looking always for the … lowest?

quoting a PROJECT CARGO transport is sometimes difficult and price can vary as many variable can be involved:

– the first important point to know is the PERIOD OF SHIPMENT: if cargo is ready we can look for an available sailing and get a “special” rate (something like a “last minute” price!) but if the readiness is expected much later, it’s hard to know which vessels, which chances, which solutions will be available at that far future time! For example: for one shipment, we got a freight rate from a shipping line for 15.000 dollars, but subject to a “minimum” inducement of 150.000 dollars. Meaning that if at time of readiness they have OTHER cargo for the same destination, they can accept to ship the cargo against payment of the 15.000 dollars seafreight. But if they have no other cargo, they will accept to ship the cargo only against payment of 150.000 dollars … meaning ten times more! How can we GRANT to our client a seafreight rate NOW?

– then we have to look for LINER regular services, knowing that a TRAMP vessel can be made available at a totally different price. LINER is normally more expensive then TRAMP, but LINER is anyway granting hook/hook (liner) terms, while TRAMP is quoting on FIOS terms, so that a diffference (sometimes an important difference) can be involved. Not to forget that a LINER freight is kept valid for a longer period, while a TRAMP offer can be valid for a few “hours” only, thence needing a very urgent and immediate decision to be intaken. I have been facing problems when I quoted a certain freight for a specific vessel ready to load but asking for reply within 24 hours. Then maybe after two weeks, the client went back to me requesting to keeping THAT freight rate valid, when the market was … demanding double then that!

– most of the times clients keep your offer valid if the market rates are increasing (“you quoted me 50.000 so that NOW you have to stick to 50.000 …” are they complaining!) while they ask for reduction is the market rates are decreasing (“it is true that you quoted me 50.000, but now the market is offering 35.000, so that you have to adjust your quote to the market situation …” is their assumption!)

It is thence important when quoting to state the validity of the price: “my quote is valid until … (one month from now?)” but adding: “for acceptance of the price within …. (one week from now?).”

It’s like to say: “I engage myself to handle your transport at that fixed price even if you will be ready with the cargo much later on, but YOU engage yourself “now” to entrust me for the transport”.

This is a double warranty: the client is safe as he knows that he will pay that FIXED price with no surprise. We are safe, as we know that we will handle that transport for sure at that “fixed” price, not having to start a bargaining operation at the last moment. And, most important, we can be working more seriously on all the relevant issues like road permits, documentation, contacts with owners, pre-bookings … and so on.

Suggestion: don’t look just for the lowest price! Engage yourself with the most professional and experienced people!

And be ready to pay the right price …!

Paolo Federici

(today celebrating 40 years in the freight forwarding business)


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Archiviato in cultura, economia, giornalismo, Idee, riflessioni, Trasporti

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