What is Freight Forwarding?
Freight forwarding, in simple words, is the service used by shippers for arranging their freight shipments. Besides, a freight forwarder is an expert who has complete knowledge about the end-to-end shipping process, and it's working. Well, they are similar to travel agents offering services for flights.
Besides, freight forwarders come in different shapes and sizes. These include small forwarders who are essentially involved with trucking companies and brokers. On the other hand, some specialize as air freight shipments or ocean freight shipments or an integrated logistics solution.
Advantages of Choosing a Freight Forwarder
Freight forwarders manage almost the entire work from preparing paperwork, bookings, and arrangement of payments for every shipment sector. Here are a few of the works conducted by Freight forwarders. Thus, it is essential to choose the best freight forwarders. These include:
- They work on behalf of parties involved in shipments, cargo carriers.
- Help in providing customs brokerage service, which includes carrying out both clearing and forwarding duties.
- They help in troubleshooting as and when needed.
Why is it important to pick the correct International Freight Forwarder for your business?
A list of processes is involved in the international shipping. These processes are full of hassle and to make sure that it becomes a cup of cake, freight forwarders gets into picture. They have access to a broad network of logistics providers along with the availability chain. They have permissions to attach services between integrated modes of all the possible transports which includes road mode, sea mode, rail mode, and air mode. They have a positive and healthy relationship with trucking companies, port services, International shipping lines, customs agents and marine insurance brokers round the world.
The freight forwarders act as a long-term business partner. So, it is very important to choose a freight forwarder which understands your business requirements and fulfil those requirements accordingly. Global forwarding companies deals with large shippers and don’t focus on providing a high level of services to a small shipper. On a contrary small forwarder my not be having the right quality of tools and resources to handle the large shippers.
How to Choose a Best freight forwarder?
So, now that it is clear who is a freight forwarder and its advantages, let's now understand how to find a freight forwarder. Read below:
Research about the sector/industryBefore choosing a freight forwarder, you must be completely abreast about what a forwarder can do and what not. For this, it is recommended to read different blogs, industry terms, international treaties, and regulations required for shipments.
Know about your internal requirementsIt includes knowing specifically about what are your needs. Herein, begin by understanding the mode of transport you wish to choose, what are the specific services you are looking for, the volume of shipment you plan to ship, the Incoterms on which you wish to ship and any specialized support you look forward from your freight forwarder.
Do they have the right experience?When choosing the best freight forwarder, having experience is an important criterion that counts. For example, if you are dealing with the work of import and export customs, it is necessary your freight forwarder has the right knowledge of navigating laws and regulations both in origin and destination. Besides, ensure they have the perfect knowledge of dealing with different cargo types will help transport goods safely.
Have a transparent proper pricing structureIt is necessary that the freight forwarder you choose offer a transparent pricing structure. For example, if you are raising a request for booking your space. Later you find you are charged a higher price than what is initially negotiated. Herein, ensure to choose freight forwarders who offer complete transparency in pricing without any ambiguity as many freight forwarders charge brokerage fees or fuel surcharges. In order to get a perfect transport pricing, here is the list of information that one must have while requesting a quote from your freight forwarder:
- Your shipping origin and destination place (the shipper’s pickup address, the ultimate delivery address)
- The Incoterms agreed between the customer and seller
- The mode of transport and shipment type (FCL, LCL, Break-bulk, Airfreight etc.)
- The consistency of your shipping
- What capabilities you've got as an importer or exporter
- Any specialized support like over-sized shipments, hazardous / Dangerous goods cargo etc
Do they offer cargo insurance?The most important to look out for when choosing a freight forwarder is ensuring if they offer cargo insurance. Cargo insurance not only offers peace but also ensures risk reduction. It covers all the essential covers, including shipping by air, sea, or land against possible loss or damage. Thus, when finding the best freight forwarder, do not forget to understand if they offer any specific cargo insurance depending on your needs covering the key issues.
Do they offer the right services for your shipment needs?It is essential to understand if your freight forwarder provides the necessary document management and 3PL services. It includes having a general understanding of what documents are required. Are they able to offer the following services:
- Obtaining necessary certificates (inspection, insurance, etc.)
- Preparation and review of documents
- Making amendments to errors in documents
- Assistance in custom clearance
- Offering shipping logistics services
- Finding the right freight insurance cover
- Making payments
- Negotiation of freight rates
- Building quotations for export and import
- Finding shipment routes
- Arrangement of packing and loading
A Network of agents in your destination countryIt is a vital criterion for any of the shipments, including DAP, DDP, or DDU. Lookout for freight forwarders who have a good network with agents in the destination country to know about situations like customs issues, port strike, etc. As a result of this, it will assist you in carrying out the entire shipment without much trouble.
Choosing the right freight forwarder helps you gain complete guidance and help you manage a smooth shipping process. Thus, ensure research and choose the best freight forwarder who offers you a perfect Bon Voyage of your shipments to its destination.
Look out for freight forwarders who are digitally equippedDigital freight forwarders (DFFs) use a digital platform to provide a wider variety of logisticsservices.DFFs construct their core value proposition around a seamless user experience of shipping items from one point to another when aggregating data with a single user interface on one platform. At the same time, manual procedures and paperwork can be replaced by instant price quotes, quick and standardized by DFFs.
Having a digital freight forwarder as logistics partner enables exporter/importers to set them self-free from day to day hassles of managing logistics and help in improving the visibility in supply chain. One single platform for end to end logistics is a great approach built by digital freight forwarders.
Some important questions you should ask before choosing a freight forwarder.
- Who are handling the shipments from start to finish? Does one cater to a different person in sales, operations and customs clearance?
- If there's an issue with a shipment, who will be responsible for fixing any issues? Do you've a direct contact with them?
- Do they need an in-house customs clearance broker? It’s important that you simply can speak to a clearance broker in order to clear up any questions around HS codes, tariff classification etc.
- What level of shipment tracking, service and communications will you get from their side? Some freight forwarders are terrible at keeping shippers updated with status of shipments, delays or problems.
- Do they supply a login portal where you'll track the status of your shipments? Today some online freight forwarding companies like Boxnbiz, Flexport, FreightOS and FreightHub provide a high level of tracking through online tracking and communication portals.
Pro Tip on How to Choose a Freight Forwarder:
“Don’t choose freight forwarding companies just by seeing their price.”
‘In short, moving freight round the world could be a complex process. It involves many alternative procedures which may often go wrong and cause issues throughout the availability chain. If you decide on the most affordable freight forwarding service, you'll not receive the extent of service that you just need and their team will often lack industry experience and knowledge on a way to solve these problems quickly. Thanks to this, it’s worth having an honest future relationship along with your freight forwarder and pay a good price. Choosing a freight forwarding service supported the most affordable price will cost your business more within the long term.’