What are freight forwarding services?
In simple terms, a freight forwarding service is an agency that takes on the responsibility of the movement of cargo on behalf of the owner or the exporter or importer of the goods. The freight forwarder does not really move the freight itself, but acts as an intermediary between the company shipping the goods and the logistics and transportation services such as trucking, moving freight by land or by the ocean, or by air.
Freight forwarders specialize in a number of areas such as arranging for transport of shipment from one place to another, storage, preparation for shipping, warehousing, documentation, booking spaces for the cargo, negotiating prices, cargo insurance, filing insurance claims, freight consolidation, and deconsolidation and collection services.
Many exporters who pick freight forwarding services do so to delegate the task of export documentation and shipping requirements as the forwarder has the expertise to advise and assists their clients in the most efficient way to move their goods from one destination to another. Exporters often find that the extensive knowledge of the forwarder in the regulations, documentation, transportation costs, exporting process, and negotiation works out to be more economical than any other method of exporting their goods.
Therefore although a freight forwarder is not mandatory for exporting or importing goods, it is their expertise in the process and navigating through the regulations that cut downtime and costs for exporters. Also, freight forwarders work with a well-knit network of logistics partners such as shipping companies and agents involved with customs and documentation who ease the process and move the shipment through as fast as possible. This means an International freight forwarder is an indispensable partner for any company that deals with the export or import of goods across the globe. They are all the more important for businesses when their in-house resources are not adept in shipping internationally or know the procedures.
Why choose a freight forwarder
As mentioned earlier, freight forwarders are experts in the industry who can greatly ease the process of moving shipments across state lines and international borders. These are some of the major advantages they can offer companies involved in international trade:
- Cost savings: Because of the high volumes of shipment they move, freight forwarders are able to negotiate better deals with carriers to move goods. Exporters otherwise would have to shell out a lot more to get their goods moved as they do not have the contacts and connections that freight forwarding services do. This is even more relevant to businesses that do not export or import regularly.
- Reduced burden: Businesses who are inexperienced in the process of moving freight internationally can have some peace of mind knowing that their cargo is being handled by industry experts. Rather than having to deal with the burden of paperwork, negotiation with the carriers and customs both domestic and international, businesses can have it all taken care of by freight forwarders at reasonable prices.
- Everything under one contract: When moving cargo exporters will have to deal with a number of contracts with every carrier and logistics service they choose to have their cargo delivered. When moving cargo across international borders they will have to sign multiple contracts and delays can strain both the contract and relationships with the companies. Having one freight forwarder deal with everything eliminates the complexity and keeps things under one contract
- Flexibility and reliability: An International freight forwarder has the capacity to meet tight deadlines and deal with unforeseen circumstances when moving freight around the globe. With their resources and business connections, they can meet delays or breakdowns by diverting freight in alternate ways and still make the delivery deadlines. While these circumstances can cause major delays or losses for a regular exporter, it is easily handled by the freight forwarder.
How forwarders maximize their efficiency
Shipments rely on hundreds of people and processes to get goods from point A to point B. Orchestrating it is a major task for humans to handle alone in today’s age of quick deliveries and shorter deadlines. To maximize efficiency International freight forwarders use these methods:
Digital technology is key to managing all the freight forwarding activities today. Data from various sources in the supply chain offer a complete insight into the flow of goods. This improves the predictability of timelines and increases accuracy. It also provides excellent security for both goods and the documentation that accompanies them in the form of digital information. Government portals and digital connection to logistics support also accelerates approval processes, claims management, and payment flows.
Software that handles much of the processes automates numerous manual tasks which are prone to mistakes and delays. The best freight forwarding services automate their processes such as order placement, document handling, carrier booking, shipment planning, invoicing, and numerous other functions. Automation can also offer real-time information about profit margins at the level of cargo and help companies maximize their earnings while offering the most reasonable service to their customers.
Improved customer experience
With increased digitalization comes better customer experience as it becomes easier for customers to maintain their timelines. The real-time insight that freight forwarding software can offer to customers greatly improves the accuracy of delivery. Digital quoting also shortens the process of negotiation which would traditionally take days and improve revenues.
Freight forwarding services are essential partners for all businesses dealing with local and international shipments. They ensure the shipping process is fast, secure, cost-effective, and reliable in every other aspect. The digitalization brought about by freight forwarding management softwares makes them all the more efficient and effective in the business.