Shipping 101: Why Commercial Goods Need Reliable Shipping Partners
Aslam: “I have ordered shoes worth 300 kilograms on Alibaba. Tanveer, I need an update on my shipment. I have already paid for my goods sixty days ago!”
Tanveer (the shipping agent handling Aslam’s shipment): “What order? We have bigger shipments. Stop calling me every two hours for updates! I am super busy and I’ll let you know when your goods arrive!” *hangs up*
An all too common scenario in Bangladesh is the unreliability of shipping agents. They are responsible for booking freight space and clearing your commercial goods from customs officers when they arrive at ports for inspection and tax calculation.
Small consignments like Aslam’s get stuck at customs while shipping agents are busy clearing bigger consignments because they can earn more from those. Worse, people like Aslam may not end up with their goods altogether because they cannot track or account for their goods. Trying to get a refund from your shipping agent is a waste of resources. You may lose millions of dollars worth of shipment because of one gaping hole in your shipping pipeline: reliability.
Bangladesh is at the crossroads of breaking out into multiple manufacturing industries (electronics, leather, automobiles etc.). At scale, this means more exports abroad to meet growing global demand. It also means potentially more imports as growing local consumerism takes center. All this points to more business for the shipping industry. A significant increase in reliability is thus essential.
Reliable shipping comes from fulfilling client orders. The closer to 100% fulfillment, the more reliable the shipping partner. What Bangladesh lacks is a fulfillment of shipping orders. Lagging at 100th position in the World Bank’s Logistics Performance Index 2018, bottlenecks in order fulfillment hampers traders like Aslam in growing their business in Bangladesh. I have identified three factors for poor shipping order fulfillment in Bangladesh:
- Price fluctuations. Shipping charges are calculated both on weight and volume, depending on the quantity. Never has been a time more pronounced for price fluctuations than under the Covid-19 pandemic. Air freight and sea freight costs similar in some countries. Traditionally air freight was significantly more expensive than sea freight. Due to fighting over limited freight space and increased demand to move goods, prices remain unstable.
- Inability to consolidate goods: Small cargoes add up to less than container load (LCL) freight. It means the shipping agent needs to gather enough goods to fill up part of a container or whole cargo space. If he is unable to do so, he will be unable to take small orders. In Bangladesh, this problem becomes amplified because of point number 1. Clients are price sensitive due to being unaware of market rates.
- Lack of insight into customer and goods type: shipping agents diversify business in order to spread risk. Unfortunately, you just can’t ship makeup without bubble wraps in boxes and then talk about shipping machineries the same way. Data on industry, customer and goods type is the difference between repeat orders and customer turnover, and insights on those data is the key to shipping reliability in 2021.
The last point holds an important leverage over competition. When shipping becomes a coordinated journey to combine data sets into a service, most of the customers that are in need of goods being delivered experience an optimum delivery service. This leads to an increase in demand for reliable shipping partners, which technology like Logifreight can bridge. Our aim is to create that seamless meshing of data sets that can be used by shipping partners in order to provide a the optimum customer service. If you have goods that need shipped, connect with us here.