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 specialize 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.
How to choose a freight forwarder
So you're ready to choose a freight forwarder - but there are so many in the market offering so many value added services at different prices. This blog post will outline some tips to help you choose the right freight forwarder for your business.
1. List your requirements
The first step to selecting the right freight forwarder is to know your own requirements. What business are you in? What sort of freight do you need to transport? What are the distances required? What mode of transport - sea, air, rail, road, or any other? What volume will you be shipping at? Determining these requirements will help you be prepared before reaching out to a freight forwarder.
2. Research your options
There are many freight forwarders in the market, consider narrowing your search based on your requirements, and research what freight forwarders can do for you. Here are a few ideas:
- Read up and understand industry terms
- Read various blogs to understand what you're responsible for and what they're responsible for
- Put together a checklist, including volume, time frame, speed of delivery, special packaging requirements, etc.
When considering between freight forwarders, price should not be your only factor. Several other factors are also very important in choosing a great freight forwarder for your business:
Do they have experience with your type of cargo? There are many different types of cargo – everything from garments or machinery to chemicals or even hazardous waste. It’s essential that the freight forwarder you settle on has experience with the type of goods that you’re exporting. Once your cargo ships, it’s out of your control. That’s why you want your freight forwarder to know how to handle your products, and to be able to anticipate any potential problems along the way.
Can they handle multiple types of shipments? You may be considering importing using ocean freight from China, or from USA or Canada using air freight, or export to UAE. Do they have the experience, know-how, and partners around the world to handle your variety of shipments? How extensive is their network? A robust international network is going to facilitate your cargo getting where it needs to go. The biggest companies will have contacts all over the world. Just remember – all you need to focus on is the country you are shipping to. If you’re preparing freight for export to Australia, it doesn’t matter how many contacts a particular forwarder has in, say, China. This may sound painfully obvious, but far too many inexperienced exporters don’t stress the importance of networking. Where do their services end? Some freight forwarders only see to the air or sea portion of your cargo’s journey. You might save a bit of money on their services in this case, but you’ll quickly make up for that in extra charges and headaches when you have to arrange onward shipping once the shipments reaches the destination country. Don’t be afraid to ask if they can arrange the final leg of your cargo’s journey – be it by road or rail.
How do they manage their account? This relates to who will be your point of contact / account manager for submitting documents, coordinating the shipment and who to ask for when there is a problem. It can be a dedicated person or a team that handles your account. Point of service is very important when irregularities exist - you want someone who you can trust to manage these problems for you. What freight management systems are available to you? Visibility is important - as an importer, you may want to know where your cargo is at times. A highly visible freight management system will help you stay at ease about where your shipments are and help you plan for its arrival. Digital technology can provide excellent value added to the traditional methods of freight management.
3. Reach out for quotes and questions
After you have made a checklist and narrowed down some options, it's time to reach out to some freight forwarders and ask them some questions. It's a personal business, so don't be alarmed if they ask for additional information, such as your company name or your type of shipments. Have a conversation, identify your needs, and assess each freight forwarder's suitability based on your requirements. Remember, it's a long-term relationship, so also consider the soft skills that they have.
This blog post is part of the Bismillah Logistics' Basics to Freight Forwarding series. Previously, we covered the definition of a freight forwarder and what they do. In the next blog post, we will be exploring Ecommerce Importing. In the meantime, don't forget to subscribe to our blog for other news and updates! Bismillah Logistics is Pakistan’s best logistics company in Lahore located in Pakistan and mainly in Lahore. We deliver digital-focused freight forwarding services such as Pakistan customs parcel tracking, parcel delivery box, and comprehensive ocean, air, and road freight solutions. For cost-competitive and innovative freight forwarding solutions, please click the link below to contact a Whale Logistics Freight Specialist for a free consultation.
Courtesy: Best logistics company in Pakistan
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