I would like to continue the topic about the small sized forwarders. We all agree that the SME forwarders are more flexible than the bigger forwarding companies however they lack the resources and the buying power of the bigger forwarders. But is this the real case.
Should the SSF maintain a warehouse?
Should the SSF pay huge ammont for CRM and Order processing systems ?
Should the SSF pay huge software license fees for Microsoft products?
Should the SSF maintain huge employees department in order to have dedicated employees for various activities – like customs brokerage, inland deliveries, airfreight operations etc. ?
NO, NO and NO !!!
Believe it or not but a clever designing and planning of operations can compensate for the lack of various resources.
Here you are several advises and examples:
I am sure that all of you know what is the price to establish and maintain warehouse operations. In Bulgaria for example if you want to establish and maintain the smallest bonded warehouse – for example to handle your inbound airfreight traffic you need to plan at least 60 000 eur annually – this is the smallest ammount. And it is a fixed cost. That means that whether you have traffic or not you are to plan these funds. But here comes the trick with the transformation of the fixed costs to variable cost. How, very easy – outsource this activity to a company which operates such a warehouse and which is relatively neutral. Doing so you will pay only on a per shipment basis which makes you very flexible and competitive.
Customs brokerage department
In order to maintain a steady and smooth customs brokerage for your customers you would need to hire at least two customs brokers who know very well the procedures and daily follow the changes in this dynamic matter. I leave to you to calculate how much this costs – for salaries, social and medical insurances, training, hardware and software and other equipment. And you never know how long these employees will work for you.
If you sub-contract this specialized activity to several highly seasoned customs brokers you can easily transfer their professional experience into processing of your customers orders. Again on per shipment cost but not per employee cost. And the quality of your service will increase. If you monitor and control the process of course.
You can apply the above approach even to the level that you have a special company to handle your exports – physically at the airport.
Software and hardware
CRM, OMS, ERP etc. all these abbreviations bring the accossiation with payment of high license fees. Yes, correct … but only if you are MS dependend.
My advise – avoid Microsoft products as much as you can. This will save you huge money. Let me give you some examples:
Choice of Operation system – Ubuntu vs Windows –
after I get aquainted to the Ubuntu Linux distribution I should admit that Windows is no more.
Ubuntu is much lighter operatinal system than any MS operational systems (any of MS crap).
Ubuntuworks perfectly even on older hardware (especially on older hardware).
Ubuntu is very stable.
Ubuntu is far more secure than the MS expensive dirt.
Ubuntu is FREE. You pay zero for licenses. The only funds you would eventually pay are for the installation and training and this is only if you are not able to do it by yourself.
And Ubuntu comes fully equiped with the last Open Office distribution which I preffer to the heavier and more expensive MS Office. For e-mail client you have a very wide choice but I recomend you choose between Evolution and Thunderbird.
CRM (Customer Relations Management)
There are many CRM solutions on the market but I will recomend you ZOHO CRM.
This CRM system has very good free version which in many of the cases will do a perfect job for your busines and will automize and streamline your marketing and sales processes. And if you operations are not very sophisticated even your operational processes. Though it has been made mostly for the computer services industry, it can be easily accustomed to your needs in freight forwarding. I am using it and I ready to assist any of you in implementing it in your daily job.
I hope the advises here will work well for you and your business. And I want you to never forget one thing:
Forwarder is a Designer. Never stop to be one !!
Your comments, sharing and recommendations as well as critics are more than welcome !!!
For more information on KG CARGO freight forwarding service please contact us.