The Curious Case of CHA not being a forwarder

Has this question ever occurred to you as to why are shopping malls today more popular than the traditional markets, or as to why do consumers prefer to do their shopping in the malls rather than going to street-side shops which they have been doing for years?

The answer is very simple. You get all your shopping needs fulfilled at a single location. Then come the reasons of ambiance and quality.

Now imagine that this consumer is an exporter or an importer (let’s collectively call them shippers). A typical shipper has various logistics requirements and imagines that his current service provider does only CHA work. In that case, what will the shipper do? Of course, he will be forced to go to a minimum of 5 different agencies, i.e. a transporter, freight broker, warehousing company, Octroi agent and DGFT consultant, and possibly more agencies depending on the type of shipment.

Today, these are the basic service requirements that any shipper (consumer) is looking for from his clearing agent. Now let’s take this situation to the next level. This shipper has an import shipment and his supplier is willing to supply the goods only on Ex Works basis. Where does the shipper go now? He will obviously look towards his CHA for a solution, and if the CHA is not able to provide one, the shipper will be forced to go to a forwarder.

Now we have clarity as to why it is so important to offer one-stop forwarding solutions to the shippers at large. In India we have a great tradition of Customs clearing agencies. Some of them have been in existence for 100+ years and have such excellent domain knowledge of the Customs clearing process that their expertise is sought by the Customs Department on many occasions. This means that obviously they are doing something right which has ensured their existence for so many years. Is that good enough in today’s context?

The answer is a clear NO. If the clearing agents do not offer all services to the shippers, then the shippers will look for alternative solutions. They will continue to get the clearing activities done from the existing clearing agents and move the forwarding business to some other competent service provider. Here’s a case of lost opportunity, and gives strong reasons for today’s clearing agents to shift their business models from just being a clearing agent to being international forwarding agents.

Now how does one do that? The answer is fairly simple:

  1. Train yourself, your staff and your successors (children) on forwarding. The easiest solution is to send them for two years training with a large international forwarder or a shipping line.
  2. Become a FIATA member or become part of a global forwarding network which will give you instant access to a worldwide network.
  3. Equip yourself with technology; use the best software available in the market.
  4. Do your business with quality—get an ISO certification, get a quality expert to assist you with the process.

The last two points are those of ambience and quality which I referred earlier in the context of the shopping mall. The software gives you the ability to reduce service deliverable time and the quality initiative gives consistency.

The Association of Multimodal Transport Operators of India (AMTOI) is available to assist the Indian transport industry to upgrade and change in order to face the challenges of the new business environment. AMTOI can be reached on info@amtoi.org

Source : Vivek Kele, Invitee Member, AMTOI – Mumbai, Sept. 12th, 2011

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