As a business owner, you're always looking for the best and most cost-effective ways to move your products from point A to point B. Choosing a shipping company isn't as easy as signing a contract with the first one that crosses your path. What should you look for in a shipping company, and what should you avoid to create a successful partnership?
Look at Registration and Licensing
You will need to ensure the shipping company is licensed and registered in the country where you operate. There are domestic and international companies, but regardless of their port of origin, they will need to be licensed in your nation as well. If you operate in the United States, for example, any company that you choose to work with should be able to give you their NVOCC number that is registered with the Federal Maritime Commission.
International companies are primarily associated with ASMA, FDI or RIM — all of which are equally qualified organizations with good reputations and superb customer service.
Check for Insurance
Regardless of how much or how little you're shipping, you should insure your property to protect yourself if something is lost or damaged in transit. There are usually two options here. Either you will be responsible for insuring each shipment, or the shipping company will offer coverage, incorporating those costs into the overall price of shipping.
Either way, make sure you have an insurance policy that will protect your products during transport. One bad storm or unsealed container could cost you thousands of dollars otherwise, even if it's something you had no control over.
Determine Your Average Order Size
Next, take a look at your average order size. This will determine the kind of shipping company you want to contract with. If you're only ordering small amounts or ordering infrequently, entering into an expensive contract with a shipper might not be the most cost-effective option.
This is one variable to keep in mind when you're shopping around. Being aware of your average order size can give you the tools to negotiate a contract that will work best for you.
Consider Tracking Tools
While consumers might enjoy tracking their individual orders as they make the journey from the warehouse into their waiting hands, these tracking tools are also vital when you're looking for a shipping company. If they don't offer tracking tools, it might be a sign you need to choose a different company. Tracking tools are essential, especially if you're waiting for supplies or components necessary to keep your business moving forward. Find a company that offers real-time tracking so you can see updates as frequent as every 10 seconds.
Check into tracking tools to ensure they're available, user-friendly and meet your company's needs.
Review Safety Records
You should always look for a shipping company that maintains a clean safety record. Not only does this ensure your shipments won't be delayed by accidents or injuries on the job — in most cases — but it also means you're dealing with a company that is going to take just as much care with your cargo as they do with their employees. If you're shipping by land, the Federal Motor Carrier Safety Administration allows you to request a company's safety record report.
For sea-based cargo companies, you may be able to request safety reports from the Federal Maritime Commission or its counterpart in whatever country the company operates in. You may also be able to obtain these reports by approaching the company directly. Those with nothing to hide will happily share their safety reports, while those with a less-than-stellar safety record will try to discourage you from seeking them. They may also refuse to turn them over entirely. Avoid those companies in favor of those with a positive safety record.
Negotiate for Discounts
One of the biggest parts of choosing a shipping company is the negotiation phase. You don't have to accept the contract as it's first laid out, especially if there are clauses you don't agree with or would negatively impact your company. Have a skilled contract lawyer in your corner and go into your meeting prepared to negotiate for the kind of contract that will benefit both you and the shipping company.
This can even include negotiating for discounts for things like high-volume orders, especially if they coincide with your busy seasons. You'll still be paying for each shipment, but you may be able to negotiate the price down to help you save money while you're building a strong business relationship with your shipper.
Choosing the Right Shipping Company Makes All the Difference
Choosing a shipping company for your business isn't something that should be taken lightly. There are several variables to consider, from your budget to the company's country of origin and even the frequency and weight of your shipments. Don't sign a contract with the first shipper that crosses your path, and don't sign anything without the assistance of a skilled contract lawyer. That's doesn't just apply to negotiations with a shipping company — that should be your rule of thumb for any contract negotiations.
If you're mindful and aware of all the variables that go into choosing a shipper, you may only have to go through this process once while you're in business. Protect yourself and your investment and be smart about the companies you choose to associate yourself with. If you select the right shipper, you can look forward to a long and successful partnership,
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