Risk management key ingredient in the future of freight forwarder networks

By: | at 08:00 PM | Channel(s): Logistics  

David Yokeum, president of WCA (World Cargo Alliance) Family of Logistic Networks, over the years has introduced some innovative programs and services to the profession of freight forwarding networks. Yokeum believes that “risk management” is a building block to improving forwarder networks and has introduced some groundbreaking programs towards that goal.

By George Lauriat, AJOTThe concept of freight forwarders banding together and exchanging services with each other isn’t really all that new. Forwarders have worked in loose alliances for decades. But according David Yokeum, president of the WCA (World Cargo Alliance) Family of Logistic Networks, easily the world’s largest and most comprehensive forwarding network, the rise of the Internet, is behind recent explosion in shipper and forwarder networks. There is the a tremendous need among forwarders to “partnership” to enable them to tackle global supply chain challenges – essentially to have a local representative that knows the lay of the land, particularly in emerging markets. And now there is the Web offering immediate access to every corner of the globe but often offering no more than a siren’s call, luring businesses into rocky relationships.
“You can be anything you want on the Internet,” Yokeum said during an interview with AJOT. “You can say the same things as us [WCA] by simply copying and pasting from our website. Sometimes I only ask that they at least remove my name from their site,” Yokeum remarked on the web efforts of some of the WCA wannabes. It isn’t that all the new crop of forwarder networks are misleading the forwarding public, but rather great deal of creative effort goes into building a successful neutral network and that process doesn’t happen over night. “Often they offer the “same” services but at a entrance low fee, but over time members find that they can’t really deliver the services,” Yokeum notes.
MANAGING RISK
Developing the services for the forwarders is a highly imaginative exercise. Yokeum, is something like the Thomas Edison of independent forwarding networks. He has invented many of the basic business systems used in networks, starting with the business model itself. “The reason why I started WCA ten years ago was that I had been running networks for forwarders and saw how the usual business model, “exclusive” one member per territory and run by the forwarders didn’t meet the needs of independent forwarders. We offer a choice in markets, and we also were careful right from the beginning to stay out of the freight business.”
An important feature of the WCA business model is that every member has been carefully screened before admittance and has to pay a significant fee to join. The reason for the screening is that the long-term success of the network is based on the trust between the members to do business with each other. And the fees pay for services that help them do business with each other. That begins with an eighty plus person staff and offices in Bangkok, Shanghai, Mumbai, Miami (moving to Argentina) and Las Vegas. The global presence of the WCA plus the 2,500 member offices gives the network a large-scale approach.
Yokeum likes the face-to-face, one-on-one style meetings and as a result he developed the online “One-On-One Meeting Scheduler” to enable members to set up business meetings in advance. The software prevents scheduling conflicts and arranges meeting places and times for the members. What makes the system unique is that a meeting can be arranged based on geography or specialty, such as whether a forwarder handles perishables or hazardous cargo.
Another creative service is the “Gold Medallion” program, which covers transactions between all member offices for up to a total of US$500,000 per year. The advantage is that each member knows the other member is good for the transaction. In the real world this allows a forwarder to take a chance in high-risk markets like Lagos, knowing the party on the other end is good for the money. Although th

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American Journal of Transportation