5 Tips for Small-Medium Freight Forwarders to Compete in 2023

As the freight forwarding market grows, many established players are finding it increasingly difficult to stay competitive. The changing landscape of geopolitical conflict, economic instability, and a rise in digitization, only adds to the pressure and challenges faced by forwarders.

While it’s hard to predict what’s to come, one thing is clear: many freight forwarders will need to make significant changes to remain competitive.

Here are 5 steps you can take to get ahead this year.

1. Stay on top of logistics industry news

Although the logistics and shipping industry has been around for thousands of years, it’s still undergoing frequent changes. Especially now, as the industry races to catch up with modern technology, it’s getting increasingly critical to keep up with developments so you can be ready to pivot your strategies on short notice if needed. It’s also not enough to focus on only your clients or your specialization. Seemingly unrelated developments can majorly impact your work, even if it doesn’t happen right away.

For instance, prolonged issues in ocean freight may trigger a rise in demand for air shipping options. If you’re a forwarder who’s exclusively focused on air freight news, you may not know what’s happening until you start having trouble booking shipments for your customers. Contrastingly, if you’ve been keeping a pulse on the story, you can take desperation in the ocean freight market as a signal to secure your contracts as early as possible.

To stay updated on what’s happening in the industry, take some time to explore various logistics news sources and choose a few favorites to follow consistently. Since combing through every publication in the shipping industry could take weeks, here are a couple of shorter lists to start out with:



2. Implement digital solutions to support your workforce

In an era of worldwide labor shortages combined with relatively strong consumer demand, many forwarders are struggling to keep up with their workloads. Now more than ever, it’s critical to find ways to scale your business without relying on new hires and, where possible, to manage the burden on your current workforce to avoid burnout.

Fortunately, many freight forwarding companies can significantly increase their team’s efficiency simply by automating manual tasks. From delivering routine updates to building custom spreadsheets, many of your employees’ day-to-day operations can be handled by digital logistics solutions.

Shifting repetitive tasks off your team can give your employees more time to focus on more important projects, leading to higher engagement and satisfaction in the workplace. By leveraging automation, you can also reduce the need for constant recruitment to keep up with business growth, enabling your operations to scale more quickly.

3. Build trust with your shippers

In this volatile market, shippers may be extra cautious about who they conduct business with, and on what terms. Many are hesitant to sign the same long-term contracts they normally would, regarding even existing relationships with a level of wariness.

While this mistrust can have negative implications across the supply chain, forwarders can also leverage this tension to stand out from competitors. Stanley Black & Decker’s Jeff Douville explained the sentiment to The Loadstar. “We are looking at our partners, and some have demonstrated a higher level of character than others – those are the ones we want to work with,” Douville said. “We need them, and they need us. Our mantra is to secure reliable capacity at the best fixed rate.”

Building trust isn’t any easy task, especially in a short amount of time. However, there are a few ways to demonstrate integrity and transparency from the start:

  • Give them visibility
  • Be open about issues that come up
  • Provide personalized support

Give them visibility

Some BCOs may think of the shipping process as a black box, where the status of their cargo is uncertain until it arrives at the final destination. During transit, they have to trust that their forwarder is sending them accurate updates along the way.

As a freight forwarder, you can implement a software tool to give them direct visibility into their shipment status. That way, they can access the information they need to feel more in control as their cargo moves from point A to point B.

Be open about issues that come up

When it comes to shipping, delays are often inevitable. Whether conflicts arise due to political developments or weather conditions, you can’t always deliver on your shipment as promised. While delivery exceptions may be frustrating, being left in the dark while your shipment is late is even worse.

That’s why it’s important to be proactive about reaching out when major issues arise, and avoid overpromising just to appease your customer in the short term.

Provide personalized support

Even as shippers increasingly seek out digital customer experience solutions, relationships are still central to success in the freight forwarding industry. In a survey we conducted with FreightWaves, we found that 89% of shippers rate customer service and individualized attention as fairly or very important when working with a freight forwarder.

Delivering personalized customer service rarely means running your business by hand. In fact, digitizing your processes can often improve customer satisfaction. That’s because when your shippers have constant access to basic information like ETAs and status updates, you’ll be able to focus your time together on more meaningful discussions.

In a Logixboard/Freight Trade Alliance webinar, NEOLink director Sean Crook shared about his experience with a customer after they started partnering with Logixboard. “The conversations are more efficient in terms of the type of questions that he asks us,” Crook said. “We have good, engaging conversations.”

4. Level up your customer experience

Despite the importance of personalized customer service, it’s not always enough to stand out against competitors. After all, many traditional freight forwarders have been building connections in the industry over several generations.

When it comes down to it, shippers are increasingly searching for partners who can provide them with a streamlined experience. That’s why many established forwarders are losing customers to digital-first solutions like Flexport. If you can deliver a streamlined experience while providing personalized customer service, you’ll be able to differentiate your business from competitors on both sides.

Consider differentiating your business by investing in a customer experience platform. Even if you don’t have the resources to build your own system, you can still buy an out-of-the-box solution to provide your customers with features like shipment visibility or document management. In addition to reducing churn, this can also boost revenue, as 83% of shippers are willing to pay higher rates to work with a tech-focused forwarder.

5. Secure new business by communicating your value props

Just as operational efficiency is critical to cutting costs, you can’t grow your business without leaning into sales and marketing. Regardless of how efficient your freight forwarding operation is, you can’t win new business without pitching your services to customers.

Work with your sales team to develop messaging around your services. Talk to your customers to find out what differentiates your company, and work that into your pitch. When going into sales meetings, be prepared with information your prospective customers might be interested in, such as tech solutions, timeliness statistics, and testimonials.

In the end, your sales materials should illustrate what it’s like to work with you while answering the question, “Why should I choose you over your competitors?”

Final thoughts

Staying competitive in 2023 means upgrading your operations and customer experience.

The logistics industry is undergoing rapid changes, from a heightened reliance on digital solutions to a shift toward sustainability. For many freight forwarders, it’s not enough to simply continue with what’s worked in the past. It’s time to start investing in new solutions and training to get ahead in the changing landscape.

Want to learn more about how digitization helped our customers win back customers and boost revenue? Check out these case studies: