1. What is a Freight Forwarder and what do they do?
Freight Forwarder is a business that handles the transportation of goods. They must be licensed in the United States and can be either an individual or a company. Freight Forwarders are responsible for ensuring that the goods they are handling are transported safely, are shipped on time, and are delivered to the correct location.
Freight forwarders handle many types of goods such as, but not limited to, food, automotive parts and vehicle parts, consumer goods, and more. They are essential to getting goods from point A to B. From managing their own assets to outsourcing, they handle tasks that could fall under several different headings.
The most common types of handling involve the storage of goods until the appropriate shipper has them in their possession and/or the shipment is prepared for shipment. Some goods are mailed or dropped off directly from the producer/manufacturer without the involvement of a freight forwarder.
These types of operations involve many different forth-coming complexities. Some such as cargo weight, spot pricing, and price reserves are typically handled by the agent or carrier alone until a quote has been agreed upon. Other delivery is handled by the forwarder during the trip and may require the forwarding agent to coordinate pick-up and drop-off of goods. All done without the involvement of the shipper or distributor.
All of these tasks are essential to getting goods from point A to B and the fickle nature of international trade limits certain items from being received in a timely manner. When logistics are thrown upon a haphazard footing, things can get complicated very quickly.
As communication becomes more and more common between all parts of the supply chain, and advancements in technology aid in speed and efficiency. Although, it is always a good idea to double-check goods and their shipment status with a reputable freight forwarder. If you are unsure of the status of your shipment, seek mediation from a licensed freight forwarding company.
2. How to choose a freight forwarder for your business?
When it comes to choosing a freight forwarder for your business, you want to make sure that they have the experience and knowledge to handle any situation. It’s important to make sure that they have the capability to handle all of your shipping needs and that they can provide you with the best service possible.
They’ll need extensive training, as well as relevant certifications and working papers to prove their abilities. Lastly, you'll want to ensure that they understand how shipping containers work, are legally allowed to service them, and provide a seamless experience for both you and your customers. You need to ensure that the logistics of your shipping will be handled efficiently, ensuring that we get our packages out as quickly as possible.
Please keep reading to learn more about the specific requirements when choosing a freight forwarder.
If you’re interested in moving goods quickly and you want the benefits of the speed of a freight forwarder, you may want to consider them for this task. Freight forwarders leverage the advantages of modern shipping containers to speed up the process of shipping goods, whether those goods are finished products, inventory, or finished goods that need to be sent directly from production to final destinations. Freight forwarders may also handle consignment or brokerage services.
Here are the key requirements you’ll want to consider:
They will be working for both domestic and international clients, so they will need to be able to communicate with both a customer’s business and the import requirements of their destination country.
Before you can choose a freight forwarder, you need to decide if you want your shipment to go to a specific destination or if you want to have it go wherever the customers want. It’s important to know how long the shipment will be or what tasks need to be completed prior to the shipment’s scheduled arrival.
To ensure timely deliveries to customers, goods will often be loaded into dedicated special containers or forklifts.
3. How to use a freight forwarder to ship cargo?
Freight forwarding is a lot more common than you might think. In fact, it’s estimated that as much as 60% of all international trade is conducted through a freight forwarder. Freight forwarding is a simple concept, too.Although you might take it for granted as a part of everyday life, shipping a single, large purchase is only one small part of how freight brokers work. Freight brokers typically acquire unmanaged and often risky cargo from customers in different locations around the world.
Once the cargo is in the hands of a freight broker, freight brokers forward the cargo to its final destination and collect a fee for their services. Typically, the fees are charged based on distance and time of shipment. For example, if you wanted to ship a bag of dry ice from New York to Los Angeles, you might pay a flat fee of $2,000 for a 6-day cargo ship journey. Depending on where you are located, this may or may not translate to a cheaper shipping cost.
Here’s an overview of why cargo forwarding is beneficial and how it makes operations easier for both the shipper and the broker:
Highlighted excerpts from a blog post shared by Brad A. Hanson, Vice President, Government Acquisitions, Allied Pacific Airlines
“Freight networks are like yeast cells; when they reach the end of their productive growth phase, they disperse and produce new, viable cells. The next time you have to give yeast a starter culture to start from, you don’t wait to see if you end up with a dead yeast cell or multiple generations of viable cells. You take the yeast cells out of the tank, pour a cup of warm water over them, and gently toss them into a cup of soapy water to generate a starter culture so that next time you can harvest a bigger batch of yeast and get more out of your investment.
4. What are the benefits of using freight forwarders?
Freight forwarders are a much more affordable option than using a full-service courier service. Freight forwarders are ideal for small businesses that don’t have a lot of shipments to make or for businesses which only occasionally need to ship something across the world.Although they offer a wide range of freight services, here are some of the most common ones:
When a company contracts with a freight forwarder, they set up a contract listing what services they want to be provided and how much they’ll be paid.
This helps the freight forwarder work out how much of the total distance they’ll cover. Usually, the forwarder provides information on mileage fees, the places they’ll visit, and rates based around time spent on the routes.
For instance, to deliver 7,000 pounds worth of furniture to India from the U.K., a freight forwarder would charge £3,000 ($3,320) — but if carrying 9,000 pounds worth of furniture to India, the rate would be £9,000 ($11,060).
You’ll see some freight forwarders charge fixed pricing regardless of how much you’re ordering, some offer a flat fee per route, and some only quote flat fees per shipment.
Freight forwarders usually take two forms:
Only the freight forwarder you end up choosing will be able to quote you a fair price for your shipment.
To find the right freight forwarder for you, check out the following tips:
Usually, freight brokerages are large companies that you’ll find listed in the Yellow Pages or advertise on Facebook — all freight brokers charge fees for handling and delivery of their services.
Compass Global provides a helpful overview of how freight brokerage companies operate and lists the different fees and charges you’ll need to pay.
Compass Global provides an online freight quote, which is a large page of information broken down by cost, distance, and type of service you’re ordering from.
5. How can you save on shipping costs by using freight forwarders?
If you’re an importer or exporter, you’ll likely have heard of freight forwarding companies. Freight forwarders act as an intermediary between importers and exporters and shipping companies. They can help you save on shipping costs by finding the best deals on shipping and by negotiating special rates with shipping companies.By setting up a freight forward relationship, you not only save money on shipping costs, but you can also attract new customers to your business in the form of repeat orders. Since your customers will have delivered items to your warehouse, and since you’re receiving orders for different products, you can turn the total amount of orders you receive into profitable business.
Because freight forwarders act as an intermediary between buyers and producers, they must obtain a license from the local government in order to sell their services. Requirements vary from state to state, but generally, all freight forwarders must undergo a background check, meet certain insurance requirements, and work with a proper carrier for shipment.
Companies that don’t meet the requirements will either be unable to secure positive ratings from online customers or may risk losing those ratings. The federal government even created a national verification system to help ensure authorized carriers are handling shipments correctly.
You can set up a freight brokerage relationship with an authorized freight forwarder by using the following steps:
Step One: Determine the type of freight you’ll need. You can decide whether you’ll only be doing one-way shipments — for example, you may need to pack corn or packaging materials — or whether you’ll be importing from another country or using a different method of transportation like sea.
Step Two: Determine the type of carrier you’ll be using. For example, air freight may be the most cost-effective option for most businesses. However, you may find a freight brokerage is willing to handle freight on a lump sum basis or for a price per piece.