Finding Freight Partner [Updated: Nov 2021]
You’ve researched your target export market. You’re confident that you’ve picked the right place and your products will go down well. Now it’s time to get the wheels in motion, thinking about how you’ll get your goods to overseas customers on time and in perfect condition.
No company can go it alone. Without the international networks and contacts of larger organizations, how do you find the research, shipping, warehousing and distribution partners you need to make your export venture a success? Research shows inability to find the right foreign partners is one of the main stumbling blocks for SMEs looking to engage in global trade.
Happily, there’s plenty of help available, including online portals and government-backed programs.
A good first step is to find out if your government’s international trade department can help you make connections.
The UK government’s Department for International Trade offers support and resources for UK businesses interested in exporting. Its portal on the Exporting is Great website can help you find export opportunities and partners.
The Enterprise Europe network is also a handy resource. Use the online portal to search the network of over 600 organizations in Europe and beyond, looking for partners to manufacture, distribute and supply your products.
If your business is based in the United States, the U.S. Commercial Service may be able to help make matches. The Gold Key Matching Service gives you access to staff based in 80 countries across the world who can set up meetings with potential agents, distributors and other partners. The fee starts at $700 for small and medium sized companies, and the service includes customized market and industry briefings and appointments with prospective trade partners in key industry sectors.
For South African businesses, the Department of Trade and Industry has a Trade Opportunities Centre that can match export-ready SMEs to international business opportunities, received via its network of foreign representatives.
If you’re based in Australia, Austrade seeks international opportunities for Australian businesses and can introduce you to potential overseas partners.
There are also corporate portals and databases. For starters, check if your bank offers any kind of supplier networking service. You could also consider attending a trade mission or a trade fair, which provide opportunities for networking in your target market. Check your government’s website for a list of trade missions, and try searching online databases for relevant trade fairs.
It’s important to make sure prospective partners are trustworthy and up to the job because mistakes further along the line could be costly and damaging to your brand.
Ideally, you’ll find a partner that has plenty of prior experience working with other exporters. A simple online search can unearth important information about the firm’s reputation and previous experience. Next, ask your potential partner for testimonials, references or other proof that previous collaborators were satisfied. You should also ask your target partner for any relevant paperwork like an operating license and insurance certificates.
Check the relevant country’s company registry to make sure the business is properly registered and to confirm basic information like address and date of incorporation. Browse this list of overseas registries to get started, but bear in mind that corporate filing requirements differ substantially from one country to the next.
If you want to conduct a credit check on your potential partner, there are several companies that offer this service, including Experian in partnership with the British Chambers of Commerce and Dun & Bradstreet.
Your government may also provide background checking services. In the US, for example, you can commission the International Trade Administration to create an International Company Profile on a potential partner, which includes a detailed background report, a site visit and market and financial information.
No amount of desk research is a substitute for actually meeting a prospective partner in person. If possible, visit their business premises to make sure that you’re happy with how they operate and satisfied that they have the resources they’d need to live up to any agreement you strike.
If it isn’t feasible for you to visit yourself, commissioning a site visit or sending a trusted local contact may be the best way forward. If you take this route, make sure that your person on the ground knows exactly what to look out for and the questions to ask.
Once you’ve conducted all your checks, it’s time to formalize the relationship. Business cultures differ greatly from country to country, and you’ll need to figure out when it’s time to move from exploratory talks to discussion of next steps, such as terms of agreement or a contract. A potential partner in Asia may expect to spend more time on relationship building and socializing than an American counterpart, for example. Online research and conversations with local contacts should help you get this right.
It’s often sensible to come to a preliminary understanding with your overseas partner. A “memorandum of understanding,” while not legally binding in most cases, can cover basic details of the relationship, including the nature, scope, and duration of the partnership, and ensures that you’re both on the same page. If you’re going to be the sole provider of goods or services to your partner, or if your partner will be the sole provider of goods or services to you, you’ll also need to draw up an exclusivity agreement. Under an exclusivity agreement, the buyer agrees not to obtain the seller’s goods from anyone else during the length of the contract.
It’s also important to protect your intellectual property (IP) overseas. Patents and trademarks are territorial, so any protection you’ve gained in your home country will not apply once your products cross a border. You can find out how to apply for patents or trademarks in a foreign country by contacting the intellectual property office in the relevant country. You should also agree on IP ownership with your international partner. In general, any IP that you bring to a partnership stays with you, but you should also consider what happens to any assets created during the partnership.
Make sure that you set out expectations and deadlines with your partner clearly from the beginning, and schedule regular catch-ups to confirm that everything’s on track. Put all of this down in writing and get it agreed by both parties.
Ideally, start out with a low-key trial with small volumes of product so that you can test the partnership and process before scaling up. When you start out, it may be a good idea to go with two possible partners and give each of them a portion of the work so that you can compare both companies. If you proceed with just one partner, make sure you have a backup in case things go wrong.
Let’s summarize the process of forging fruitful overseas connections. First, find out if your government helps SMEs searching for international partners. Usually, its trade network will find leads and allow you to register your interest for relevant opportunities. If you meet the criteria, your details will be passed on to the other company.
When it comes to background checks, your government’s international trade department is a good port of call again, and there’s also plenty of research you can do yourself, and companies that can help you conduct international credit checks.
If possible, you’ll then make a site visit. If that’s not possible, is there anyone who could visit on your behalf? And when it comes to formalizing the partnership, consider exclusivity agreements and IP protection, and be sure to set clear expectations and timelines with your international partner. Start with a small test with a small number of products if possible, and consider trialling two providers at the same time to see which one works out best.
With so many resources available, you should be able to find the perfect partners for your export journey. As long as you do your background research thoroughly and set clear expectations from the beginning, these relationships should help you achieve success overseas by bringing vital skills, resources and local knowledge to the table.
When it comes to finding a shipping partner, you should look for a reliable, trusted freight forwarder that can help you comply with all the regulations and manage the risks of exporting with minimal hassle. Shipa Freight tool can help you get started with a quote that will allow you to calculate your landed cost and navigate compliance rules.