and sea freight services
Ability to provide a wide range of services
Reliability of the IFF's service
How well the IFF meets pickup, delivery and distribution
deadlines
No. of branches/offices worldwide; no. of countries in which
the IFF is represented
How well the IFF meets ISO 9002 and IATA and FIATA
standards
Years of forwarding activity
No. of IFF company employees
The ability to access/interface with the IFF's information
technology
The reliability of IFF's information systems
The ability to receive price quotes over the Internet
The customer's ability to produce status reports independently
Ability to offer attractively priced services
Ability to minimize the customer's tax payments
Ability to create a customs classification data base
International Deployment
Quality certification
Experience
Company size
Information availability
Reliable information
Online pricing
Reports tools
Competitive prices
Taxation
Classification retention
Manuscript Id: iJARS/692
6
International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
www.ijars.in
SUMMARY
The factor perceived as most important to international traders is Reliability. We also found that the
Reliability group of factors is the most important. The second most important perceived factor is
Deadlines. The ability of forwarders to meet deadlines directly affects their clients' ability to meet
their own obligations towards their customers and to provide them with reliable supply schedules.
The third most important factor is Competitive Prices. Selecting an IFF company is basically an
economic decision, based, to a large extent, on cost considerations. We could find significant
differences in regard to the number of destinations a client may have. We found that the importance
of the Reliability group and Service and Prices group is significantly higher for respondents who
work in a company with a smaller number of destinations. Consequently the study suggests that the
aggregate data regarding the group criteria is sound and not influenced by the shippers
characteristics and the business environment.
The present study investigated the perception of IFF customers as to the most important factors in
selecting an IFF service provider. Future research might examine the importance of key factors from
the viewpoint of the freight service providers and then to compare the different perceptions of
providers and clients. Another area for further research would be to repeat the present study using a
different sampling frame, which would examine whether the results would be similar or different
among IFF users from other countries.
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International Journal of Applied Research and Studies (iJARS)
ISSN: 2278-9480 Volume 2, Issue 12 (Dec - 2013)
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