July 7, 2014
The latest news, company announcements, DHX-Dependable Hawaiian Express events and industry-position posts.

Shipping Lessons Learned

Although we’ve been DHX-Dependable Hawaiian Express (DHX) since 1982, in 1999 we joined the international freight forwarding industry as DGX with the assumption of the company was going under. With DHX we had historically focused on selling to shippers, however the beneficial cargo owners (BCO’s), for DGX were primarily other freight forwarders. We felt with time, our DGX customer base would eventually change and be made up of a few loyal forwarder partners, with more emphasis on customers who were shippers/BCO's.

Our study of the international forwarding community revealed that serving other forwarders as an NVOCC was a fruitless business. Many NVO’s had failed and been acquired by others, with their business folded into the business of the acquirer. So, our thrust was to build on the base forwarder business with BCO business. 15 years later we see we have failed in certain trade lanes, but made progress in others.

The question is how to turn those failures into successes.

In the meantime, We have learned valuable lessons:
  1. You cannot teach a domestic transportation salesperson the international business easily and rarely successfully. When you attempt to train, the salespeople want to sell what they feel comfortable with, and lots of what they sell in the domestic trade is based on value, that is how you differentiate yourself in the market plus a competitive price. When dealing with other forwarders, such as our international business was, selling is primarily focused on one thing - price, given that service between most NVO’s to the forwarders is relatively the same. So, when selling value to BCO’s and price to other forwarders, not only do the salespeople have to have an extended knowledge of the product to be able to sell to both forwarders and BCO’s, but their salaries and talents are minimized when selling to forwarders because their focus is based on delivering a cheaper price, as opposed to product differentiation and value.
  2. Selling to BCO’s for international import and export business requires not only product knowledge and differentiation, but also an infrastructure and expertise to support it. Where freight forwarders know the import /export rules and regulations, a BCO, depending on size, may not. So all the sales associates in your office need an in depth knowledge of your service. Basically, the BCO needs to rely on your expertise to protect and serve them. Add to this a domestic sales force that’s really not familiar with international freight and you do not get warm, fuzzy feelings of confidence if they go to an associate in the international business with a BCO question, and then get a response they do not believe is a knowledgeable, professional response. They feel exposed that they are placing their existing accounts at risk, and soon stop selling a service they don’t know and/or feel uncomfortable with.
  3. If management feels changing to a different customer base will hurt their area on the surface they may support the change on the surface only because leadership is pushing for it, but they probably are not expending energy to make it happen. During the time the change is being made, they will look lesser to themselves and the boss, so it is against their human nature to support something that may hurt them.
Many will talk the talk, but will not walk the walk. Possibly this group of managers does not have the expertise needed to teach their team because they have grown up serving other forwarders, and cannot figure out how to serve BCO’s.

A manager not wanting to look lesser, coupled with a lack of appropriate knowledge and/or abilities to teach what they have learned from years of experience, can potentially stop upper management’s thrust to a different type of customer base in its tracks.

So where do we go from here? We are always, hopefully, learning, changing and evolving. More to come on these challenges.

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