As a 3PL, you may be working with your clients on their LTL/FTL, air, rail, and intermodal freight, but maybe you haven’t yet gone after delivering freight to Jones Act locations like Hawaii. (Or perhaps you’ve dipped your toes into this market in the past and gotten burned by unreliable partners!)
Adding new freight destinations through partnerships can offer your business considerable benefits. First of all, it allows you to rapidly expand your own capabilities while skipping the steep learning curve that new destinations can entail. That’s especially true for a destination like Hawaii, where you’re dealing with four different islands, each with their own individual characteristics and, frankly, quirks. However, partnering with an established expert can get you up and running rapidly, saving you both time and money.
Additionally, expanding the destinations you serve makes you a more valuable partner to your customers. Adding a state like Hawaii offers them the ability to expand their business into new markets while leveraging a trusted, reliable partner they already do business with. (That’s you!)
Finally, if you’re able to do it all with the right partner, it can improve your bottom line, streamline your operations and offer you huge opportunities to better serve your customers.
If the idea of partnering with an experienced 3PL or freight forwarder to deliver Hawaii freight appeals to you, let’s talk about what to look for in a provider. That way, you can expand with confidence, knowing you’ve secured a partner who’s going to make you look good to your customer—and help you deliver on your promises.
Asset-Based Providers vs. Those Who Use Agents
3PLs and freight forwarders who service Hawaii fall into two categories:
- Asset-based operations that own their own warehouses, run their own fleets and employ their own delivery teams.
- Operations that use agents. In other words, these providers contract out their Hawaii deliveries to their own partners in the Hawaiian islands.
In theory, you shouldn’t notice much of a difference. If your partner has chosen their partners carefully, it should be seamless.
However, in practice, when it comes to Hawaii, using agents can muddy issues of responsibility. For example:
- If a shipment gets damaged, it becomes an involved process to track down exactly where the damage occurred—and which party is responsible.
- If a shipment arrives incomplete or incorrect, you’ll have to track down exactly where the error occurred. Was it a packing error that occurred at the warehouse, or did a box get left behind somewhere along the way by one of the providers?
- If a shipment doesn’t arrive when it’s supposed to, whose fault is that? When you’ve got a number of providers in the mix, you’ll spend more time tracking down exactly where the breakdown occurred.
In contrast, if you’re partnering with a 3PL or a forwarder who handles your Hawaii shipments from stem to stern, you’ll know exactly where the responsibility lies for any problems that crop up. No research required. Additionally, that provider will feel a greater sense of accountability and ownership because there’s no other party to pass the buck to.
When it comes to problem areas, a potential partner should make it easy to compare themselves to other competitors in the market.
Data Tells a Story
Any 3PL or freight forwarder worth its salt will be tracking its stats. When it comes to comparing potential partners, we suggest you request two key numbers:
- Their percentage of error-free deliveries
- Their percentage of on-time deliveries
Those two data points will tell you a lot about how they operate. They’ll also reveal whether this business is one you’ll be proud to partner with to deliver the highest level of service to your clients. If they’re unable or unwilling to share those statistics with you, that might also offer another data point as you evaluate exactly how this potential partner operates their business.
Once you have an idea of how your potential partner works, you’ll also want to evaluate how they’ll work with you—and your customers.
Making Tiered Pricing Models Work for You—and Your Customers
At the end of the day, partnering with another 3PL or forwarder is a business decision that will hopefully boost your bottom line. As a result, look for a forwarder who’s willing to work with you to create a pricing model that offers mutual benefits. More specifically, seek out a partner who can offer you both 1) blanket and 2) customer-specific pricing.
Blanket pricing is a rate that you’ll receive right off the bat from your partner. For example, let’s say you establish an agreement with a 3PL to deliver freight to Hawaii on behalf of your customer. They offer you a 20% discount on their rate—a blanket rate. From there, you can decide what to charge your customers.
However, let’s say you have a corporate customer looking to expand into the Hawaii market in a big way. They plan to start with 500 shipments a month, guaranteed. In this case, you might ask for a customer-specific rate. Maybe you’re able to secure a 30% discount that takes into account the high volume of business you’re promising.
If your partner isn’t willing to work with you in this way, you might consider looking elsewhere. Additionally, you’ll also want to find a partner who can make the overall pricing structure seamless for you.
Leveraging the Benefits of Automated Rating Systems
If you had to request a manual quote from your partner for every single Hawaii shipment you wanted to send, the inefficiency and personnel cost would likely erode your profits instantly. And that’s not to mention the fact that your business would likely grind to a halt.
So when you’re looking to partner with a 3PL or freight forwarder in the Hawaii market, look for someone who can offer you an automated rating system. This might take the form of a rating module you can install in your system. Once it’s in place, you put in the origin zip code, the destination zip code, the freight class, and the weight, and you instantly get a rate from anywhere on the mainland to anywhere in Hawaii. It can—should—be that simple.
Obviously, this offers you a tremendous advantage because you can add a completely new destination to your offerings without having to add personnel. The automated rating system eliminates the need to call for quotes or manually input data, both of which require time and effort from your staff. Automated ratings can also offer your customers an advantage as well since it can simplify their ability to calculate their cost of goods on a delivered basis.
However, if your forwarder isn’t able to offer you this level of automation and simplicity, you may want to keep shopping.
Finally, in our experience, a good working relationship between freight and logistics partners always comes down to a concept that’s simple to understand but sometimes complex to execute.
Communication: The Key to Strong Partnerships
As you’re comparing partners, make sure to look for one who demonstrates a commitment to communication. This might take many forms, but someone with the inclination to proactively reach out electronically can save you plenty of phone calls and offer your business greater efficiency. Additionally, make sure your partner offers access to an online portal for tracking and tracing, eliminating the need to play phone tag when you have a simple question.
Although it can be challenging to truly evaluate a potential partner’s communication before establishing a working relationship, keep your eyes open during your initial points of contact. How a company communicates during the sales and consultation process is often how it conducts business across the board.
Hawaii Freight: A Market with Potential for You and Your Customers
With a population at just around 1.4 million, Hawaii can offer your customers plentiful opportunities for expansion. Additionally, adding Hawaii freight to your roster of services also presents you with a set of opportunities: to offer deliver complete solutions to your customers and enable their growth, setting you up as an invaluable business partner.
Expansion into a new market can often come with its own lessons and challenges. However, when you pick the right partner, they can help you avoid some of the common bumps in the road, getting you up and running quickly—and enabling you to deliver superior service to your own partners and customers.
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Looking to expand into Hawaii freight? We’d love to help! We’ve been serving Jones Act locations since 1991, and we’ve been moving freight to Hawaii for nearly 15 years. We partner with several 3PLs to help them deliver their customers’ freight to Hawaii, and we welcome the opportunity to talk with you. Just reach out to get started with a complimentary consultation.
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