What is freight forwarding?
In this article, we’ll take a deep dive into what freight forwarders actually do and work, how their costs are calculated, and where you can find a reputable forwarder if you decide you want some help with your freight.
What is a freight forwarder?
A freight forwarder is an individual (or more likely a company) who arranges the transportation of goods from one place to another.
While it sounds simple, there’s actually a lot going on behind the scenes to ensure the product delivery you expect can safely get from your supplier to your office. However, a good freight forwarder will make the process seem seamless, efficient and simple.
It is helpful to know that there are freight forwarders and customs brokers in many markets. Customs brokers typically handle the import and export aspects of international deliveries, including commodity codes and EORI requirements – and freight forwarders are logistics experts. However, many freight forwarders can also act as customs brokers and take care of the end-to-end process of transporting your goods, including logistics and customs requirements.
What does a freight forwarder do?
Here is a brief breakdown of a day in the life of a freight forwarder:
Shipping Tracking
Freight forwarders use a Transportation Management System (TMS) to maintain transparent visibility at every stage of the cargo voyage.
customs clearance
This critical transshipment requires a special license – a customs brokerage license. Licensed brokers are the only ones qualified to manage and submit the extensive documentation required to complete the import/export process.
Warehousing
Some freight forwarders may have their own warehouse to store the shipper’s merchandise (or parts of it), but in most cases your freight forwarder will provide services arranged in a conveniently located affiliate owned and operated warehouse to store.
negotiation
Haggling with carriers for cost-effective shipping is no easy task. The art of this deal entails appealing to the interests of the carrier by balancing the pros and cons of your cargo type, time flexibility, credit status, space/tonnage requirements, etc.
cargo hold scheduling
Savvy coordination and scheduling of cargo space is a more specific part of the freight forwarder’s skill set. If you hire a freight forwarder to manage the logistics, they will have the opportunity to showcase their talents. A thoughtful planner is needed to determine whether it is profitable to consolidate cargo, ensure timely sailing, and weigh the viability of intermodal options. Cargo scheduling is the “logistics” of logistics.
Consolidated Freight
A freight forwarder may have several clients, all of whom need to transport cargo that does not require the use of an entire container. LCL for Less Container Load (LCL) shipments is a service offered by freight forwarders in which multiple smaller consignments are booked on the same container. In these cases, shipping costs will be shared among all participating customers based on the space requirements of the cargo.Provide cargo insurance
A freight forwarder can provide you with a cargo insurance policy, also known as cargo insurance. The purpose of cargo insurance is to compensate the recipient for losses in the event that the cargo is damaged or stolen in transit.
Note: Cargo insurance does not cover any tangential losses related to incitement events. For example, if a container falls off a truck and damages nearby structures, cargo insurance will cover the financial loss to the contents of the container, but not the financial burden of damage to nearby structures.
Is a freight forwarder right for me?
If you’re new to importing, working with suppliers in areas you don’t have good contact with, or just want to make the importing process as smooth as possible, using a freight forwarder might be a wise plan.
As you become more familiar with your suppliers’ import and export processes, you may feel more confident going it alone if you can build a network of local shipping companies, ocean or air freight suppliers.
It’s good to know that in some markets, you may choose to hire a customs broker. They will handle customs documents but not shipping logistics. This may be a consideration if you have established good connections with your local shipping company but are unsure of the customs regulations associated with your shipment.
How to find a freight forwarder
The world’s largest freight forwarders are DHL, Kuehne + Nagel, DB Schenker, DSV and Sinotrans. These are good options if you want to know the market price you can expect to pay.
If you want to start your business in the big market of China, TJ-chinafreight will be the right choice, with more than 20 years of experienced staff carrying out the mission of “We provide faster, safer and easier”, which makes TJ can provide customers with high-quality, professional and fast logistics solutions. Backed by a global network of selected partners, TJ’s services cover more than 100 countries.
The company cooperates closely with major shipping companies (EMC COSCO MSC ZIM) to provide customers with affordable and appropriate price services.
Life is hectic for any entrepreneur – especially when you work in importing and exporting and need to deal with global suppliers. Using a freight forwarder can take the load off your shoulders because you’ll know that experts have taken care of the shipping, shipping and even the customs process for your cargo. You can then start growing your business again, making sure your shipments are handled properly.
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