of the JULY 2011 independent No.001 to a multinational by default, as it was a name they recognised and felt secure dealing with. He added however, that the emergence of strong and creditable independent freight forwarder networks had added a new dimension and that the increased customer care they offered, combined with unique solutions to meet their needs and local expertise on the ground, was generating many new opportunities for independent freight forwarders. The shift in approach by global corporations is illustrated by General Dynamics, one of the world’s top 500 companies with massive logistical requirements. At the 2nd African Regional Freight Forwarder Conference in Nairobi in late June, the company sent a delegation to seek out independent freight forwarders for a 54-country multi-million dollar contract. The delegation was specifically tasked with identifying the best independent agents to fulfil the contract with instructions that multinationals were excluded. Continued on page 3 SERVING THE INDEPENDENT FREIGHT FORWARDING COMMUNITY Global corporations reach out to independent agents Independent forwarders have seen a major increase in contracts to meet the shipping needs of major global companies. But what has driven these companies to increasingly turn to the independent sector and what benefits have they gained? In the good times prior to the financial crisis beginning in 2007, global corporations entered complex strategic partnership agreements with many multinational freight forwarders to fulfil their logistic requirements. The fancy end-to-end supply chain solutions the big logistic companies peddled, looked good in the boardroom and created the mantra for many shipping managers “no-one ever got sacked for using FedEx”. But underneath the branding, expensive marketing and impressive portfolios, the multinationals kept hidden their ‘dirty secret’ – that in many parts of the world the work was actually being done by independent forwarders in their name. When the financial crisis struck, many of the multinationals again declared that the independent sector would suffer, as they had neither the resilience nor the financial back-up to survive the downturn and many shippers would turn to the multinationals thanks to their ability to save a cent here or there in freight rates. Multinationals can provide service at the main hub gateways but elsewhere use a range of local agents acting on their behalf. A local agent could be working for DHL one day, UPS the next and its own business the day after. They would have no say in the formulation of the best solution, no contact with the client, while the multinational company portrayed the impression they are hands on at the location, when in reality its staff are managing the programme from regional HQ. D W Morgan, an independent supply chain logistics specialist, based in San Francisco, typifies the breed of entrepreneurial and customer-focussed independent company that has successfully won many tenders from multinational freight forwarders. Grant Opperman, President and Chief Strategy Officer for the company explains how the independent sector can continue to provide global shippers with a new and costeffective approach to their logistic needs. “Changing the logistic mindset of major global shippers is not always easy, but once the door is open, they rapidly understand the benefits of using dedicated independent agents that really care for their business. “For example a Fortune 100 giant corporation was tendering for its business and originally we were not allowed to compete. They went straight to their strategic multinational partner, who worked on it for six months. However, internal disagreements between their sales and operations departments, the inflexibility of a large fixed infrastructure company to act outside their parameters and the inability to find new innovative solutions, left the shipper frustrated and disillusioned. “The executive team were so fed up they turned to us. We drew up a solution over a weekend and had the full programme, not just test shipments, up and running in six weeks. This was a major global contract and required fresh thinking to produce a tailor-made solution. The reason we won the contract is that we were more flexible and did not try and fit them into a prepackaged programme. Two years later we still have the complete endto-end supply chain contract and have added value at every stage. The corporation ran an assessment concluding that the savings they had made ran into tens of millions of dollars.” The European Shipper’s Council recognises that the situation has changed. A spokesperson told Voice of the Independent that many shippers large and small would go 3 Clampdown in the US The US congress targets rogue brokers and agents 4 View from the shipper The need for shippers to understand the supply chain 5 Insurance pitfalls How insurance claims can become a minefield 8 Focus on Project Cargo An analysis of the current global project cargo market VOTI 1 FINAL.indd 1 18/07/2011 15:19