The line between what one kind of logistics company does and any other is more blurred than ever. Take the term 3PL – this is used by freight forwarders, carriers, and even warehouses as a way to describe themselves. None are wrong be each largely do very different things. This shows that logistics companies have expanded their capabilities to provide a whole range of services to clients when in the past they were narrowly focused on just one.
This makes sense because, as the supply chains of companies become more global and diverse, they need logistics partners who can better align with their needs. This has increased competition in the marketplace, and none more so than that for freight forwarders. Even Amazon.com is taking steps to enter the logistics market – a clear sign that any boundaries about what a freight forwarder can or should do are gone.
There are still best in class freight forwarders that lead the marketplace however, and there is a lot to be learned from them by smaller forwarders looking to grow their own market share.
Here’s the Top 25 Freight Forwarders as ranked by Armstrong & Associates. The exact list isn’t important, there are plenty of “top” lists for all things logistics – but what is important is what the majority of these companies are doing to be among the best. Here are 3 things:
These companies understand the importance of process automation and technology in their operation. Logistics is an industry often criticized for being behind the times with how it fails to use technology enough. This is not a fair criticism of most companies on this list – most are on the leading edge of logistics technology. Many are on the bleeding edge compared to any company in any industry.
They also recognize the value of technology as not just a way to eliminate manual processes, but also a key decision support tool for complex decisions that have too many inputs for just one person to make (like route optimization or freight rate calculations).
Many of these companies are asset based, meaning they operate their own trucks and boats, but also leverage the value other partnerships can provide. Doing so allows them to offer them more flexible solutions (where they are acting as a 3PL) through partners which includes better rates and service options for their customers. In logistics, scale leads to better rates, and these companies are good at combining volume to build it.
Marketing and Sales
Branding and the marketplace’s perception of these companies is something they also invest in. Each has a clear vision of what types of businesses are the best for them. In other words, they are not trying to be everything to everyone – which is a common mistake for small and medium sized logistics companies. When you project a clear vision on what your company “is”, the best customers for you will seek you out.
The top freight forwarding companies don’t become that way by accident. They do it by investing in the areas they understand will give them a competitive advantage and provide the best return on their customers’ experience – like technology that makes them more efficient and marketing that attract the ideal customers.