Logistics Ratings Missing in Ukraine: How a Client Can Distinguish “Cheap” from “Reliable”

Pricing issues in the logistics industry are extremely relevant today. A particularly significant aspect is that an emphasis on “cheap at the start” typically results in a much higher cost of error later. This can manifest as breaches of agreed deadlines, downtime, fines, or loss of clients. That is why Ukraine needs a reliability rating for logistics companies, rather than a price ranking.

What the Market Watches vs. What it Overlooks

One of the key problems facing the modern logistics services market is that the focus is centered on the rate, while a whole range of other factors remains overlooked, namely:

• Risk profile;

• Service discipline;

• Readiness for force majeure;

• Transparency.

Therefore, a selective focus on the price factor becomes the fundamental error in selection, leading to partnerships that ultimately disappoint.

Current Insights into the Logistics Sector

To address this, let’s highlight three key metrics that are most significant for assessing a logistics partner’s reliability:

1. Speed and quality of response to force majeure;

2. Transparency and process control;

3. Company experience and longevity, which serves as evidence of reliability.

In my opinion, it is equally vital to consider scenarios where a low freight rate hides the exclusion of THC (Terminal Handling Charges), local port fees, storage, or free time. Furthermore, vehicle downtime often occurs, fuel surcharges appear, and there are re-issuances of bills of lading or additional certificates that were supposedly agreed upon in advance.

For example: A client saves money at the start but loses both time and money later. Consider a customs clearance case where a competitor offered a 30% cheaper rate for filing a Customs Declaration. However, the “cheapest” broker submitted an incorrect commodity code, forcing the importer to pay an additional 1.5% in duties—amounting to approximately $10,000.

It is also crucial to watch for “red flags” that indicate reliability is unlikely. This includes “guarantees” of transit time and cargo safety. While these factors can be managed with care, they cannot be legally guaranteed.

5 Significant Criteria to Consider When Choosing a Logistics Provider

When asked about selection criteria, I believe you should focus on the following:

• KPIs for maintaining ETD conditions: % of shipments without disruptions (no rollovers, no route changes due to the forwarder’s fault, no critical delays);

• KPIs for maintaining quoted costs: % of shipments without additional unplanned expenses;

• Volume metrics: Not the primary factor, but important to show how the company performs under load;

• Annual volume: (TEU / MT / trucks / charters);

• Client retention rate: (Year-over-year).

Additionally, a global agent network should be added to this list.

Additional Criteria for a Reliable Carrier

Beyond the aforementioned points, you should also consider:

• The carrier’s experience in their specific niche;

• Transit times;

• Availability of their own fleet;

• Recommendations from B2B clients;

• Pricing transparency and a clear breakdown of all services included in the tariff;

• Level of customer service, including 24/7 support, convenient communication channels, and cargo status reporting;

• Ability to offer alternative routes in case of force majeure;

• Capability to provide necessary shipping conditions for specialized cargo (e.g., hazardous materials, etc.).

If you take all these factors into account when choosing a freight forwarder, it will significantly increase the chances of a successful partnership.