A day in life of a sales manager of freight forwarding

Content –

1. Who is a freight forwarder
2. A day in life of a sales manager of freight forwarding
   • Sales call
   • Important points followed by a good sales person in daily life
   • Challenges
     • Challenges faced by the Sales person
     • Challenges faced by the industry/freight forwarding company
3. Learning for a new sales person in freight forwarding
4. Pros and Cons of this profile
5. Skills to be competitive
6. How to make this segment more profitable
7. Future of freight forwarding

1. Who is a freight forwarder

Freight forwarder is a person / organization who arranges and co-ordinate the movement of cargo of an exporter/importer from origin to destination by liaising with shipping line / airline. This might also involve other logistics services like CHA, transportation, stuffing etc.

He might be acting either as an agent (principal) of a shipping line or an agent of his customer or both in a single transaction.

An exporter might have an expertise in manufacturing/trading while freight forwarders have expertise in shipping and this creates their need.

Freight forwarding is an interesting job and starts from taking booking order from customer / booking space on vessel or airline / customs clearance / road movement / coordinating with shipping lines Etc.

2. A day in life of a sales manager of freight forwarding

The normal day of a sales manager of freight forwarding would start getting an early call from his client to resolve some or the other issue for his shipment. Although the shipments are handled by operations team but the face of a forwarding company is the sales person, thus he becomes the first point of contact.

His daily routine includes – Internal team meeting, making cold calls/ customer visit on regular basis to understand their requirement and issues faced. He also needs to plan his future sales for both short term and long term.

1. Sales call –

1. Cold calls

(Cold call is a sales call made to someone who hasn’t previously shown interest in the business). He makes lot of cold calls facing lots of rejections but only by this way he starts building his customer funnel, which can be as below or can vary depending on situation.

• 2 out of 10 cold calls gives a reply or query
• 3 out of 10 query is a business that is converted in a good market.
• So the conversation ratio is 3% to 30% or higher/lower depending on the market and situation.

b. Face to Face calls

Apart from cold calls its important to make face to face calls on regular basis. By meeting customers directly gives a good chance to let customers open up, make a healthy discussion, tell their requirements, future plans, challenges, importantly it also gives a chance to understand about competitors. A sales person with a good base of customers can easily close the deals within first half of the month to meet his target.

II. Below are important points followed by a good sales person in daily life: –

1. Find a way out to know the challenges faced by customer, normally customers take time to open up with a sales person. Knowing their requirement is very important in order to plan and give a good service, secure the business, trade off the service at the time of rate negotiation.
2. Securing present customer base is more important than following up to build new customers.
3. Never loose good customers.
4. Be regular in creating sales pipeline. (Sales pipeline is the future deals and business that has been secured).
5. Ability to arrange a last-minute gate in or cut of extension at port or flight.
6. Have market information to be ahead of competitors.
7. Knows the potential of customer and had good understanding of Market.

Its tough to start a freight forwarding business in ocean as it can take a lot of funds due to soaring freight, but for air it takes lot less amount of fund and the monetary rotation is very quick due to the less time taken for air movements. Also the risk involved in air is higher. Still to start a freight forwarding business, a good investment is needed.

In the beginning it takes lot of efforts to understand the market.

It’s a very hectic job but can be really fruitful when the hard work starts paying off. Mostly the sales incentive is directly linked to the profit brought in by the sales person. Most of the GFFs Global Freight Forwarders pay good incentive to their sales team.

III. Challenges

a. Challenges faced by the Sales person: –

• Meet high sales-target set by management.
• Low profit margins. (In order to be competitive he has to reduce the profit margin to close a deal which is in contrast of the high profit margin set by company).
• Get a competitive rate to close the deals. Most shipping lines and airlines don’t do not entertain negotiation at times of competitive market.
• Unpredictability to confirm a business even after getting a rate as many other parameters are required to be met, to close a deal on day today business.
• Unable to meet a last-minute requirement by customer.
• Getting more involved in day today operations and unable to give more times to his core activities for sales. Being face of company to the customer he is getting the first call for all issues in cases where the operations team is not pro-active, this kills a lot his productive time.
• Competitors targeting their business accounts.

b. Challenges faced by the industry/freight forwarding company: –

• Market can be very fluctuating.
• It’s a dynamic market were the rates / space on vessel / vessel availability / containers availability – can be unpredictable sometimes.
• The lack of partners and customer management is a challenge faced by freight forwarder sales team. Due to the fragmentation and inconsistency of the many parties involved in the process, it’s difficult to have all service consolidated in one place.
• In times of competitive market, light asset base freight forwarding companies can be fragile to shut down while a strong asset base company can survive.

3. Learning for new sales persons in freight forwarding

1. Look for untouched market – For Example most of sales team target the best locations with largest opportunities like Houston – while small locations in Nebraska is missed. The same difference can be seen in Mumbai, which is big market and Mandideep which is small market but less competitive. These small locations can easily give 20% of sales target share on regular basis. Should also target the areas that are far from ports and cities.
2. The customer ratio will mostly follow the pareto rule and 20% of customers will give the share for 80% volume.
3. Even if one meets the target for the present month, he should keep on following up and building the pipeline for coming months as this is a fluctuating market.
   • No result – keep building pipeline
   • Poor result – keep building pipeline
   • Great result – keep building pipeline
4. Try to learn as much as possible at ground level is very important and can be earned only by being part of activities – be at warehouse during loading / unloading / stuffing, understand CHA activities, shipping line / airline operations and process, learn the pricing and quoting very minutely, it will help in future.
5. Don’t give a commitment to customers which you cannot fulfil, you should always be true to your customers to gain their long-term trust. An under- commitment is acceptable but an overcommitment which cannot be fulfilled later is not acceptable in this industry.
6. Ask more questions from your seniors.
7. During the sales call
   • Ask open ended questions to continue the flow of discussion.
   • Speak less and listen more, it will be take some time to understand the requirement of your customer which can only be got when they speak, you wont get much time to spend with your customer thus in the meeting utilize every minute, for them to come up with their thoughts.
   • Before meeting ends, ask if any more requirement or issue is pending and the summarize the situation with possible solutions or give them a time by when you would come back.
   • Once the deal is closed try to document it quickly.
8. As customer would always like to give the cargo to a trustworthy person. A shipper would never like to take risk to bear loss in logistics part.
9. If you donot find topics to continue the discussion, please have have market information to share, this is one thing which customer needs and more knowledge gives you a chance to convert a boring discussion into an interesting one.
    

4. Pros and Cons of this profile.

5. Skills to be competitive

1. The competitors mostly have same product and same type of services, what makes a difference for sales person is to have market information and to be a step ahead of competitors. Information like 
   • Future rate increases and reason.
   • Clear understanding for space availability / space congestion for different routes.
   • Trend of the market / rates / shipping line / cargo flow.
   • If one is first to get information only then one can be first to do planning and a good planner gets an upper hand on field during execution.
2. Always know you customers – there profit and loss / production capacity and increase / change in management / employees from top to bottom etc.
3. Try to have a PLAN-B.

6. How to make this segment more profitable.

Freight forwarding is segment where one get a chance to be in contact with many stakeholders of logistics sector and this opportunity should be used to understand different types of market requirement and open a division of service which can be profitable like

1. Reefer Warehouse.
2. Transportation if there are good market penetration options.
3. Try innovative solutions – like giving multi modal service and increase the service areas.

Also there are few export cargo which are occasional and but highly profitable, they need expertise and experience, few types of cargo are mentioned below –

1. Reefer cargo exports/imports.
2. Over dimensional cargo exports/imports.

Join different associations to come in contact of global partners which will act as a key to information

Example – International Federation of Freight Forwarders Associations, a non-governmental organization founded in Vienna in 1926.

Comparing freight forwarders and shipping Line: – Mostly, the services given by a freight forwarder cannot be given by shipping lines, because there are 10 big shipping lines handling 80% of global containers who cannot solve issues at local level, the forwarders can give a tailored service to each customer. There are thousands of exporters/importers and few hundreds of freight forwarders. This ratio is important to understand that the existence of forwarders will always be there.

7. Future of freight forwarding.

The future of freight forwarding seems to be tougher as now even the shipping lines are trying to be in direct business with exporters and importers but still the ratio of shipping lines and exporters is extremely high. Top 8 shipping lines are handling 75%+ containerized business while there are thousands of exporters thus the gap cannot be filled easily. So there will always be dire need of freight forwarders in the market who can personalize their service at ground level for each exporter with their expertise for their small set of customers.