July 2002 | Commentary | Carriers Corner

Human Resources Vital in the Age of Technology

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Technology makes the modern world go 'round, or at the very least makes modern business work. But to build a global freight forwarding network—and make it thrive—technology is not an answer in and of itself. It is a cultural and business evolution.

Before implementing technology, freight forwarders must have the right professionals in the right place at the right time. Technology can always be bought and implemented, but it's the people that make it work.

While dot.coms could help customers find the best dog toys, the model does not work in freight forwarding. A good freight forwarding and logistics company can not only provide transportation and inventory control, but financial and documentation transaction management to its customers.

When a company deals in trade, it deals in the movement of goods, financial transactions between companies, insurance, and documentation at both ends, not to mention international export and import controls. Companies find they need freight forwarders with the depth of knowledge and understanding of local and international issues to support all these critical functions.

As more companies extend their reach to a global market, they discover they need the broad range of support that only a well-connected freight forwarder can deliver.

Sure, a freight-forwarder can have an 800-number, but there is no guarantee that the customers will speak to the same person every time they call. Problems can be addressed via e-mail, but the response time for a spoken concern is faster.

In addition, conversations lead to relationships with specific professionals who know account details. Building a network with immediate access to any country, however, takes time, money, and constant attention and support for the partners and their clients.

For most freight forwarders, that means global partnerships. That said, is it better or easier for a freight forwarder to have its own, registered offices abroad, or should a firm create a network of established partners overseas?

Either can work, but it is practically impossible for a company to open and maintain its own offices in every major city around the world. Major internationally known name-brand companies operate through a combination of franchises and their own properties, but few others can duplicate this success formula.

There are several reasons why.

First, few companies can afford the expense of opening and operating offices everywhere they do business. A company planning to set up its own offices requires managers with experience in the regions the freight forwarder intends to serve.

In addition to having experience, knowledge of company culture and local market customs is essential to the success of the operation. It is also difficult in a startup situation to compete against providers that have a well-established customer base and a high-quality reputation.

The ideal situation lies, again, in forging strong professional relationships worldwide. Establishing a global network of partners requires an extensive process of elimination that ultimately results in finding a partner that matches your company's corporate culture.

While this takes a long time, it is a more effective proposition than opening new offices. Even if an American freight forwarder opened worldwide offices, it must still manage relationships or alliances with local service providers who best understand local business and governmental practices.

In today's fast paced business environment it is technology that makes these relationships prosper. Because of technology, customers have access to the total information available from these partners.

It is vital that partners have sophisticated information and communications systems. Even if one of the partners does not, the less-sophisticated partner can rely on the lead partner. Partnerships provide freight forwarders with global representation and expertise in each market.

But our often U.S.-centric view of the world can leave us blind to the technological capabilities of other countries. Advances in Europe are, in some ways, superior to those in the United States. In other nations, including Venezuela, Colombia and Brazil, technology has leapfrogged over the interim steps of advancement, allowing companies there to install more sophisticated telephony and online computer systems.

In particular, the Internet has helped small and mid-sized freight forwarders introduce worldwide communications between offices and customers. Once a freight forwarder combines personal contact with these technologies, it can deliver world-class service! These global partnerships enable small and mid-sized freight forwarders to compete with the largest companies in the market. This is accomplished when international partners combine their global buying power and leverage to get the best deals for shipping, insurance and fuel.

Additionally, partnerships are changing at a very basic level. U.S. freight forwarders have sought international partners for many years. Now, companies from all over the world seek U.S. partners.

Interpersonal relationships are also the linchpin to the innate flexibility freight forwarding companies possess when deciding how to transport cargo overseas. It is vital that carriers, shippers and consignees work with knowledgeable and experienced freight forwarders. Online sources can alert U.S. forwarders to transportation issues domestically and abroad, but only professionals "on the ground" at international ports can adequately monitor and decipher continually changing shipping conditions in these places.

The constant flux in worldwide market conditions makes it impractical for most transportation providers to own their own fleet of aircraft. Again, this is where the flexibility and expertise of freight forwarding companies is crucial.

For a company that needs to serve a particular international market for example, paying for the return trip is economically unfeasible because there is no cargo to fill the aircraft space. The decision then remains whether to continue to serve this particular market. A traditional freight forwarding company can help make serving this specific market worthwhile via existing means of transport or by developing new alternatives.

Shipping companies that customarily use a single method of transportation lack the knowledge necessary to ferret out alternative transportation. The largest companies of all kinds realize this and are aligning themselves with freight forwarders and customs brokerages. Some are even buying freight forwarding companies or forming divisions to handle logistics.

In the end, it matters little how much technical wizardry a company possesses if customers do not have someone, somewhere, to talk to and represent their interests overseas.

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