Freight Forwarders | Role in Global Commerce

Supply Chain Logistics

Freight forwarders are typically employed to facilitate international transport—both for business and personal use. Freight forwarding entities coordinate the shipment of goods from one destination to another using the services of carriers operating via air freight, ocean freight, road fright, or  railway freight.

The logistics of getting the goods delivered to faraway destinations—especially to foreign markets, is a complex business. It requires the services of outside entities to facilitate the task.

When shipping a product overseas, businesses need to be aware of all the requirements; packing, labeling, documentation, and insurance. Ultimately, it is their goods and their business.

Also, as part of the supply chain management, a business also need to be aware of the items which may be restricted to import in the destination country, OR may be prohibited for export to the import destination. It’s essential that all of these documents are provided in order to ensure that your goods reach your customer without any issues arising.

A freight forwarder deals with all these essential tasks related to the entire shipping process: preparing the cargo for shipment, warehousing, tracking the transportation, booking of cargo space on carriers, verifying the documents and exporting them, negotiating the best freight charges, handling cargo insurance, and – if needed, filing for insurance claims, and clearing customs to get the product delivered from its origin to destination.

Active and established Freight Forwarders—based on their expectations, sub-lease space from the carriers; shipping lines, airlines, truck companies etc. They also maintain advance contracts with the customs brokers, warehouses, and other logistics parties.

Experienced freight forwarders have established relationships with their business partners; shipping lines, customs brokers, truck companies, warehouses, dedicated printing companies, and many other businesses that a shipper might need.  They provide their customers with all these services necessary to move the products from origin to destination using their network of service providers.

Through these special agreements and contacts with all the associated service providers, they have the advantage to obtain the best deals for their clients and to make the entire process of export/shipping smooth and seamless.

International freight forwarders, acting as agents for exporters / shippers, can also move cargo from “dock-to-door”, providing several significant services like:

• Arranging for and tracking of freight from a domestic and international perspective
• Arranging for and tracking inland transportation
• Preparation of shipping and export documents
• Warehousing
• Booking cargo space
• Negotiating freight charges
• Freight consolidation
• Cargo insurance

Freight forwarding companies specialize in taking care of the whole process for their shippers; from the storage to the shipping of their merchandise. They act as an agent and intermediary of the business (shipper) in working out the most economical, reliable and fastest route and engaging the services of the most cost effective transportation services.

The services of Freight forwarders are quite useful in making the process of import-export of goods much less stressful. Reputable and established Freight forwarders are well versed in the entire process of supply chain. Their responsibility include providing help and support to their customers/shipper at all stages—from the packaging and loading of goods to delivery to the destination point.

In this process they take care of:

• Packing
• Insurance
• International export and import documentation
• Customs Clearance
• Storage, and
• Inventory management

Global Shipping || Making sure all the paperwork is up to date

A Freight Forwarder, as part of its normal duty, will review— and advise the customer, the documents including the commercial invoice, shipper’s export declaration, bill of lading, and any other documents required by the carrier, country of export/import, or transshipment ports.

But, ultimately, it is the task for the business (shipper) to make sure that before assigning the goods to the freight forwarder all of the paperwork for transporting the goods is complete and up to date. The freight company will be able to help with the task, but it’s pertinent to reduce the risk of the goods not being released from customs, or the bank refusing to release the funds—neither of which would be a desirable scenario for the business.

The key stages of freight forwarding process

The process of freight forwarding can be broken down into many of its segments. We can summarize them all into six main freight forwarding processes:

• Haulage of Goods for Export—Transfer of Goods from its source of origin to the freight forwarders’ warehouse.
• Export Customs Clearance—Get the clearance for the Goods to leave the country of origin.
• Origin Handling—The unloading of Goods from the shipping containers, inspection and validation of the goods against the booking documents.
• Import Destination Customs Clearance—Work with the import destination customs authorities and get the cargo cleared.
• Destination Handling—The storage/warehousing/management of cargo once it reaches the destination point.
• Import Haulage —This stage simply involves the transfer of goods/cargo from the import warehouse to its final destination.

Documentation Expected to be Provided by Freight Forwarders

It is understandable that assuming the responsibility of getting the good collected and delivered to its final destination – especially when it involves cross-border shipment, is a complex and big undertaking. In order to keep every aspect of the process properly executed, and well understood by all the involved parties, it essential that the freight forwarder inspect and furnish all the paperwork to its customer, the shipper.

Freight forwarder is expected to provide its customer (shipper) with all of the relevant documents for inspection and inclusion, including:

• Commercial invoice
• Certificate of origin statement
• Inspection certificate
• Bill of Lading contract
• Export license
• Export packing list
• Shippers export declaration document

With all these essential tasks delegated to the freight forwarders, it is a very important to select the right Freight Forwarder for your business needs. Freight forwarder is a trusted partner in your supply chain. An unreliable freight forwarder can easily break the entire supply chain and inflict heavy damages to the business operations.

With such an enormous number of freight forwarders in each and every region—many of them may be lacking in experience and qualifications, the question arises; how to go about choosing the right freight forwarder whom you can trust?

The best suggestion is to check with your suppliers and other business partners what freight forwarders they are already working with. Also, check if a freight forwarder is legitimate or not. You can check the integrity of freight forwarder by inquiring with the banks, trade organizations, and, also, searching online reviews. Deal only with ones who have the essential licenses, certifications, and membership in trade organizations like the International Federation of Freight Forwarders Association (FIATA).

☞A Note of Caution Though:
Freight forwarding companies, despite their best efforts, cannot guaranty the timely transportation and delivery of the goods. Delays often occur due to bad weather, breakdown, port delays or unforeseen route changes. Delays may also occur due to sudden changes in governmental rules and regulations—Consider, for example, the impact Trade Wars on global trade!

In drawing the supply chain logistics, we take into account a number of service providers and business partners include part-suppliers, contract manufacturers, assembly lines operators, freight forwarders, vendors, warehouses, distributors, and, finally, the retailers.

It is always advisable to take the necessary precautions when shipping the goods; whether for export or sale direct to individual customers. Keep the channel of communication open with your business partners and customers. And, have the contingency plans ready, just in case!

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