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Critical Factors to Consider when Evaluating Automatic Spot Quote Forwarders

As an importer, you may have used freight forwarders that provide automatic spot rate quotes for your shipping needs. While this option may appear convenient and cost-effective, there are several reasons why it may not be the best choice for your business. Below are ten critical factors to consider when evaluating freight forwarders that offer automatic spot rate quotes:

  1. Inaccurate Quotes: Spot rates are subject to market fluctuations and may not reflect the actual cost of shipping your goods. Additionally, automatic rate quotes may not consider any specific requirements for your cargo, resulting in an incomplete price.
  2. Lack of Transparency: This pricing process lacks transparency, making it challenging to assess the quality of services provided or compare quotes from different forwarders.
  3. Limited Flexibility: Automatic quotes may not be customizable or negotiable to meet your needs, resulting in a lack of flexibility when arranging custom shipping solutions.
  4. Quality of Service: Forwarders that quote in this way may lack the same level of expertise or experience as a traditional freight forwarder who provides human interaction and personalized support.
  5. Rates are Non-Negotiable Once Booked: Once you have booked a shipment based on a spot rate quote, you may be unable to negotiate the price further, even if the market price falls.
  6. Difficult to Change Vessels or Destinations: It can be challenging or even impossible to change the vessel or destination once your shipment is booked.
  7. Inability to Combine or Split Bookings: Freight forwarders that rely on automatic quoting may not accommodate combining or splitting shipments, resulting in additional costs and delays.
  8. Cancellation Fees Incurred Once Booked: If you need to cancel a booking, you may be subject to unquoted cancellation fees that vary depending on each carrier’s terms.
  9. Amendment Fees: You may incur amendment fees if you need to change or amend a booking.
  10. Limited Destination Free Time: Your shipment may be subject to higher demurrage and detention costs, as free time may be limited –a detail usually not addressed by automated spot rate systems.

In conclusion, while automatic spot rate quotes may seem like a convenient option, it is crucial to consider the factors mentioned above when choosing a freight forwarder for your shipping needs. Ultimately, working with a freight forwarder that understands your needs, and provides personalized support and customized shipping solutions is often a critical ingredient of an optimized supply chain.

READ: Transloading: A comprehensive guide with examples that will improve your import business.