When you’re selecting a freight forwarder or shipper, you might notice that they use “agents” in certain destinations to make the final delivery of your freight. This can be especially prevalent in far-flung places like Hawaii and Guam.
Before deciding on a forwarder, you should know that using agents can have three potential areas of impact on your business. To help you make a well-informed decision, we’ll walk you through each one of them so you can see how delivery from an agent might affect your operations.
But, first, let’s walk through the role of an agent so you can understand how it works—and why a forwarder might use an agent in the first place.
When a freight forwarder or shipper doesn’t have a physical presence in an area, they’ll contract with another company to finish the job. For example, let’s say you have a shipment headed for Kauai. If your freight forwarder doesn’t have an office on Kauai, they’ll make an agreement with another company on the island to receive the freight, load it onto a truck and make the final delivery to the destination in Lihue. That company on Kauai is considered the freight forwarder’s agent.
In other words, instead of being handled by a single company from start to finish, your cargo is passed on to another company—the agent—to handle the final delivery.
Ideally, everything goes smoothly and you’re not even aware that your forwarder is using an agent for delivery.
However, when a freight agent gets involved, there are three potential areas in which challenges can arise:
Challenge Area #1: At the Time of Hand-Off
Regardless of who delivers your shipment, there are some potential problems that might reveal themselves at hand-off, including:
- The cargo could be damaged.
- You might have not received the quantity or correct items you requested.
- The delivery could be made at the wrong time or to the wrong location.
When you’re dealing with a direct delivery—one that’s made by the original company you contracted with—it’s easy enough to trace back the problem to its origin and correct it. After all, the same company has retained responsibility for the shipment from pick up through drop off.
However, if an agent is involved, the line of responsibility isn’t always as clear:
- Where did the damage occur? If it wasn’t documented promptly, you could be in the middle of a disagreement between your forwarder and their agent, with no one claiming responsibility for the damage.
- Why didn’t you receive what you ordered? Was there a miscommunication? Did someone make an error in packing? Did a box get left behind somewhere along the route? Pinpointing the error might require extra research to prevent it from happening again.
- Why didn’t you receive your delivery where and when you requested it? Did your forwarder miscommunicate with your freight agent or were they simply unable to accommodate your request? (More on that in #3!)
At the end of the day, when you’re working with a forwarder who does direct deliveries to your final destination, you’ll find it easier to track down—and eliminate—the source of any problems. That clear line of responsibility can mean quicker resolutions, saving you significant time and hassle.
In contrast, when you’re working with an agent, locating the source of the problem might require extra research on your part. All of that backtracking costs time and money, as do any problems that are discovered on delivery.
Challenge Area #2 – Tracking the Progress of Your Shipment
When you work with a freight forwarder, they’ll give you the means to track your shipments, often through an online dashboard. Additionally, when you’re using a forwarder who’s capable of direct delivery to your destination, you’ll get tracking and tracing every step of the way, so you’ll always know exactly where your cargo is.
However, when a forwarder uses an agent, the tracking systems don’t always communicate with each other. If you’re looking for an update, you may have to make a phone call. In turn, your forwarder may have to call their agent and get back to you.
Although this can seem like a small inconvenience, if you move a high number of shipments, these extra steps can create inefficiencies that cost your operation both time and money.
Challenge Area #3 – Less Control over Service Levels (and Maybe Even Costs!)
When you’re working with an agent, you’re essentially a second-tier customer—a customer of an agent’s business partner. As a result, you might not get the first-tier customer service you’ve come to expect when you work with your forwarder directly.
Think of it this way: Let’s say two customers want the same delivery time: 10:00 am on Tuesday. However, these customers are at least two hours apart on the Big Island. If the company only has one truck available at the time, one customer will get the 10:00 am delivery time, and the other will have to take delivery at 1:00 pm.
Now, when it comes to choosing who gets their preferred delivery time, who do you think the agent will choose:
- One of their direct customers?
- Or the customer of their business partner in California?
That choice spot is likely to go to a direct customer, which is why you’ll often get better service if you’re working with a forwarder who does direct delivery in your area.
Let’s examine another scenario: Say you’re expecting a delivery from your forwarder’s agent at 11:00 am tomorrow morning. Then, one of the agent’s direct customers calls with an emergency request, one that would bump your delivery time. As a second-tier customer, you’re likely to get your delivery rescheduled, which could end up costing you significant time and money, especially if you’re arranged for extra labor to help you receive that shipment.
Or, alternatively, if an agent fails to show for a delivery or shows up late, you could also find yourself in a tough scenario. In addition to losing labor costs while your workers stand around waiting for the delivery, you could also be losing sales, since your product will be delayed in getting to your customers.
That’s why it pays to create relationships with forwarders who are able to move your shipment from origin to destination with their own resources. As a direct customer, you’re better positioned for top-level customer service.
One more note: You might even find it easier to control your costs if your freight forwarder is doing all the work themselves. After all, when it comes to an agent, a freight forwarder is essentially passing the agent’s cost along to you, with little room for negotiation. However, in a direct delivery situation, you’re negotiating with someone who has full control over their costs, which gives them more agency over the rates they’re able to offer you. At the end of the day, this could give you more room for negotiating a long-term relationship at rates that support a mutually beneficial relationship.
Understanding the Impact of Freight Agents on Your Operations
In an ideal world, your experience with the agents of your freight forwarder would be entirely seamless. If you didn’t notice the name on the truck, there are times that you might not even realize an agent was delivering your freight.
However, if hand-off problems occur, if you need tracking information or if you’re unable to get the service levels you’re looking for, you might feel the impact that results when your freight forwarder doesn’t deliver directly in your area.
As you evaluate your relationship with your freight forwarder, keep an eye out for these issues. And if you’re not sure whether your forwarder uses agents, ask! This will give you all the information you need to choose a freight forwarder who will be an asset to your operation, rather than a challenge.
Looking for a freight forwarder who delivers directly to all of the major islands of Hawaii and Guam? We’d be happy to help! We deliver direct twice a week to Hilo, Kona, Maui, Oahu and Kauai, and we do interisland shipments as well as shipments to and from the mainland. We also deliver direct to Guam. Just get in touch with us for a complimentary consultation.