Freight Networks : Do you need one

January 20, 2019January 20, 2019 sofcookies freight networks, world trade

Freight networks have been around for over 40 years with the oldest as far as I can tell or remember being WACO. Formed in 1973 WACO’s founding members recognised the need to compete against the growing threat of American freight forwarders moving into the European market.

Since the early 70’s many freight forwarding networks have come and gone. The question is do you as a freight forwarder need the power of a global freight network.

The short answer is if you are a niche forwarder working a particular trade lane or product then probably not. What about those small to medium sized forwarders who want to claim hundreds of offices worldwide. A global freight network is an easy and quick way to achieve this. Just because it is easy and quick, does it give the right impression to your customer. Do shippers and importers care if you have an office in Kingston if their goods all come from China?

What do freight networks do

To begin with do not think of freight networks as one size fits all. Arguably the most popular freight networking system is the WCA. Founded in 1998 by David Yokeum the WCA is different to WACO by being Non-Exclusive. This non-exclusivity means that the network can have many more members in each country. WCA’s about us page quotes 7099 member offices in 191 countries. That volume of membership makes it impossible for a forwarder to support all members so WCA have over the years developed network after network.

WCA Projects
WCA Perishables
WCA Dangerous Goods
WCA Time Critical
WCA Relocations
WCA Vendors
WCA Pharma
Lognet Global
Elite Global Network
Global Affinity Alliance

Quite simply those 7099 members are split out across the 7 networks and so the WCA isn’t one network it is several. Is it succesful. Very for the owners of the network but have you ever been approached by a WCA network member for a quote. If you have and the network is so successful and so all-encompassing why are members going outside of the group for services and quotes.

Exclusive or Non-Exclusive

Their are many more non-exclusive freight networks than exclusive. The argument for the owners of freight networks is more choice. You can drop a member who does not work for you without leaving the network. A counter argument would be that the network should do more to police the members to ensure they work with each other.

The question then is which do you want, choice or a much harder freight network to enter but dedicated members who work together. Are you looking for a forwarding network who can use it’s combined buying power to negotiate with airlines and shipping lines as a group. If so are you committing to moving your cargo through one freight network and not owning your own freight bills. Certainly if you are looking for a stable core membership then exclusive networks are much easier to manage.