It goes without saying that ocean freight rates from Asia have climbed to record-breaking highs during the course of the pandemic. However, as demand starts to level off a little, rates are looking likely to reduce during the course of this month and perhaps beyond.
With this in mind, and following an extended period of rate increases, we are witnessing the growing trend of ‘forward quoting’ or ‘carrot dangling’ - often from forwarders and logistics providers that were notably absent when the rates were rocketing.
At Westbound, we want to help you understand how you can identify these tactics to avoid being misled. We hope that by explaining these manoeuvres, we are able to help not just our own clients, but the entire importing community.
What is forward quoting?
Forward quoting is where you are offered a rate that is effectively lower than the real rate, which is a practice that can only be applied when rates are predicted to fall. The rate looks advantageous to importers when compared against their current suppliers’ rates, as the service provider knows that the rates are likely to drop.
Once hooked, the importer then makes the change, and by the time this happens could potentially be paying more than the rate they would have been paying when rates were adjusted down by their original supplier. Alternatively, if the rates do not drop, then the rates will be revised shortly after.
Forward quoting is often a process that less scrupulous forwarders use to make your existing supplier look expensive by comparison. After all, they can quote exactly what they like in a moving market, when they are not actually carrying your business.
Proceed with caution
Forward quoting is based solely on predictions of rates falling, and whether they do or not, they are unlikely to be fixed with any longevity. They are usually not an accurate like-for-like comparison, which is why importers could ask themselves why these 'under market' options were not around when the rates were rising.
Importers have paid over the odds for their freight from Asia for many month's now, and it is understandable that you will be looking to make savings. However, please proceed with caution and ensure you speak to your current supplier before jumping ship and then feeling awkward about returning - that is the trap.
The Westbound guarantee
Our rates will always be the real freight rates of the market, whether they are moving upwards or downwards. We do not believe in misleading tactics to hook short term interest; we strive to build long-term working relationships with our clients based on mutual trust.
If you have any questions on this topic, or would like to get competitive, yet genuine, freight rates, then please call 01375 800800 or email firstname.lastname@example.org.
At Westbound Logistics we pride ourselves in offering personalised and tailored logistics solutions. To find out more please call 01375 800800 or email email@example.com.