The transportation industry is well known for actual prices exceeding the original quotes. Deviations from the planned schedule or the initial transport solution can cost transport buyers dearly. Additional costs are passed along to the customer with no care – often with an unjustified and unreasonable profit margin for the transport seller. Learn how to avoid the frustrations and the additional costs, and how the industry as a whole is slowly changing direction.
When I go to a restaurant, and we have decided on a menu, then I know the price and have an expectation of what we will be served and the experience that comes with it. If we decide on slightly more expensive wine and order a dessert, then we know which effect this will have on the bill. As the food arrives, I can look the waiter – and sometimes even the cook – in the eyes and express my enthusiasm or disappointment, which will immediately require a reaction. This sequence of events is part of the delivery of the specific product – the food. But the product, in this case, is much more than the food itself, as also the service, the surroundings and the personal interaction creates the entire experience.
In the field of transportation, things go about a little differently. A similarity is that the transport starts with a specific need that can be solved with a product – in this case, a transport service. In the same way, as in a restaurant you are now introduced to a whole pallet of different transport services, and you often have to choose a product based on prices, quality of services, maybe specified by transit times, mode of transportation or even features like tracking and communication. The transport buyer can also choose extra services from the ‘menu’ such as insurance, customs clearance, pick-up and delivery. As you reach a decision, you have established an expectation for the service you have booked and for what the price will be.
When everything is agreed upon, and the transport process has started, then we notice the difference between going to a restaurant and ordering a transport service – and in this case the transport industry has a lot to learn from the restaurant business.
If the chef runs out of ingredients for a specific dish on the menu, then the waiter will inform you that the restaurant regrettably cannot accommodate your desired choice, and will ask you to have another look and maybe select a different dish from the menu. If I choose to do so, I immediately adjust my expectations to both the product and the price.
Many unforeseen incidents occur within the shipping world. Often there are elements in the transport solution that the freight forwarder cannot or will not handle in the manner initially intended when you ordered the shipment. Then you will often experience that your ‘main course’ is never served. Alternatively, the missing element may be replaced by a different one without you knowing until you receive the final invoice stating that the price is higher than expected.
For example, customs clearance might have required a specific document, which your freight forwarder did not think of when you booked the transport, and therefore he has now added the cost of producing that document. Or that the forwarder on his initiative decided to pack your shipment on pallets, thus increasing the total volume of your goods and making the price increase accordingly.
What is ironic is that forwarders justify these additional costs by stating that it is out of their control – even though it is often their subcontractor who gets the profit. Moreover, we never come across a case where a price has gone down – concluding that the price changes are purely one-sided.
If you are at a restaurant and there is an issue with your food or wine, you figure this out straight away and can either ask for a new order or not pay for it. That makes all the difference compared to the shipping business, where you usually do not know if anything happens that differs from what you initially agreed. Another fact is that you often do not have a relation to the people who handle your products, as they are subcontractors usually one or more links from the forwarder. And not least, when introduced to your bill for the service you apparently have received, you have no way of declining the extra costs, as payment is due before the forwarder will deliver your goods.