Sea freight shipping: 5 techniques to improve negotiation
The waterway mode of transportation has begun to gain more and more importance in the country. Historically built upon ground transportation, Brazil suffered first hand the consequences of its choices on May 2018 with the truck driver’s strike. Now, companies have been looking more closely into possible alternatives.
If you work in this field, the time has come for you to enjoy the opportunity and get a good profit margin by negotiating sea freight shipping services.
Shipping, in its maritime modal, can be charged either by the weight or by the square meter. In some cases, the price can be set based globally, for example, when freighting containers. In any of these options, be aware at the moment of negotiation, because that is the time for you to guarantee as many advantages as you can for your company.
Therefore, in this post, we bring you some of the techniques you can use to achieve better deals. Check it out!
1. Have everything in writing
Words tossed to the wind are worth very little in the business world. Because of that, it’s fundamental that the entire sea freight negotiation process be registered in writing. From the first proposal — preferably initiated by you — to your final signature on the contract, everything needs to be properly documented.
Besides guaranteeing security, documenting each step is important because it provides a history of the process. Consulting these documents might be useful in the future, even for you to improve the techniques you used so as to get more advantages.
Many suppliers are concerned about registering the result of a negotiation on paper, precisely because they are doubtful they will be able to provide everything they offered. If you face difficulties in this initial stage, thank them for their time, but seek new partners.
2. Understand until which point either side can give in
The art of negotiating presumes gaining advantages for you and for the corporation you represent. The thing is, this goes for both sides of the table — just as you are trying to get the best prices and conditions, so is your interlocutor. On account of that, negotiations don’t always end in a way that’s satisfactory to both parties.
This poses the question: how far can negotiating go? The truth is, there isn’t an unbiased answer to that. Everything depends on what is being dealt and on when the negotiation occurs. Good negotiators are the ones who, during meetings, understand the situation of their partner and propose that which they know can be accomplished. After all, being able to negotiate an extraordinary condition for your company is worthless if you don’t have even the slightest guarantee the deal will actually be honored.
So don’t underestimate your curiosity when negotiating. Ask as many questions as possible and investigate the situation of your supplier. Thus, you will know how far the company can go and will be able to gain advantages which are good and fair for you, while also having the guarantee that the agreement will come to fruition.
3. Analyze all sea freight shipping flows
The sea freight shipping market has specificities that make it unique and that also might lead negotiations to be, in certain moments, more or less lucrative. Therefore, you need to pay the utmost attention to shipping flows before even actually beginning to negotiate.
Contrary to popular belief, paying attention to flow doesn’t have to do only with the similarity of the cargo being transported. You also need to previously map out seasonality and tendencies which might affect the desired results. A good example is the importance of understanding which products have a higher demand in each moment.
Soybean transportation from Brazil to the rest of the world, for example, is heavier in the second semester, which means that demand is likely higher then.
This peculiarity can make your shipping more expensive, if you leave negotiations to the last minute, but also result in better prices if you keep ahead of your competition and define your routes in time for charterers to supply demand.
4. Set routes for a round trip
The routes that make up the maritime modal are not isolated. What does that mean? Basically, if a ship leaves from point A to point B carrying cargo, at some point it will have to make the trip back to its origin, that is, to point A. Transporters don’t want to, and cannot, come back empty-handed, because that represents a major financial loss.
Knowing that, a good deal can help you get more competitive prices on maritime shipping. In the case of an import, for example, you’ll come out ahead if you propose the condition that a ship will transport your cargo on the first route and come back to its origin carrying another previously agreed upon cargo.
If that’s not a possibility for your business, an alternative might be to form a partnership with a company that has goods to export and share the cost of shipping. This kind of deal is known as a round trip and is always more lucrative for the company shipping cargo.
5. Choose good brokers
Brokers are agents that act as mediators between companies and sea carriers. They act more or less as insurance brokers, transiting between both sides and making business possible. These agents are fundamental for sea freight shipping, since they have a broad knowledge of the market and know how to get the best prices and conditions for transportation.
And, precisely because of that, they must be efficiently integrated within the company so you can have access to the best opportunities. Create a database listing the best professionals on the market and keep a close relationship with them — one that is advantageous to both parties.
As you can see, getting good deals in sea freight shipping involves many variables and the end result directly affects your company’s profit margin. This means that your results depend on your actions! Therefore, stay tuned to these negotiating tips and help your colleagues also evolve on this matter by sharing this post on your social media.