When you have goods or products you need to get from your factory or storage facility to an end user, then you will likely call on the services of a freight forwarder. They are the people who organize the transportation of goods globally though they do not actually operate any type of vehicles or vessels themselves (and are often known as NVOCCs – non-vessel operating common carriers).
They are an essential component of the shipping process and will usually organize multiple steps in the logistics chain, especially when it comes to international freight where more than one transport mode is in play.
Benefits of using a freight forwarder
There can be several advantages in using a freight forwarder, especially for new businesses with minimal experience of shipping.
- High levels of flexibility. Transportation, especially on a global scale, can be fast moving and unrelentless. With so many factors affecting the industry, having the flexibility to receive and act on new information can make a massive difference to time frames, margins, and productivity. Working with an experienced freight forward allows you an overview and concise input to aid when decisions need to be made or changed. For new companies, the experience of a freight forwarder can help identify the ideal – and low-risk- way of choosing modes and routes.
- The transportation process is susceptible to problems. Whether weather affecting ocean freight or air freight or traffic problems affecting road routes. The big factor to think about with freight forwarders is experience. They know how to solve issues as and when they arise, something that can be vital when there are deadlines involved.
- Cost-effective solutions. Because freight forwarders deal with so many businesses as well as modes and routes, they can save you money on any shipping costs. Many of their projects involve bulk shipping and they have long established relationships with multiple carriers, so they are in the best position to negotiate favorable terms with those carriers.
- Removing the hassle. One of the most complicated areas of import and export is the documentation. Permits, customs forms, etc. A freight forwarder can take care of all the tricky documentation so that you don’t have to. And that aspect of dealing with any required documents can cover origin, destination, and any transit or transfer points in the journey.
How to Choose a Good Freight Forwarder
Like any business sector, there are multiple choices of freight forwarders and logistics companies out there. Some of them offer general services, some offer specialized services, some operate globally, while others operate nationally.
Knowing which one best suits your business needs is a crucial decision for your supply chain. There are some steps you can take before you contact a freight forwarder and questions you can ask once you contact them.
- Identify your needs. What are you shipping? What is the point of origin and final destination? Do you have any specialized requirements, for example, do you need a cold chain and competent cold chain management? Are you working to a tight timeframe and deadlines? Having all your specific needs identified and listed will make choosing your forwarder easier.
- Research. Now you know all your needs, it is time to trawl through the websites of forwarders to see which ones meet your needs. It is also worth looking for reviews and testimonials to see what sort of service they provide. You can even ask the company direct if they can provide references.
- Look at what the forwarder’s legal responsibilities are. Some information will be on their website, other information you can request by email, or you can also look at online resources to get an idea of how different laws work in the industry.
- Financial stability. Ensure the forwarder you choose is financially stable. After all, if the company went bust while your goods are in transit, you want to know that delivery will still happen. Legitimate forwarders are required to hold a freight broker’s bond. Holding one of these bonds is recognition that the company is financially stable.
- Questions. Do not be afraid to ask as many questions as you feel you need to. You are entrusting a major part of your business to this forwarder, so you want to know they can do the job properly. Do they have an established network that includes carriers and other forwarders or brokers? Do they have experience in forwarding your particular type of cargo? Getting positive answers to your questions means you can choose with confidence.
- Organizations. As well as any established network, inquire whether the forwarder is a member of any professional trade associations, such as the National Customs Brokers & Forwarders Association of America, Inc., (NCBFAA).
- How good is their customer service? While first impressions may tell you that they fit your requirements, how good is their communications? How many different people did you have to deal with?
Six Key Stages in Freight Forwarding
- Haulage. Moving any goods from point of origin such as a factory to the freight forwarder’s warehouse.
- Export clearance. Ensuring all documents are in order and obtaining clearance for the goods to leave the country.
- Origin handling. Point at which any freight is unloaded and inspected and checked against all booking documents.
- Import Clearance. Customs at destination port checking paperwork and applying any relevant fees.
- Destination haulage. Acceptance by forwarder – or forwarder’s agent – at destination port and haulage to import warehouse.
- Final haulage. Last stage of transport. All goods transported from import warehouse to final destination.
What Affects Sea Freight Costs?
There are several factors regularly affecting global freight. For sea freight, which carries the largest freight around the world, the most common are:
- Destination or Origin. If either – or both – of these are less common destinations, then costs will be higher as there will be lower capacity. And with the most common destinations, you may face capacity issues.
- Fuel costs. We all see price changes at our local gas station and it is no different for bunker fuel. If changes in fuel prices occur, you may see fuel surcharges added to your invoice.
- Seasons. There are two aspects to seasonal effects. The first of those is capacity demand at certain times of year, for example, the run up to Christmas. The second is to do with weather. In very hot weather, the costs for cold chain freight may rise, and in bad weather, smaller ships may not be able to sail.
- Changes in fees. If your freight is going via several ports or to multiple destinations, there may be changes in fees or service charges that you may find adds to your costs.
- Currency fluctuations. Although the dollar is the standard currency for international transactions, daily changes to currency values may affect freight charges.
- Load. Most sea freight is charged according to weight or measure. If you are not shipping a full container, you will likely still be charged for a full one. It is always worth trying to share a container or to fill one.
Deciding on which of the many freight forwarding companies best suits your needs may be a difficult decision and may take a lot of initial groundwork and research. But that initial period of checking a company can meet your needs can pay off dividends in the long-term. Finding a competent freight forwarder to work with can not only ensure your goods are safely delivered, it can also reduce a major part of your workload.
At Asiana USA, we are experts in international freight forwarding. We offer the very highest standards of customer service and we always keep up to date on any changes in regulations. We also have an established strong network of fellow logistics companies and carriers to ensure your freight forwarding experience is worry-free. You can call us on 855-500-1808 to find out more about the services we offer.