In this guide, we will discuss how to get shipping contracts.
To be profitable in the shipping industry, a good understanding of the process is a necessity.
Shipping as used here covers all types of freight movement. This includes air, land and water shipments. Whichever category you belong to, the information here should be very useful.
Contracts are the lifeline of all shipping operations. Hence an understanding of how these are obtained and entered into is necessary.
Background Checks are Vital
Effective freight operations depend on how well you carry out your due diligence. This is a business that connects multiple parties and can be easily hijacked by fraudulent elements.
Therefore, the integrity and the financial strength of your suppliers must be verified. You shouldn’t hesitate to go all the way in finding out how this supplier has fared.
Integrity is the currency of business as such, this must be an attribute to watch out for. However, a supplier may have all of these but have issues with their creditworthiness.
In other words, you must find out if the supplier can carry through the contract without any form of bankruptcy.
Assess the Relevance of Your Contract Goals
Getting shipping contracts depends a lot on having clear and concise contract goals. Freights come with different contract obligations. You must know just what fits a specific situation. Anything outside of this isn’t relevant and should be discarded.
Surcharge and rate schedule clauses should be fully understood by both parties entering into a shipping contract. You bet that your supplier is most likely to have a grasp of this.
You don’t want to begin negotiation for a shipping contract without understanding this. That is because disputes are likely to result, which may end up giving your company a bad reputation.
Assessing the relevance of your contract goals increases your chances of being considered for a shipment contract.
Make Shipment Details as Comprehensive as Possible
When negotiating a freight contract, you need to bring all relevant information to the fore. By this, we mean making your terms of contract as clear as possible.
Consideration for the client should be paramount. This is because you need to make the client see the reasons why they should patronize your business.
Your ability to be thorough with details on your freight services will likely impress your clients. This will likely result in a contract agreement.
Building and Maintaining a Reputation
Shipping contracts are such that they could either be renewed or terminated. This depends largely on how satisfactory your services. Which is why you need to build a good reputation for your logistics company. The freight industry thrives on reputation.
A client is likely to renew your contract based on satisfactory performance and vice versa.
Maintaining your reputation as a shipping company attracts recommendations too. The shipping industry is one that depends on networking.
Try creating a shipping service known for timely delivery and sticking to contract agreements and see how successful you become.
Get in the Mix
Suppliers, freight companies and a lot of other industry participants always have some form of association. Getting a shipping contract depends on how much you take advantage of such groups. People are likely to either patronize or recommend your services simply by having some form of commonality or association with them.
There are so many freight business organizations to join or fraternize with. You’ll need to choose any which is closer to what you do. For instance, if you are into highly specialized shipment services like those for medical equipment, you should be targeting groups within such an industry. The same applies to all types of shipment services. That way, shipment contracts are bound to come your way.
Create a Win-Win Scenario
One of the ways to get shipping contracts is by creating a model where all parties involved benefit. The freight industry is highly competitive.
As such you’d find competitors manipulating their costs to attract patronage. While this is standard practice in all capitalist economies, this could end up hurting some shipping businesses.
You should try to avoid this trap. The best way to do this is by creating a win-win situation. By adding value to your services, you make your shipping company stand in pole position to get considered for the contract.
Furthermore, it isn’t enough to offer attractive shipping rates and value-added services when bidding for a contract. You will also need to fulfill your end of the deal if you get chosen for the contract. This takes us back to keeping your good reputation.
Apply for Government Contracts
Governments conduct a lot of shipment activities. This is a viable option to consider when seeking for shipment contracts. You’ll need to actively search for such contracts.
Government departments and agencies will upload or advertise such information on their websites. You only need to get to such websites to access the information you need.
Your business circle is also a great place to get information on available contracts. Government shipping contracts pay well. This should be an incentive to spur you on your quest to get such contracts.
Understanding Maritime Laws and Insurance Coverage
This is an aspect of shipping you should be very conversant with, especially when it has to do with insurance. When negotiating a shipping contract, this will need to be fully understood by all parties involved. That way, you can make your terms of agreement very clear from the onset.
This should not in any way place the client in a disadvantaged position. Luckily, there are maritime laws that place limits on losses incurred on cargo outside of a shipper’s control.
These are some of the factors which help in getting shipping contracts. Knowing these and taking advantage of them greatly impacts your business appeal to clients. Also, remember the need to fully satisfy your clientele. this is likely to result in contract renewals or repeat patronage.