Importing and exporting goods and materials is incredibly lucrative and important for the growth of businesses across many industries. For a growing business expanding its customer base globally, the complexity of logistics, paperwork and customs can be extremely daunting.
Luckily, freight forwarders can act as a middleman or intermediary between the shipper and transportation services. They liase with various carriers, negotiate the best prices and help to identify the most economical, reliable and fastest route for shipping. Using a freight forwarder can be incredibly cost-effective for a business. Due to the high volume of goods they ship, freight forwarders can negotiate lower prices and consolidate shipments between different businesses to lower the cost. The use of a freight forwarder allows for flexibility and versatility as they have the ability and resources to handle unforeseen circumstances such as rerouted shipments or delays at sea. Ensuring that goods are delivered on time is incredibly important for customer satisfaction. Late delivery can cause unnecessary grief and can impact the overall success of your business. Utilising the services of a freight forwarder allows business owners to sit back and focus on their bottom line without the added stress of logistics.
Step 1 – Export Haulage
The first step in the freight forwarding process is the movement of items from the shipper’s location to the freight forwarder's warehouse, this process is called export haulage.
Step 2 – Items Checkpoint
Following the export haulage stage, freight forwarders will conduct an inspection to ensure that all goods were transported without incident and are accounted for.
Step 3 – Export Customs Clearance
Prior to items being shipped, they require clearance from the country of origin. This step requires a custom broker to submit details about the cargo and any supporting documents.
Step 4 – Import Customs Clearance
Once the shipment arrives, customs in the destination country are required to check the import documents.
Step 5 – Destination Arrival and Handling
This step is a little complex and involves several processes and procedures. The freight forwarder will ensure all documents were received, check for any outstanding carrier bills and check that all the information is correct. Once the documentation is looked over, the cargo will be inspected and sorted based on the client’s needs.
Step 6 – Import Haulage
This stage is almost identical to step 1, whereby the cargo is transported from the warehouse to the destination of the intended receiver. This process can be facilitated by freight forwarders, or alternatively, the consignee can choose to collect the cargo themselves.
Are you importing or exporting goods? Power Customs Services can make logistics easy by handling every aspect of transportation and delivery. We provide services including customs clearance, freight forwarding, air freight, logistics, consultations, customs broker services and international freight forwarding.
Important Things You Need to Know About Freight Forwarding
Freight forwarding is one of the most widely used methods of international transport for both business and personal use. Freight forwarding companies coordinate the shipment of goods from one destination to another using a range of carriers, including air freight, ocean freight, road freight and, in some cases, railway freight. The process of freight forwarding might seem daunting, especially if you’re not familiar with the process of freight shipping, but these thirteen facts you need to know about freight forwarding will help you through the process.
1. What is a freight forwarder?
A freight forwarder is responsible for the transportation of goods between one destination and another. Freight forwarding companies specialise in arranging the whole process for their shippers, from the storage to the shipping of their merchandise. They act as an intermediary between the shipper and transportation services, liaising with various carriers to negotiate on price and decide on the most economical, reliable and fastest route.
2. A hassle-free way to import and export goods.
Using a freight forwarder to import and export goods can make the whole process much less stressful. Extremely knowledgeable in the elements of supply chain, freight forwarders can assist on all levels, from the packing and warehouse stages to the customs procedure, taking some of the pressure off you.
3. Freight forwarders provide a range of services
Freight forwarders can assist with the supply chain process on multiple levels including:
- Customs Clearance
- International export and import documentation
- Insurance
- Packing
- Storage
- Inventory management
4. Advantageous to your business
Using a freight forwarding company for the transportation of goods to your consumer can be advantageous to your business in many ways. Using their knowledge and expertise, freight forwarders will ensure that your goods will arrive at the correct destination on time and save you money in the process, compared to doing it alone.
5. They are not responsible for shipping delays
Freight forwarding companies are not responsible for delays in shipping. These delays often occur due to bad weather, breakdown, port delays or unforeseen route changes. Although shipping delays can be frustrating, it is important to remember that it is out of your freight forwarding company’s hands and that they’re trying to resolve it as quickly as possible.
6. It’s important to maintain a good relationship with your freight forwarder
Your freight forwarder is in charge of your precious cargo, so it’s important that you establish a good working relationship with them. You want to ensure that you choose a company that you can trust and rely on, as well as one with impeccable customer service to ensure that your cargo shipments arrive safely and on time.
7. You need to make sure your paperwork is up to date
Before leaving your goods in the hands of your freight forwarder, you need to ensure that all of the paperwork for transporting your goods is completed. Your freight company will be able to help you with this, but it’s an incredibly important step to reduce the risk of your items not being released from customs or the bank refusing to release your funds – neither of which would be beneficial to your business.
8. Shipping restrictions apply to certain products
Freight forwarding companies adhere to strict regulations and will not carry certain goods and substances, particularly by air or sea freight. Although the list of prohibited items varies from country to country, freight forwarders are generally restricted on:
- Dangerous Goods (including flammable liquid and toxic items)
- Drugs (prescription and recreational)
- Alcohol
- Batteries
- Perishable items (except for those on special express delivery)
- Sharp objects
9. Ask your freight forwarding company about extra services
Many freight forwarding companies offer extra services for your shipment, so it’s always worth asking them when receiving a quote. These extra services include warehouse storage, cargo insurance, cargo tracking and dangerous goods handling. Even if you don’t require them, it’s always worth bearing these additional services in mind for future reference.
10. There are six key stages of freight forwarding
The freight forwarding process can be broken up into six key stages, including:
- Export haulage – the transfer of goods from its original source to the freight forwarder’s warehouse.
- Export customs clearance – the goods receive clearance to leave its country of origin.
- Origin handling – the unloading, inspection and validation of the cargo against its booking documents.
- Import customs clearance – the customs paperwork for your cargo will be checked by the authorities.
- Destination handling – the handling of cargo once it reaches the destination office, including transfer to the import warehouse.
- Import haulage – the transfer of cargo from the import warehouse to its final destination.
11. Your freight forwarder should provide you with a range of documents
With freight forwarding comes a lot of paperwork, especially when shipping overseas. Your freight forwarder should provide you with all of the relevant documents, including:
- Commercial invoice
- Bill of Lading contract
- Certificate of origin statement
- Inspection certificate
- Export license
- Export packing list
- Shippers export declaration document
- It’s essential that all of these documents are provided in order to ensure that your goods reach your customer without any issues arising.
12. The strength of a freight forwarders’ network is vital
Well-established freight forwarders will have an incredibly strong network of contacts and experience in the business. Not only will this help you to get the best price for shipping your cargo, but it will also ensure that your goods arrive in a timely manner. Experienced freight forwarders will have encountered a multitude of problems along the way, so they’ll be able to quickly and efficiently deal with any issues which may arise as your goods are transported.
13. Does your freight forwarder specialise in a particular cargo type?
Some freight forwarders focus on a specific type of cargo, whereas some other companies accept a variety of goods. Finding a freight forwarder who specialises in what you’re looking to ship is beneficial. Not only will they have a team of specialists in place, but they will also have vast experience in dealing with cargo similar to yours. Doing your research before choosing a logistics company will ensure that your goods get to their final destination in a timely, cost-effective manner.
14. Agree On Terms With Your Supplier
Assuming that you have completed your procurement process, and have sorted out your product, supplier, and is ready to import to Australia, you must then discuss terms with your supplier regarding container delivery. These trade terms are known as Incoterms, where the terms specify the shipping and delivery responsibilities of your supplier as well as your nominated freight forwarder (acting on behalf of you). Depending on your Incoterms, your supplier will pack and load your freight and prepare it for flying or sailing.
15. Cargo Collection
After receiving shipping orders from the shipping line, your freight forwarder should be able to release the shipping orders to your supplier. Information such as the courtyard location to pick up empty containers, date of closing, estimate date of departure of the vessel, bill of lading No. and vessel / voyage No., will be provided to the shipper (you). From there, depending on the Incoterms, the freight forwarder will send their trucking teams to pick up empty containers from the yard, and finish loading your cargo from the supplier factory. They are then transported to the wharf or airline.
Freight charges
It is important that your freight forwarder manages your expectation accordingly. For instance, importers will be liable for certain charges depending on the method of freight. For example, for sea freight, there will be trucking charges, terminal handling charges, document charges, custom clearance charges and seal of the container charges. Further charges may also be included if the container needs to be fumigated, required by a law in Australia that prohibits foreign articles of natural origin. Insurance is also an important expense to consider, as there are many instances where uncontrollable risks have left importers out of pocket.
16. Customs clearance (origin)
Again, depending on your Incoterms, either your supplier or your freight forwarder (acting on your behalf) should clear customs before date of closing, and finish payment of taxes & duties. All exporters in China are required to have an export license from China Customs, and every license has its unique tax & duties code.
After customs is cleared, your container(s) will be loaded on board before dating of departure.
17. Customs clearance (destination)
At destination, the Australian customs then takes over. You will be required to hand over documents such as the bill of lading and purchase order. Australia has a free trade agreement in place with China, therefore if your goods are certified as made in China (Certificate of Origin is required), you may be able to be exempt from duties at the Australian border.
Your nominated freight forwarder will be your point of contact during customs clearance at the Australian border. They should also be able to quickly handle your freight and resolve any problems regarding your cargo should they arise.
18. Demurrage
When your goods are cleared from customs and all duties/taxes are paid, the containers will have 7 days of storage before you are charged demurrage and detention fees. Again, at this stage your freight forwarder should be able to take over and be in charge of transporting your cargo from the yard to your warehouse or nominated place.
19. Unloading & Delivery
The last step is unloading the cargo and delivering to your door. Containers are transported from the wharf to your warehouse or unloading area, where your cargo will be unloaded. The freight forwarder will then return the empty container to the shipping wharf.
Courtesy: Best freight forward services in Lahore
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