In this webinar, Logixboard’s Rachel Charboneau and Jon Bass sat down with Container xChange co-founder Dr. Johannes Schlingmeier to discuss how forwarders are expanding their shipping volumes in the current market. They covered a range of topics, including:
In a pressed economic environment, it can be hard to broach the topic of expanding accounts. After all, with the entire industry focused on retaining business, winning shipments from your competitors can be especially challenging. Even so, our panel explained that it’s still possible, as long as you lead with the right value points.
Both Schlingmeier and Bass cited pricing as a major factor in retaining and expanding business. “What’s become baseline for freight forwarders to win new business or expand their current business is competitive pricing,” Bass said. “You can’t get into the conversation if the price point isn’t where it needs to be.”
However, Bass emphasized the importance of viewing pricing holistically, rather than focusing on base rates. “It’s important to understand the actual cost versus intangible costs of who you choose to use,” he said. “You can look at things like performance; if the performance over the previous year has been problematic, then the cost of those delays, lack of communication, and other issues can end up costing more than the difference between the cheaper and the more expensive options.”
Bass also asserted that the responsibility falls on freight forwarders to drive home the value you provide. He suggested holding open discussions to review the specifics of your offerings. In these conversations, you can break down each component of your shipping service and how it decreases the customer’s overall cost.
Freight business conversations have evolved in recent years. As technology has enabled improved analytics capabilities, many shippers have come to expect more detailed insights in their shipment process.
To accommodate this new standard, Bass advised forwarders to give their customers a full picture of how they’re using data to make their decisions. For instance, with a rate analysis platform like Xeneta, logistics providers can conduct research to make sure their prices are in line with the market. On the flip side, a marketplace like Container xChange ensures they’ll get the best rate when securing a container.
Bass explained that by presenting your data solutions to customers, you can show them how you’re leveraging technology to make the best business decisions. “As a freight forwarder, the more options and background you’re providing in those conversations, the more it seems that you’re genuinely providing the customer with options around services that they can pick from, rather than something that just suits you as a business,” he said.
Schlingmeier suggested even going a step further to provide specific examples of how you can help your customer’s business if they expand their volumes. “If you’re preparing for that pitch meeting and you know from your customers where you already have been in business with them– which are the main ports, the main routes where they typically encounter detention charges, you can start preparing options for those routes,” he advised.
Setting expectations before the meeting
Our speakers diverged from the data discussion to share how setting expectations can help you have a more productive meeting. While it may be tempting to surprise your customer with an expansion conversation to win them over with your arguments in the moment, Schlingmeier warned that this may result in wasted time. “Everything around that is just beating around the bush and probably doesn’t get very far,” he said.
Instead, he advised giving your customers advance notice before the meeting. “Use the time before the meeting to gather arguments and thoughts,” he said. “Essentially, ask them what it takes for them to give you more of their business, so everyone comes prepared.”
Bass offered other ideas for ways to prepare, such as researching the customer’s business. “Going into these conversations with an idea of potential routes and volumes up for grabs, and considering what strategically serves your business and what the customer is looking for in terms of their plans and business growth, is crucial,” he said.
According to our panelists, one of the tricks to leading successful expansion conversations is focusing on the right accounts from the start. Bass warned against a common pitfall that many forwarders fall into. “While it might seem like larger customers would have more to give, they can be conscious of concentration risk, meaning they may never give any more business to a single freight forwarder than they currently do,” he said.
Instead of making assumptions, Bass suggested asking questions to learn more about your shippers’ preferences and business plans. After all, if a customer isn’t interested in putting more volume in one place, that’s a nonstarter, no matter how much they like you. “Identify which customers are looking to actively grow with a freight forwarder and want to increase their wallet share with a single provider,” Bass said. “Understanding this can make it easier to drive the conversation beyond price and focus on building a strong partnership and relationship.”
Schlingmeier offered another idea for forwarders looking for good candidates for expansion. In a relationship-driven business like freight forwarding, you can’t discount the importance of a strong partnership. “Consider which customers are enjoyable to work with,” he said. “If it’s fun for you to work with them, there’s a good chance it’s also fun for them to work with you.”
After a turbulent couple of years in the container market, Schlingmeier shared his thoughts on the state of the industry. He briefly reviewed how COVID disrupted the typical rise and fall of supply and demand, leading to skyrocketing container prices and freight rates.
Now, we see excess capacity continuing to bring down prices in the industry. “There’s no reason for rates to quickly go back to COVID levels,” Schlingmeier said. He listed three factors that he predicts will keep rates under pressure in the next couple of years:
Schlingmeier said that adopting digital solutions is crucial to navigating the current container booking landscape. Especially in today’s market, you’re likely to encounter many unexpected challenges after winning business. Therefore, automating tasks like gate messages, invoice checking, payments, and detention reminders can free up time for finding solutions to problems that arise.
Bass agreed with this, adding a story from his own experience. “I’ve spent as much time going back and forth with various parties, letting them know we were fixing the problem, rather than actually fixing the problem,” he said. “For the shipper, communication is essential; they just want to be informed about what’s happening, good or bad. If shippers can access this information themselves, operational personnel can focus on fixing and resolving the problem, providing solutions.”
Dr. Johannes Schlingmeier is a supply chain technology leader who started his logistics career 15 years ago at EUROGATE Group. He founded Container xChange in July 2017 with his cofounder and then-BCG colleague, Christian Roeloffs. Five years later, the platform is now powered by a team of over 300 streamlining container operations for 1500+ members.
Jon is an experienced business development leader in the Freight Tech space with an extensive career of well over a decade in the traditional freight forwarding industry. Jon has worked for some of the world’s largest multinationals including K+N and Agility. In 2019, Jon moved into the world of freight technology by joining Freight Saas startup Beacon as their 6th employee. He was responsible for leading their sales team from their seed round through to their $50m Series B fundraising. During this time, he saw the business grow to over 200 people. In October of 2022, Jon joined Logixboard as the EMEA Regional Manager for Business Development. In this position, he continues to combine his passion for the traditional freight industry and the emerging technology that is helping to drive innovation in the space.