How a Professional Logistics Network Can Increase

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By Richard J. Overton, CEO X2 Group

Before we can understand how we can maximize profits, see an improved competitiveness and ensure long-term sustainable growth for our logistics business, we must first understand the elements of our business and what roles they play within the supply chain. Then we can look at the challenges we face within that segment.

X2 Logistics Networks were set up to focus on the freight forwarding segment of the supply chain. Our role is to provide professional support and to assist agents all over the world to improve their financial and operational performance.

Outsourced logistics activities commonly fall into three types of services: contract logistics, freight forwarding and transportation. These businesses are deeply interconnected, with some overlap (see image below – Supplier to Client Supply Chain Flow). For example, freight forwarding operations frequently involve activities associated with contract logistics services that are performed when goods are collected and received, such as cross-docking and warehousing. Similarly, contract logistics providers often are responsible for local distribution and derived truck transportation. The three services are built on different business models.

Over the years there has been a relatively fast growth of new 3PL providers (contract logistics) and transport companies opening up all over the world, especially in post conflict and new emerging markets. However when compared to these other two types of logistics providers the increase of freight forwarders has grown at a much more rapid pace. So not only are we seeing a much more competitive environment with forwarders, but there is also volatility with freight rates and oil prices and the freight forwarding market is undergoing structural changes and an uncertain global economic situation. This means that forwarders need to be attuned and responsive to new macro-trends and become more customer-centric.

A recent study I read found that many forwarders, even some of the largest, lack the tools that would give them the visibility and the agility to prosper in this challenging market environment.

Furthermore, global flows of goods are becoming more disparate and what many consider to be tier one freight forwarders account for roughly 41% of the total market share. This is 41% is shared between over 100,000 freight forwarders worldwide.

So the need to be a part of an organization that can assist with the challenges forwarders are facing today is now becoming more and more relevant. Many forwarders are seeing the benefit of joining logistics networks that can help with global growth and assisting them to service more customers in more markets worldwide.

In a market dominated by the multinationals, a professional logistics network is designed to link together like-minded independent forwarders from all over the world in a freight forwarder network that will give them the tools necessary to compete on a global scale.

Of course there will always be technological game changers that will require every industry to adjust but the fundamentals of increasing profitability, competitiveness and long term growth are still the same for the forwarder. That is winning more business, servicing more clients and working with more reliable agents worldwide. All of this can be achieved by working within a global network of fellow forwarders that can be trusted in all markets worldwide.

global freight forwarders move cargo around the world

There will always be technological game changers that will require every industry to adjust.

A professional logistics network is essentially an alliance of hand-picked freight forwarders who are required to meet certain standards and are encouraged to work together to grow their businesses and serve their clients globally. Some of the benefits and services that a freight forwarder should receive by joining a professional association are highlighted below.

A good network should have an impressive global presence where members are able to work cooperatively to serve clients globally, wherever in the world they need to send a shipment. Consider that the aggregated figures of networks members may show superior resources in terms of size and reach than some of the largest multinationals. Now combine these advantages with local capability, flexibility, and the ability to serve shippers faster and to reach almost any market worldwide.

“There is simply no better generator of new business than the power of working within a group as one cooperating entity.”

It makes sense that as a member of a professional global network you are in a strong position to secure new business by exchanging shipments with other members in different locations.

To further support how a professional logistics network can increase your profitability, competitiveness and long term growth consider the following benefits enjoyed by members:

Annual Meetings- The annual meeting is the most important benefit a member should receive and attendance is crucial to ensure each agent’s success. Developing a strong worldwide network of agents requires regular trips overseas. A networks annual meeting allows all members from over 130 countries worldwide to meet and come together in one place at one time, saving considerable time and money.

An International Brand- Membership of a professional network should allow you to promote your firm with the network’s logo. In addition the network should be able to offer you media services, bespoke brochures and digital marketing materials that will help you to overcome client perceptions that independent freight forwarders are not equipped to provide a truly worldwide service.

global freight forwarder

Participate in global tenders- Opportunity to tender for the larger contracts by qualification through the network. As a member you will be backed by a global brand and a network of quality partners, giving you the confidence that you will be able to fulfil your commitments.

Lower Rates from Carriers and Insurers– As the network starts to reach a critical number of members, their cumulative volume will be used to negotiate lower rates from airlines, shipping lines and insurers.

Payment Protection- You want protection against unpaid invoices. In the rare event of an unpaid invoice from another member, the network should assist in disputes and arbitration and compensate members against this lost money. This protection provides members with the peace of mind to cooperate with fellow agents with trust and in complete security.

Faster Quote Response Time- The ability to obtain current local origin/destination charges (Air, FCL, LCL) for each member can be shared quickly and this means that our members can respond faster and provide better value services.

Essentially a professionally managed logistics network should tick the boxes of increasing profitability, competitiveness and long term growth for freight forwarders. But of course no different from any successful business everything comes down to the financial investment in the organization. And the knowledge, experience and professionalism of the network team members and management.

Richard J. Overton is the CEO of the X2 Group of Companies based in Bangkok, Thailand. His vision is to bring an innovative and professional approach to the world of logistics networking. Richard believes in identifying customer’s value propositions and delivering on them without exception. He has developed a firm knowledge and extensive contacts within the global logistics industry. His strong understanding of international sales and marketing helps ensure that X2 Logistics will be a network for today and the future.

Member Testimonials

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X2 always thrives on raising the bar when it comes to connecting people. X2 conferences are one of a kind! As the founding member, we are happy to be in X2 Elite and the X2 Projects Network.
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"We believe in limiting memberships to a minimum and have found our home for projects as well as general cargo within the X2 family."
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I've been in the business for over 30 years, I have never had or experienced such and effort by the management team of the network to get members to participate and make their membership work for them.
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The professionalism and organisation shown from the X2 team totally blew us away.
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Richard is an innovator, what I find great working with him is that he can see the future.
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I was positively surprised from the amazing organization and specially the commitment of all X2 Team making this event incredible for everybody and in all complete fields.
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We have to skip the networks that are founded only for the benefits of the founders Quality and not quantity.
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We found the best way to build trust is to go to the conference and meet with people, talk to them and get to know them.
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As a new member of the X2 Network, we are very impressed by the organization and its professionalism and focus on mutual business development. X2 has already given us some great opportunities to work with likeminded partners across the globe on both project and general cargo.
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Great energy and drive throughout the X2 Team and high profile Network agents to complement each other’s business across the globe and help achieve positive results. Keep up the good work!
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X2 is like a family! We have met so many amazing partners. There has been so much success with the relationships we have developed throughout the years and most importantly friendships that will last a lifetime. And we love the networks' reach!
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We have been a member of X2 since 2014 and have attended six conferences. Richard and his passion for the network with his enthusiastic team have arranged all the conferences perfectly considering every single detail. We made many friends and found new global partners to work with at the conferences. X2 is one of the good solutions for our needs and we hereby thank them for their efforts.
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I have attended a lot of networks and annual meetings in the freight industry, but I have never come across a network like X2. This is another level. It is a pleasure to be a part of the X2 network - the professionalism, the attention to detail, the broad and knowledgeable staff - everything at the highest level.
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X2 is really an excellent logistics network, with a well-organized team that is always thoughtful and helpful. We are happy with X2 and expect a long journey together.
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"At X2 Network we found a group of partners that really want to build a long-term relationship. Companies are run by people that really care about your business and success. X2 Team has been really supportive and very active to develop new opportunities for your business''.

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X2 Conference

Our special networking event is about smart freight forwarders coming together to grow and develop business within the group by providing an opportunity for all members to gather in one place to form and extend personal relationships.

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