So you have a product and you have a wholesaler or other type of customer who wants your product. But their location is thousands of miles away from where you are located. What do you do next? You know that it’s easy to send small packages from point to point, but you want to send goods that may fill several containers.
Freight forwarders are an essential part of any supply chain for the importing and exporting of goods. They provide services that enable the transportation of your goods to their final destination.
What Does a Freight Forwarder Do?
Freight forwarders do not actually operate any vehicles or vessels or other transport modes. What they do is identify modes and services that will get your goods to their destination in the most efficient way possible.
Your freight forwarder will look at what your needs are, whether you have any special requirements – such as a cold chain – where your goods are coming from and going to, and what timeframes exist.
They will then look at what modes will best fit your needs; perhaps air freight if the delivery is very time sensitive or ocean freight in other cases. As well as organizing all the transportation steps, including where there are several steps in the delivery chain. They also take care of all the necessary documentation requirements if needed. This includes all permits, shipper’s export declaration, bills of lading and forms for customs. This removes a major cause of stress for you as the supplier.
What are the Main Stages of Freight Forwarding?
While the entire process of freight forwarding may appear a complicated one, we can break it down into six easy to understand steps.
- Haulage. Where any goods are moved from your factory (or warehouse) to the freight forwarder’s warehouse.
- Export Clearance. Making sure that all documents are prepared and are in order. This includes bills of lading, commercial invoices and customs forms.
- Destination handling. The unloading of your goods at destination port, the goods being inspected and checked against relevant documents.
- Customs clearance. Goods checked by customs at destination and identification and application of any fees and charges.
- Import haulage. Your freight forwarder – or their partner in that country – accepting the goods and moving them to their import warehouse.
- Destination haulage. Goods moved from import warehouse to final destination such as wholesaler’s warehouse.
Do I Have to Use a Freight Forwarder?
Strictly speaking, no. You could organize the steps yourself, cope with the pile of paperwork required, and coordinate between the different companies who will carry out each step. But just as it sounds, that’s not a particularly easy process, especially for someone who has no experience or knowledge of the industry.
Using a freight forwarder removes that burden. Their knowledge offers flexibility and can help ensure that your goods are delivered in a timely manner. With years of experience in international freight, they can react to changes and new information and make changes where needed. Various issues can affect transport modes and routes such as inclement weather causing delays. They can react to this and change mode or route if needed.
Freight forwarder companies have built working relationships and networks over many years and offer the most cost-effective solutions for any form of freight shipping. They can negotiate good terms on your behalf. Freight forwarders typically provide cargo insurance too, so an extra level of protection is added to your shipment.
Paperwork can be the most stressful area when it comes to importing and exporting goods. One mistake on a form means that you may have to start again, and if there are mistakes on forms when they arrive at the destination port, then those problems are multiplied.
A good freight forwarding service removes those complications. They have established relationships with many other components of the supply chain and have experience of ensuring that all documentation is correctly filled out.
The Various Costs of Freight Forwarding
There are a number of factors that are going to affect the costs of shipping your goods to their destination port.
- Where the goods are coming from or going to. If either – or both – of these are less commonly used ports, then capacity will be lower and this will drive up costs.
- Fluctuating fuel charges. Freight is affected by changes to fuel prices just as we can be. If there are any significant changes to fuel costs, then this could affect your final price.
- Seasonal effects. This can be effects caused by seasonal weather, such as bad weather delaying ships, or it can be market seasons, such as there being low capacity in the months preceding the holiday season.
- Fees. As with prices in any marketplace, the fees in different ports may change at short notice. When this happens, it may be reflected in your costs.
- Currency. Dollars are nearly always used in international business and transactions. As currency markets can change on a daily basis, any changes may add to your freight charges.
There Are So Many Companies: How Do I Choose?
Some initial research can help choose the best freight forwarder to suit your needs. Make a list of what your requirements are then look at the websites of companies you have identified as potential providers. If you can’t find an answer on their website, contact them to ask questions.
- Needs. What sort of goods are you shipping? Do those goods need specialized care such as cold chain? Where are your goods leaving from and going to? Can the company you are looking at fulfil these needs?
- Reviews. Look to see if the companies you are considering have positive testimonials. If you know of businesses who have used that company, ask how their experience was.
- Legal responsibilities. Much of a forwarder’s legal responsibilities will be stated on their website as well as in any contract you sign. Liability can cover many aspects of the service.
- Stability. Make sure your forwarder is financially stable and that they hold the required – by law in the U.S. – freight broker’s bond.
- Professional associations. Check to see what organizations your forwarder is a member of.
- Customer service. Communication is key to any good business relationship. Look at how initial contact went. How many people did you need to speak to in order to get answers? How quick was the company’s response? The way the company deals with initial contact can tell you a lot about how they will deal with you later in the relationship.
Do not be afraid to ask questions. You may be entrusting a large part of your business to this company so you need to know how efficient they are and how they will deal with any problems that occur.
Competent transportation services are an essential and integral part of any company who plans on doing international business or national business over distances. Moving goods is not just a question of phoning a shipping company; it can involve multiple transport modes and routes as well as lots of complicated paperwork. Finding a good freight forwarding company can make the whole transportation process easier and more cost-effective.
Asiana USA have been providing high quality logistics and freight forwarding solutions for over 30 years, including air and ocean freight solutions. With offices in several countries, we offer exceptional customer service and efficient logistics service. If you have an inquiry about any of our services, give us a call on 855-500-1808.