In my last post we started to take a look and answer if International Transportation is ready for disruption. Disruption means “Different and better”. Could traditional freight forwarding be ready to change, come to an end as we have known it?
To get to the answer we needed to consider:
1. What can the current state of technology and technology proliferation achieve?
2. How does a customer in this space decide and purchase services?
3. What barriers might exist and are they real?
The conclusion in looking at the first question is the state of technology and technology proliferation will enable disruption. If you are just starting you can read my last post International Transportation Disruption.
Let’s take a look at the second question.
How does a customer in this space decide and purchase services?
I have a product. I have someone that makes that product for me to sell and they are in Vietnam. They will get it to the port and are happy to do that for me. Now what?
There are more than a few different ways that the need to purchasing international transportation services arise. The point is, it will be something your company will need to deal with. If you are a small to medium sized business…. It will be something you personally need to deal with!
Remember the yellow pages? Every listing started with “ACME Logistics” “Ace Shipping” “At-A-Boy Delivery”, we never made it past the first few pages before we were inundated with too many large side ads. I always have this vision of a guy standing next to a delivery truck telling me he will be on time? “A-Best-Delivery-Company”. You have to be in the yellow pages how else will someone find your business?
When you need to purchase a cleaning service for your business where do you go? Do you search the internet? How do you keep up with what is changing or what new opportunities are available in the market?
How do you find an international shipping company? Who do you call, “Freight Busters”? Believe it or not, you can call them as there are many businesses listed under “Freight Busters”.
The fact is in the age of choice somethings are getting easier. Some are getting harder.
The Pitch – I Have What You Need (You just don’t know it)
How many sales and marketing technologies have been created today? How many introductory emails do you get? Is the email campaign your friend or routed to the spam folder?
How many emails do you want to delete each day?
What about those sales people? I used to be one and still am. How often do customers use or have you heard the first line, “I’m happy with my current provider, no need to talk.” Of if you are a small to medium sized business do you even see sales people? I suspect not very often.
If you are a service provider can you afford to send sales people to a small to medium sized customer?
If you are a small to medium sized business how many sales people can you see? Remember, there are more than 20,000 in this space, over 6000 Ocean Transportation Intermediaries in the US alone.
I have the best service! I am the best on this trade lane! We have the best pricing! Our tracking system is the best! You can ship on-line with us! We have the largest network! We own our own offices! How many attributes can you measure against? I have the highest value for the lowest price! I invented Ad words before they became Ad words!
How do you know and how do they know what you need? It is time neither customers or service providers seem to have.
How Does a Customer Decide?
I thought I would try my luck! I pulled up my favorite search engine and typed in: Who is the best freight forwarding company?
One of the examples is the answer provided by Quora, Quora provides the best answer to any question.
As you can see on the right; many more questions than answers.
Standardized isn’t really that Simple
How do companies put out bids today? If it is a small company bidding out 100 TEUs how much time would your provider spend to reply? Probably wouldn’t make it to the top of the pricing departments list of a major forwarder.
It is great that for Ocean you can get a quote on a 20 foot high cube container. That fact that there has been some standardization in the industry for air, ocean, and road transport has made lives a bit better.
But what about the variations that still exist. Is it a drayage charge or a pickup charge? What does a port fee cover? Is the container charge the only charge? Do you pricing additional charges on top of it? Is this Port-to-Port? What about inland? The fact is each provider’s standards are different in some way than the standards of the other. Break out the spreadsheet and your translation skills.
Choice is Hard Work
By the time a customer gets though this they are overwhelmed.
Let’s pose a few questions. Do you shop on Amazon? Do you look for service providers in your personal life on Angie’s List (or the most used service provider rating platform in your country). In the US, do you post work on Thumbtack (very cool service, take a look)? When looking for a part or manufacturer, have you used Alibaba? When you are looking for a place to eat, do you search restaurants in a web browser or do you go to Yelp? How do you find the best schedule and cheapest flight for your business travel? Do you go to each airline? Perhaps you call the travel agents office… if you haven’t noticed they are slowly disappearing… going with the yellow pages.
In the past month I have had the privilege of listening to customers give reviews on the services of some international freight forwarders. They are terrified of giving out email addresses. “You are not going to put me on some list, are you?” The anxiety in their voice tells all.
We Are More Willing to Share Our Experiences
No more emails, please no more phone calls (if you can reach someone and have the patience to wade through 3 to 4 minutes of IVR). Customers are defensive at the start of a phone call.
If you are a provider selling today is really hard. Customers want to make their own choices. You want to be more informed with more transparency.
What if we let the quality of an experience help us decide?
Each of us will leave a review on a restaurant we loved or hated. When purchasing a product on Amazon we will share our experiences. When we are thrilled with the service our plumber gave us we will give them to ratings on a review site. It is likely anyway we found all of these things on a market place or other service that provides transparency to what we are deciding to purchase.
Today we are more comfortable providing information about how we experience our services. Today it is possible to make your choices in one place if as a customer you force that change just like you can choose on Amazon which seller to purchase something from … and still get PRIME service. It is possible to have a marketplace for these services that will add value for the customer.
The answer to the second question is that the current state of how as a customer we would purchase and decide on international transportation services can be made easier. The mind set to share our experiences in a way that creates value instead of risk will define a better experience for selecting international transportation providers.
With the first answer being yes and the second question being answered with yes, are there any barriers that exist to disrupting the international transportation business of freight forwarders? Again keep in mind that disruption is not like the Port issues in LA and Long beach. Disruption here is defined as “Different and Better”.
Ron Berger - COO at Fleet