In this article we are going to explain the job of a freight forwarder and How to choose a good Freight Forwarder.
What is a freight forwarder?
A forwarder is a freight forwarding business operator that accepts freight from a shipper and accepts transportation, using transport means of other contractors (ships, airlines, railways, lorries, etc.).
Generally it refers to a freight forwarding business operator that handles international transportation.
Air freight forwarders specialize in air transportation, NVOCC (non-vessel operating common carrier, sometimes abbreviated as NV) specialize in marine transportation.
So that’s it. It means A freight forwarder is an international logistics company which you would use to ship cargo overseas.
What is forwarder’s job?
Basically forwarder’s job is to control logistics. Various processes are included to send cargos to overseas.
Examples of marine and air transportation processes:
・Pack the cargo
・Load the cargo on a truck
・Domestic delivery of the cargo
・Document confirmation and form application
・Export customs clearance
・Load the cargo (port / airport)
・Marine / air transport (ship / airplane)
・Unload the cargo (port / airport)
・Import customs clearance
・Pickup of the cargo at port
・Delivery the cargo
Forwarder takes care of the troubles for you
Let me affirm you that a cargo will not reach a destination with some troubles.
You may think that your luggage arrives without a big problem every time, but we, the forwarders, are the ones that solves problems behind the scenes.
Weather, vessel delays, documentation errors, strikes at the port, equipment problems at the port, customs clearance, etc. There are so many of factors can delay or stop shipments.
It is the role of a forwarder to avoid and adjust these causes as much as possible and deliver a cargo to a customer on schedule.
What qualifies a good forwarder?
Do you thoroughly investigate a freight forwarder before you ship cargo? You may not bother, as the company you deal with currently is a major name freight forwarder.
There are a lot of freight forwarders in the world, however, if you do not choose the most effective company, you may be charged increased costs for shipping cargo.
There are so many Freight Forwarders in China market.
The company may tell you that they are unable to ship even though it is possible to send they can and the cargo may be held at customs every time due to lack of their experience.
Therefore, it is very important to choose the most effective freight forwarder.
Why there are so many Forwarder?
ForwarderOne is located in China, where there are hundreds and thousands U.S. transportation companies that are registered on the China-U.S. Chamber of Commerce. When I checked the companies on the list, I found that most of them operate conducted freight forwarding businesses.
The reason why there are so many forwarders in the market is as below:
・ Not much initial investment
A freight forwarder does not require assets such as vessels or airplanes. They are able to start their business without holding any assets.
・ There are less fixed fee
In China, there are companies operating with 1 person and 0 employee.
・ There are so many different logistics
Transporting goods sounds easy but is actually complex. Different logistical arrangements need to be made based on the content of the cargo, delivery location and customer request.
Therefore although there are many different companies offering logistics services, each serves different needs.
Why do you need a Freight Forwarder?
You may think you can arrange logistic arrangements directly with a shipping lane and a truck transportation company without using a freight forwarder. Actually, it is possible to make transportation arrangements by yourself. However, it is not very efficient.
If you are not shipping high volume in hundreds of container a year like a large company, costs will likely be higher.
Price advantage to work with freight forwarder
If your company needs to send a container but only have volume of 1 -2 containers per month, the charge for ocean freight cost from the shipping lane will be incredibly high.
A major freight forwarder will transport hundreds and thousands of containers each month.
A freight forwarder works as an agency for a shipping lane and they receive a discounted price.
Therefore it is cheaper to use a freight forwarder than booking a carrier directly.
Manage complex logistics arrangement
There are different methods of cargo transportation and arrangements that need to be made for logistics.
・ Booking a shipping line and an airline.
・ Trailer arrangement with a transport company.
・ Customs clearance arrangement with a customs broker.
・ Making arrangement with a packaging company – if packing is required.
・ Contacting a heavy load company if the cargo is heavy.
・ Is there is less cargo, arrange consolidated service.
・ Contacting a specific transportation company if the cargo will cross international borders.
・ Contacting a refrigerated warehouse company if you need to store frozen cargo.
If you ask a freight forwarder to make the logistical arrangements, they will deal with all of the specific requirements.
An effective freight forwarder with experience will choose the most cost-effective method to ship your cargo. Therefore, professional freight forwarders who have experience of shipping cargo overseas are required.
How to choose a good Freight Forwarder?
By now, you are able to understand the necessity of a freight forwarder.
What makes a good forwarder
・ Can provide many options
・ Can provide optimal proposals tailored to customer needs
・ Ability to obtain a space for a ship
・ Transportation costs are lower than other companies
・ Able to explains risks to customers well
・ Problem solving when unusual things happens
・ Cargo does not stop at customs clearance
・ Makes correct documentation in accordance with laws and regulations
Now, if you are going to use a freight forwarder, which company do you need to choose?
We will go through the content of a freight forwarder role and explain the key points to look at when choosing one.
First is to understand the strengths and the weakness of a freight forwarder. Not all freight forwarders can arrange all logistical arrangements smoothly.
Our company deals with freight forwarding and customs clearance. We specialize in the following:
・ Asia and North Americas
・ Amazon FBA cargo
・ DG cargo
・ Air transport
For example, if you want to send DG cargo and use a freight forwarder who does not specialize in DG cargo, the cost will increase.
Also, they will be unable to deal with problem as they happens.
If you intend to ship DG cargo, you need to use a company which specializes in DG cargo.
Secure vessel and air plane space
The second point is to understand that the transport space of ocean freight vessels and airplanes are limited.
You are unable to ship whatever and whenever you like, especially prior to extended vacations such as New Year, National Day holiday and Christmas. As space will be very limited as companies will ship before the holiday starts. You may want to ship urgent cargo to catch the season. A good freight forwarder is able to secure space during high seasons.
Offer a competitive price
Once cargo can be transported safely and on time, the next thing to look at is cost.
The product unit price will increase if the cost of logistics is high. If the cargo can be transported safely and on time, reduced cost transport will be preferred.
Companies who can provide a competitive price are strong forwarders.
How to get the competitive rate?
Now, where does this competitive price come from? This depends on the volume of cargo the freight forwarder deals with and efficiency they operate.
If they are dealing with high volume, the shipping line will provide them with a special rate. If a freight forwarder can operate efficiently, they can provide their customer a good price.
There is a case that if the freight forwarder offers its customer at cheaper price to obtain additional work, the quality of their service may decrease. So, it is important to maintain the balance.
Provide many choices of the carriers
A freight forwarder does not own vessels or airplanes, however they deal with different shipping lines and airlines.
Therefore, they can provide different options on price, schedule and free time to their customers.
There are freight forwarders who only deal with a specific shipping line or airline. However, a customer will gain additional benefits from dealing with a freight forwarder who can provide more choices.
Smooth customs clearance
Customs clearance is a hurdle for international transport. You are unable to ship whatever you want in cross border transportation.
You may be required to have a permit or register items. It is important for a freight forwarder to be able to communicate this information to their customers in advance.
An effective freight forwarder will be able to ship cargo smoothly, without the cargo being held at customs clearance.
A good freight forwarder who hires an experienced customs specialist can deal quickly and efficiently, this is how our company operates.
Customs clearance process is an essential point to any international logistics.
Good communication with oversea agents or branches
An exporting freight forwarder and an importing forwarder located in two different countries, co-operate with each other to ship international cargo.
A large company has many branches overseas and there are freight forwarders who have a network of agency contracts.
If two countries do not communicate effectively, it may cause delays with customs clearance which will affect the delivery schedule.
An important factor is to remember to check that the importing country has a branch or agent with good communication skills. Important factors are to check that the importing country has a branch or agent. and to check if they have good communication skills where they communicate regularly.
A freight forwarder is a service business. The customer services representative will find it easy with a freight forwarder if they are able to provide good service and positive attitude.
If a forwarder is able to provide good service and work with good attitude, the customers will be easy to work and will have a positive feedback toward them. It is important to check the response time (quick response) and flexibility toward complicated requests when choosing a freight forwarder.
High level cooperation within a company
To provide a good service, it is important to maintain high level cooperation within a company.
Roles and responsibilities differ between each company. It is important for sales representatives, customer services and customs specialists to work and cooperate effectively.
If effective communication is not maintained by each person within the team, the customer will be unable to forward issues and concerns to the appropriate person.
Customer will not be able to proceed the jobs when they cannot contact to person in charge.
Also, if a sales representative leaves a company, the customer will not necessarily know who they need to contact – this happens a lot in China.
We had a look at how to choose an effective freight forwarder using our company as an example. You can reach out to us any time if you are looking for a freight forwarder to work with.