A freight forwarder is a person or a company that arranges shipments to and from individuals or organizations. Forwarders do not operate their own vessels, and that is why they are also known as a non-vessel operating common carrier (NVOCC).
Since a forwarder does not have his own vessel, he must contract with a shipping company for the purpose of moving customers’ goods. In fact, he does not claim to be a mover of goods. Rather, he acts as a person or entity that can handle the intricate logistics involved in the process.
At times, Freight Forwarding requires the use of many types of transportation modes in order for goods to be transported from one point to another. For this purpose, the forwarder will contract with several different carriers for transportation.
Take, for example, a case where the forwarder has been hired for the purpose of delivering goods from a factory, to the user in another country.
The forwarder will arrange for the goods to be loaded from the factory premises, transported to the port, and shipped to the destination country. When the goods arrive at the port, the forwarder will again arrange to pick them up from the port, and delivered to the customer’s given address.
The entire procedure involves transportation through many types of carriers at different locations. All of this will be handled by the forwarder.
International shipments can be carried out with the help of international forwarders. They do not only transport your goods, but they also assist in the preparation of all the required documents for the shipment to go through both customs. These documents usually include the commercial invoice, export license, and the bill of lading.
Working with Freight Forwarders
There are many businesses that work with freight forwarders in order to carry out their shipments in an organized and efficient manner. Forwarders are able to add great value to the business simply by taking care of the transportation procedure adroitly. While working with a freight forwarder, some business owners are not able to identify what kind of mistakes they might be making. In the article below we will discuss some of these mistakes, and how you can avoid them
Not telling your choices and preferences to the Freight Forwarder
There are many businesses that would hire a freight forwarder for the purpose of managing their shipments. This makes it imperative that your forwarder has a clear idea about what you want from him, and how he can deliver on your expectations.
The services that he offers must confirm with your demands all the time.
Do you want rapid shipments, or do you prefer cost-effective solutions that might be a little slow? If your forwarder knows that your first preference is always speed, then he will arrange air freight. However, if the cost is the most important factor within the whole equation, then the forwarder will be seeking to arrange sea freight.
There are many other transportation options that are also available. One of these options, like trucks and cargo trains, may also suit you at a particular point in time. Your forwarder should not only know these options but also be able to arrange them as and when needed.
The freight forwarder should also be able to arrange to the warehouse when you need it. This becomes all the more necessary when you need to store the goods at a particular point before starting its delivery to the client.
Failing to inform the freight forwarder about your preferences, and choices is a mistake that you should not make. In fact, if you have plans to enter a new niche market in the next few days, it is advisable to inform your forwarder in advance. This will allow the forwarder to make proper arrangements beforehand, and also enable you to get the most out of his experience and expertise in this field.
Not assigning clear and specific tasks to the forwarder
Shipping is a very complicated process. This complexity of shipping operations also translates into its pricing. This would mean that you can expect notably different quotes from different shipping operators for transporting the same products to the same destination. Sometimes, it happens that the business or entity hiring a forwarder is not clear about the specific tasks that will be performed by him before, during and after a shipment. Some of these tasks must be taken care of by the shipper, and the forwarder is responsible for the rest.
The company must know for sure which tasks are to be performed by the forwarder. It must also be made sure whether the quotes provided by the forwarder include everything that he has agreed to do for you.
You must also make sure who will:
- Arrange for the insurance?
- Who is responsible for competing for all documentation and formalities?
- Who is responsible for paying the duties, taxes and other charges?
If you get your hands on quotes that look absolutely wonderful, it is your duty to clarify what you are getting in return.
I am not using online tools provided by Freight Forwarders.
Several freight forwarders have incorporated online tools for the benefits of their customers so that they are better able to track their shipments. However, some of the clients – either individuals or businesses – simply do not know about these tools. Even if they do know, they choose not to use these tools despite the fact that they can save a lot of time and inconvenience. Shippers can use these tools for tracking their goods in real-time and manage their own logistics accordingly.
This renders it necessary to know about these tools and provide know-how and training to all personnel who should be using them. Besides tracking tools, some forwarders would also offer you the opportunity to carry out a cost analysis of your shipments through specialized software. All these tools are extremely helpful when it comes to managing your shipments, and finding out your administrative costs pertaining to goods shipments.
The Final Word
Freight forwarding is not a very highly regulated industry that is why anyone with little experience and expertise may start this business. This is the duty of the shipper to make sure that the forwarder he is working with has all the required knowledge and experience pertaining to this line of work. It also helps to find out if a particular freight forwarder is accredited by the industry because these are awarded only after the industry is sure about the quality of service of a forwarder. Some freight forwarders offer only the basic services to their customers. Others will provide not only basic, but also value-added services that render your entire shipping operation very smooth, and less hectic. You should ask your forwarder what kind of extra services he is ready to offer. Carry out a cost-benefit analysis, and then hire the right forwarder for all your shipments.