The role of logistics networks in the forwarding industry

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If you are planning to start a business in the cargo forwarding industry, then you probably need to know some things about forwarding networks. Even these have been around for some time, they have expanded a lot in the past years, and most contractors are members of such an alliance. Due to them, the industry has managed to grow considerably, which is a positive situation, especially if you think about the current international economic context. Trade routes are becoming more and more competitive, which means that the power of an independent shipper is likely to decrease. In order to avoid this, you should create strong strategies, and one of this is joining a forwarding alliance. Whether we are speaking about water or air freight forwarders, it is very important to acknowledge the relevance of official networks, because these can help them stay connected with almost any subsidiary in the world. Here are some added value points these entities may bring to your activity, as a forwarder:

They have a structural importance

The entire international transportation and forwarding industry is organized as a network. In this context it is clear than an independent company will never be able to get a contract over a huge multinational. In any network, the entities involved (here, the forwarding companies) are rather interdependent than independent, so they need to be organized in a specialized structure. This way, each member of a network develops their activity in accordance to the others, respecting them and making sure they do not interfere with each other. In addition to this, all the members have the same rights and need to obey the same rules, because each alliance has its own regulations.

 

Forwarding alliances offer market positioning

As mentioned above, in a field dominated by huge multinationals, individual companies that have a local activity find it difficult to get convenient contracts. They lack a great reputation, market awareness and a strong brand, so few potential partners will dare to close deals with them. For this reason, they are often obliged to join a forwarding network. These alliances have members in hundreds of countries all over the world, so they can guarantee a high standard of quality, as well as a global brand. All the forwarding members are working under the same umbrella, thus getting more visibility and trustworthiness.

The networks offer stability

Each cargo forwarding alliance has its worn rules and regulations, and maybe the most important one is the mutual support members have to offer each other. This is one of the reasons why the networks in the logistics industry are considered more stable than independent forwarders. However, they cannot be thought of as static institutions, since they offer all their members the flexibility they need, even if their activity is interconnected and interdependent. The stability is due to the fact that each process is regulated by a set of rules; each member knows its role, as well as the rights and obligations.

June 2017
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