What is a freight forwarder?
Freight Forwarders are companies that specialize in all arranging the shipping and logistics of goods from the start to finish of the supply chain. Because the International supply chain involves so many different processes and parties in different countries, freight forwarders specialize in connecting services to streamline freight movements around the world. Freight forwarding companies are experts that have industry experience and understanding of all of the complex transport and logistics arrangements involved in global trade. They will act on the behalf of shippers to arrange services ranging from export documentation, international seafreight charges, customs clearance procedures, import duties/taxes, port handling fees, local trucking and marine insurance.
What services do freight forwarders provide?
Basically, freight forwarders will provide a wide range of services along the supply chain that will depend on your specific requirements. Some companies specialize as ocean freight forwarders or as air freight forwarders, or both. Their freight forwarding service will cover:
- Export and Import customs clearance logments
- Intermodal transport options – from road, rail, air and sea
- Trucking container deliveries from port to door
- Verified Gross Mass – Full Container weighing and certification
- HS Code classification, import duties and taxes
- Export documentation
- International sea freight charges
- Port service handling charges
- Quarantine / Fumigation services
- Marine insurance cover
- Agents / office network in countries around the world
- Specialized cargo movements
- Other 3rd party services
Why is it important to choose the right International Freight Forwarder for your business?
When products are shipped Internationally there are so many important processes that are involved to get goods delivered through to end customers. Because of this, freight forwarders have access to a broad network of logistics providers along the supply chain. This allows them to connect services between integrated modes of transport, from road, sea, rail and air. They will have existing relationships with trucking companies, port services, International shipping lines, customs agents and marine insurance brokers around the world.
Think of your freight forwarder as a long term business partner. In doing so, you must choose a freight forwarder that understands your exact requirements and that can provide you with the level of service that you require in your business. Very large global forwarding companies normally deal with very large shippers and therefore don’t focus on providing a high level of service to a smaller shippers. On the other hand, small freight forwarders may not have the tools, resources or networks required to service very large volume shippers.
How to request a shipping quote from a freight forwarder.
You should carefully research and speak to multiple freight forwarders to get a feel for the right match for your business. Make sure that you call and speak to a freight manager and give them as much detailed information as you can, including:
- Where you are shipping products to and from (the shipper’s pickup address, the final delivery address)
- The Incoterms® agreed between the buyer and seller
- The mode of transport and shipment type – FCL, LCL, Breakbulk, Airfreight etc.
- How often you will be shipping goods
- What capabilities you have as an importer or exporter
- Any specialized support such as over-sized shipments, hazardous / Dangerous goods cargo etc
Based on the IncoTerm and the details mentioned above, forwarders will send you quotes detailing the list of charges that you will be responsible for. You will find that these quote documents are often confusing and contain a long list of charges and industry jargon. However, make sure that you take the time to understand how the charges work so that you can double check the final invoices in future. Exporters must understand their cost of product plus any additional logistics charges that they have agreed to. Importers must accurately understand the total landed cost of goods by the time they are delivered through to their door.
From there, create a shortlist of forwarders then make sure you meet with someone at that company. It’s best to get someone to meet with you at your premises to thoroughly discuss and understand all of your specific requirements.
Don’t choose freight forwarding companies based on price.
In short, moving freight around the world is a complex process. It involves many different procedures which can often go wrong and cause issues throughout the supply chain. If you choose the cheapest freight forwarding service you will not receive the level of service that you need and their team will often lack industry experience and knowledge on how to solve these problems quickly. Because of this, it’s worth having a good long term relationship with your freight forwarder and pay a fair price. Choosing a freight forwarding service based on the cheapest price will cost your business more in the long run.
Some important questions to ask your freight forwarder.
- Who will be handling the shipments from start to finish? Do you deal with a different person in sales, operations and customs clearance?
- If there is a problem with a shipment, who will be the person responsible for fixing any issues? Will you have direct contact with them?
- Do they have an in-house customs clearance broker? It’s important that you can speak to a clearance broker directly 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 provide a login portal where you can track the status of your shipments? Today some online freight forwarding companies such as Flexport, Freightos and FreightHub provide a high level of tracking through online tracking and communication portals. Flexport provide shippers with a dashboard to access important shipping information.
A typical shipping process when dealing with a freight forwarder
Transferring shipping documents is an essential part of the import/export process. There are are many parties involved that need to quickly and accurately communicate important documents and information. This article shows a typical process of exchanging shipping documentation between exporters, importers and freight forwarders.
Embracing Technological Advancements in Freight Forwarding
In the age of digital transformation, the freight forwarding industry is not left behind. Modern freight forwarders are leveraging technology to offer more efficient, transparent, and customer-centric services. From real-time tracking systems to automated documentation processes, technology is reshaping the way freight forwarders operate. For businesses, this means quicker response times, more accurate shipment tracking, and a reduction in paperwork. As you evaluate potential freight forwarders, it’s essential to consider their technological capabilities. Partnering with a forwarder that embraces technology can provide a competitive edge, ensuring that your goods are not only transported efficiently but also with the highest level of transparency and accountability.
Are you involved in Global Trade?
Our team created IncoDocs to make global trade easy. We’re proud to allow companies in over 100 countries to streamline their shipping document process. Try it for yourself today. If you need more information speak to one of our trade specialists, we will be happy to answer any of your questions.
FAQ about Freight Forwarders
How has technology impacted the services offered by freight forwarders?
Technology has introduced real-time tracking, automated documentation, and improved communication channels, making freight forwarding more efficient and transparent.
What’s the difference between a freight forwarder and a shipping agent?
Both a freight forwarder and a shipping agent are involved in the movement of goods. However, their roles differ. A freight forwarder oversees the complete process of shipping, ensuring goods get from one point to another. On the other hand, a shipping agent acts on behalf of the ship owner, mainly focusing on representing their interests at specific ports.
How do freight forwarders ensure the safety and security of goods?
They leverage advanced tracking systems, partner with reliable carriers, and often offer insurance options to protect against potential losses.
Can a freight forwarder help with customs clearance?
Yes, many freight forwarders offer customs brokerage services, assisting businesses in navigating customs regulations and ensuring smooth clearance of goods.
How do I know if a freight forwarder is reputable?
Look for industry certifications, read customer reviews, and check their experience in handling shipments similar to yours.
Do freight forwarders handle shipments of any size?
Most freight forwarders can manage shipments of varying sizes, from small parcels to large containers, but it’s essential to discuss your specific needs with them.
