Moving freight globally and domestically can be expensive and complicated. What can importing/exporting businesses do to make the process easier and more cost efficient? Cesar Lopez of AMTIL corporate partner SternaGL offers some useful advice.

If you were to ask almost any business in Australia which relies on imported or exported goods to comment on their supply chain costs, the resounding groan and corresponding eye-roll should provide a fairly good indication of the pain being felt by many.

Let’s not beat around the bush, moving freight globally and even domestically can be downright expensive. We’ve all heard the horror stories of freight costs equalling or exceeding the actual value of the goods being transported – whilst that’s a terrifying scenario, unfortunately it’s nothing new. The real question is ‘why?’ – Why does it cost so much to move something from point A to point B? Surely it can’t be that complicated, right?

The truth is, it kind of is complicated. Correction – it can be complicated.

The sheer number of parties that may be involved in any one shipment can knock the uninitiated about – seller, buyer, shipper, consignee, consignor, notify party, manufacturer, shipping line, brokers, forwarders, insurance, trucking or rail. Where it gets really fun, is that most of these parties could be the same company, or each party could be a different company – and not just in the destination country, but also in the country of origin.

It’s no surprise that astute businesses are ‘partnering up’ with logistics firms to drive a more collaborative and consultative approach to their business decisions – after all, logistics costs can be sizeable for many businesses, and as the groaning and eyeball-rolling mentioned above suggests, can be the cause of great angst.

So what can importing/exporting businesses do to make the process easier and more cost-efficient? The overarching answer is three-part:

  1. Find a logistics partner you can trust, who aligns with your business’ values
  2. Find a logistics partner you can trust, who aligns with your business’ values
  3. See 1 & 2 above

There is obviously more to it, but we will get to that shortly.

The reason I reiterate this point an annoying three times is because it seems to be so frequently overlooked. It is fair and reasonable for businesses to choose whom they work with in the logistical realm based on the implied understanding that all firms will have their best interests at heart? Unfortunately, it’s all too common that that’s not the case.

Aligning your business with a logistics supplier of the same ilk is a tried, tested & proven recipe for effective control of freight costs. It brings with it a level of communication and understanding that cannot be replicated in the cold buyer-seller type of transaction we see all too often in this space. With understanding comes trust, with trust comes better process, and with better process comes cost reduction and improved efficiency. As mentioned earlier, moving freight can be exceedingly complicated, you need sound and honest advice from your logistics supplier to help you make effective decisions and achieve optimal outcomes for your business.

So if you’ve found the right logistics partner, what else can be considered to improve the process?

There are still a number of internal considerations that can drive a better outcome for your business. Being aware of the options available to you is an important factor when choosing how you move your freight and in what frequency. Some factors for consideration:

  • Think efficient packaging. The correct packaging can cut down on the amount of space and weight a product occupies in a container or an aircraft. If packaged optimally, you will receive the lowest possible fee for the space your cargo requires. There’s no sense in packaging a stapler in a guitar case and complaining about the cost of shipping a stapler.
  • Ship more products, less frequently. This may sound a little strange, but the logic is basic. Whenever possible, wait until you have the largest volume of cargo available before shipping. Generally speaking – the bigger the consignment, the better you can spread the shipping cost across your products. Your freight can be consolidated along with other businesses’ cargo if you can’t fill a container yourself, but it may not be cost-effective in some cases. Also, you should consider shipping 20ft containers even if you only have 15-16 cubic metres of cargo – you may be shocked at how competitive this option is compared to LCL cartage. Of course it all depends on the type of product and the cost of it.
  • Plan ahead. If you plan your moves in advance, you can lower your transportation costs by taking advantage of competitive sea freight rates instead of using airfreight.
  • Using a GOOD freight forwarder = cost savings. Due to the high volume of shipments handled, good forwarders are able to negotiate better deals with carriers. Those savings are passed straight on to you. Due to this advantage, a freight forwarder can offer better rates on consolidation and other types of shipments.
  • Evaluate the service level you need. There’s no need to overpay for same-day deliveries if the client requires the product three days later.

It’s important to work with your logistics supplier as a partner and not as a commodity to streamline the movement of your products. Taking this approach along with consideration of how you move your freight will improve the overall experience and stop the eye-rolling and groans!

SternaGL combines logistics experience and knowledge with exceptional human talent to provide a tailored solution for your cargo needs. From small parcels, to over-dimensional project cargo, and everything in between, SternaGL’s dedicated team utilises their extensive skill and expertise to manage the journey of your freight from origin to destination – intact and on time.

Cesar Lopez, Director: