Posts tagged New Business

Today I received a call from a guy I shall call him S. Mr. S wanted to ship 24 tonnes of rice daily, from somewhere in Selangor, to Kuantan. He pretty much laid all the details required, and ask me for a price.

Angry Callers

As a freight broker without any logistics assets, I set up to contact other transporters on this. Somehow, their voice and comments seemed to show that they have been asked before. Well, if that’s the case, I called Mr. S back to check for more information.

Apparently he wanted a dirt cheap price which sums up to less than a thousand ringgit per trip. Then, probing further, he states himself as a transporter. So he’s kind of the type where he’s finding companies to outsource his own stuff, maybe so that he can proceed to send other shipments. But seriously, the price is too low. Maybe he’s trying to dig into other transporters so he can get a big amount of money just by outsourcing? (HEY THAT’s MY JOB!)

See the complication. Freight brokers, freight forwarders, everyday truck owners, big transport companies. Each asking each other for a price! Because there is no definite balanced comparison unlike the U.S., everything regarding shipping in Malaysia is pretty….. ‘guess-it-yourself’ centered.

Here’s what I study so far,

1) You have to get a sales and marketing team in order to survive. Get the big recurring clients that will pay, pay, pay!

2) You need to have in-depth knowledge on shipping. Everything on shipping. Unless, you want to do niche. Then again, being a niche, as a freight broker, that doesn’t really work well.

3) You need to know a lot of people. From shipping companies, to airliners, to truck companies. You need to have loads of contacts and links. Forge partnerships on every aspect. I believe though, the harder it is to find those partners, the better you can squeeze out a price. For eg: company A who does online advertising, will charge more as compared to company B who is pretty much unknown. Marketing from them, you see them through the marketing = more expensive.

4) Documentation. You need to have access to documents that can create partnerships for you, to provide invoicing, to provide receipts, to provide quotations, to provide every little requirements that they need.
Let’s recap. Summary of the entire process of a freight broker.

Full knowledge in logistics > Registering a logistics company and joining related associations > Getting all the contacts available on logistics > forge agreements with them Or not > Marketing, selling and advertising > Searching quotes from all available contacts > obtain second best quote and top up a little > return quote to customer.

If customer accepts > contact the transporter to pick up and send the items > invoice to client > pay transporter > client pays you.

If customer rejects price/fades away > better luck next time. Recap what went wrong. Customer service? (revise your technique for picking up calls) Taking too long to find quotes? (revise your contact list) Too expensive? (revise your contact list to get better rates)

As mentioned again and again, starting up a business, it’s not so easy.