How do you select a suitable Logistics Service Provider (LSP) if you wish to sign on an annual agreement?

I dare say that there is no LSP that can offer all services in all countries. Even the large LSP’s have their limitations. It is therefore important that you know what services you are looking for. Here are some points that differentiate one LSP from the other:

- Services offered (ocean freight, airfreight, brokerage, storage and trucking)
- Sales force
- Market coverage
- Operations
- Customer Service

You could break down these points even further, e.g. ocean freight into FCL, LCL, Breakbulk, brokerage into import, export, transshipment, temporary imports/exports. Therefore it is important that your requirements are clearly specified before selecting a suitable LSP.

If you require services in a remote area in e.g. China then you might also be better off using a so called “local hero”. Large LSPs will generally only be present in remote areas if it’s commercially viable for them. If they don’t have an office and/or your business isn’t sizeable for them, then it’s unlikely they would open an office just for you there. In this instance, they might use a local hero and mark up the rates accordingly.