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Why it is Vital to Use a Specialized Freight Forwarder When Shipping Cargo Overseas

  • By LAC Blog
  • Tuesday 27, September 2016

Knowing the region: Four reasons why it is vital to use a specialized freight forwarder

Is it better to know a little about a lot or a lot about a little?

When specific knowledge for a specific task is required, then knowing a great deal about a little is extremely important.

When selecting a company to take responsibility for pivotal aspects of your business, it pays to put trust in people who have narrowed the scope of their focus and specialized in the area that is specifically appropriate to you.

This is especially true in an industry like freight forwarding, which involves precise knowledge in the logistics of individual regions; laws, customs, trends, political situations, etc.

The following are four key reasons why it is vital to go with a specialized freight forwarder when conducting business in foreign markets.

1.They are aware of the variance of lawsand regulations of a region

Laws and regulations vary greatly between individual countries and regions, and are susceptible to frequent changes. Consistent focus on a region allows for a greater awareness of the variance in legislation, preventing costly mistakes.

Latin America is known to have very strict laws which may vary depending on the country you are doing business with. Certain countries in Latin America are stricter when it comes to laws and regulations.

It’s much easier to be up to date with these changing variables and regulations when focusing on a smaller concentration of regions.

2.They have a broader and stronger network throughout regions they specialize in

Even with the most efficient preparation, many unforeseen circumstances can occur during the shipping process that can cause havoc on a business transaction. So, it’s extremely important to have good relationships with agents in the region of activity that can offer solutions and help in the process of troubleshooting when something goes awry.

As an example, in the case ofreceiving agentswho dealwith steamship lineswhen cargo arrives to destination ports,having a strong relationship and consistent correspondencewill facilitate communication andproblem solving in the event of a mishap.

Another benefit is the ability to offer better rates in specific regions. The high volume of business in regions allows specialized freight forwarders to negotiate more competitiverates with the carriers that will ultimately benefit the clients’ bottom line.

3.They are aware of the political and economic challenges of a region

Unfamiliarity with a specific region may result in generalizations and assumptions that could become problematic for business, especially when it comes to regions with more volatile political, economic or labor related issues.

For example, in Mexico, the trucking industry lacks the strong infrastructure of that of the United States. Vehicles are on average significantly older (173,000 commercial vehicles in Mexico are older than 21 years old)[1] and there concerns about safety conditions on the roads, as well as the training of drivers.

A familiaritywith these types of issues and constraints can only be attained through consistent involvement in the specific regions.

 

4.They speak the language

Being able to communicate in the mother tongue of a region is, obviously, extremely important. Even more important is speaking it with a deep understandingof the customs/culture of the people you’re talking to.  It is vital in building strongbusiness relationships.

For example, in many Latin countries, there is a more relaxed emphasis on punctuality. It is quite common for meetings and obligations to begin after the specified time (ex: 15-30 minutes).[2]

In Mexico, negotiations are more drawn out and lengthy because of a need to build a personal connection and trust between those who will be doing business. It is standard to expect an extended period of casual conversation before engaging in any business discussions when meeting with someone or speaking over the phone. [3]

Cultural differences are not to be taken lightly, as you run the risk of being off-putting and alienating a key strategic partner.

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