Almost everything we use or consume nowadays passes through the freight network. Transporting goods from all corners of the world is at the core of modern society. That’s why freight forwarding is such a big business and one of the keystones of the global economy.
Companies of all sizes need freight forwarder services. UK-based businesses already have their pick of forwarders, but there’s always demand for more competition.
If you’re thinking about building a freight forwarding business from the ground up, you should know what challenges await you. In this article, we’ll let you know exactly what to expect.
What Do Freight Forwarders Do?
While anyone can start a freight forwarding business, not everyone will be successful. It might sound harsh, but that rule applies to most types of businesses.
The first step in the process is to understand what a freight forwarding company does. In a nutshell, freight forwarding means arranging cargo shipments on behalf of clients.
These companies provide a wide range of supply chain services such as various freight transportation, documentation, warehousing, consolidation, cargo insurance, and customs compliance.
However, forwarders don’t actually move the cargo – they’re intermediaries. A forwarder handles complex tasks of logistics for international shipping and negotiates the lowest prices for shipments.
If freight forwarding sounds like a career you’d love to pursue, it’s essential to have clear expectations to make the path easier.
Estimating the Start-Up Costs
Naturally, the financial aspect of starting a freight forwarding business comes to mind first. The good news is that the start-up costs are relatively low.
You don’t require warehouses or need a big office if it’s just you. A decent computer and a strong internet connection will suffice.
But you will need to purchase specialised software to help manage cargo deliveries and other tasks. Also, you will have to establish your fee and see how it fits into your budget.
From the outset, you must clearly define your freight forwarder services. UK-based clients should know what they can expect from you and how much you will charge them.
Analysing the Industry
Researching the competition is one of the quickest ways to get the right idea for starting any business. With freight forwarding, you’ll need to examine the global market and understand how it works.
What makes some forwarders successful, and why do others fail? Finding the right answers to these questions will potentially lead to fewer mistakes at the beginning. If you’re in a position to get an experienced mentor to guide you, that can be immensely valuable.
Planning and Strategizing
So much of freight forwarding is pre-planning, planning, and strategizing. These actions don’t appeal to everyone, but they are absolutely vital for the freight forwarding business.
Creating a business plan is incredibly important. Write a specific mission statement and perform an analysis of all your strengths and weaknesses.
Your long-term goals should also be a part of your business plan. Developing a specific strategy for reaching your goals will keep you pushing forwards when you run into inevitable obstacles.
Joining a Freight Alliance
Building any business is challenging, especially if you do it by yourself. Even the most independent entrepreneurs need support from time to time. In the freight forwarding business, establishing alliances goes a long way.
For example, you can become a member of Digital Freight Alliance, a global organisation that connects freight forwarders and helps them grow their businesses. It has thousands of members and operates in nearly 200 countries.
Promoting Your Business
Even in the freight forwarding business, marketing is vital. As a beginner, you might not have the budget for extensive campaigns, but you can still do a lot.
You can build a list of local manufacturers and companies in need of shipping services and reach out to them directly. Reputation is everything for freight forwarders, so your marketing efforts should never exceed the services you have to offer.
Is Freight Forwarding Right for You?
While rewarding, the freight forwarding business is not for the faint of heart. Shipping delays are inevitable, roadblocks will happen, and the pressure will be intense most of the time.
Even if you do everything perfectly, there are lots of moving parts in the supply chain, and you need to be prepared for every eventuality. However, it can also be exciting and profitable venture, well worth the effort required.
If you need an experienced and highly professional freight forwarding company, contact GenX Freight and tell us about what kind of service you’re seeking.