Why forwarders should outsource their documentation services?

As per the Delloite study, the sheer volume of documents flows through the logistics and freight industry just to shift cargo from one place to another. Every year this industry process more than 15 billion documents of various formats to fulfil their freight needs. The documentation process starts from the very first step when a company hires forwarders to shift their manufactured goods from their producing unit to a particular destination. 

And before getting deep into the truth that why forwarders should outsource their documentation services, let’s have an overview of some of the documents which they process and procure daily. It will help to understand the forwarding process more effectively and precisely.

List of logistics documentations

Bill of Lading (BL)– A legal document between the Shipper of particular goods and the carrier with complete details of type, quantity, and destination of the goods. This document also serves as a receipt of shipment when the good is delivered to the predetermined destination.

Master Bill of Lading (MBL)- Master Bill of lading is used by the main carrier of goods to summarize the different quantities of freight that are being sent in a particular shipment. It consists of both the Bill of lading number assigned to the various cargo as well as the description of the freight. It also represents the contract of carriage between the shipper and the carrier.

House Bill of Lading –  This document is issued by a Freight forwarder to a shipper, as an acknowledgement of the receipt of goods being shipped with other cargo as one consignment (usually as a full container load). And Draft HBLs are sent by Consignees to the Shipper for sign-off, which is based on the HBL type. 

Pro-forma Invoice- It is an invoice where a potential buyer requests exporter about the information regarding price, quality, size, weight, grade, mode of delivery, payment terms, type of packing for export of goods. The exporter then sends a reply to the enquiry in the form of a quotation known as pro-forma invoice.

Export packing list- It is the list prepared by the Shipper and sent to the consignee for accurate tallying of the delivered goods included in each shipping package, giving the quantity, description & weights of the contents.

Delivery Order– The document needs to be presented at the time of pickup giving authority to the authorized person to pick up the cargo.

Cargo Arrival Certificate (CAN) – A carrier or agent sends this document to the consignee (and to the notify party, if any) to inform about the arrival of the shipment and the number of packages, description of goods, their weight, and collection charges (if any).

So the above-listed bullets are a glimpse of a few documents that forwarders have to deal with daily in the freight industry. However, there are hundreds of such documentation work which are needed to complete the cargo shift, if we count Air Freight, Land Freight and Ocean Freight all together. But we will not discuss all those documents in this article as our course of discussion is to chalk down some prominent reasons which compel forwarders to outsource their documentation work

Reasons why forwarders outsource their documentation work

Most logistics companies are still using manual document processing practices, which is a costly, labor-intensive manual process that creates hassle. So the best available option is to outsource the documentation work, which helps in myriads ways.

Freedom to focus on the core-freight job– As per the Delloite report, 57% of the freight forwarder outsource their documentation work to other outsourcing services company and experts to focus on their core job. They to get deeply involved in the logistics and freight work only.

Reduces overall cost– The documentation work requires a higher degree of back-office dealing and unnecessarily increases the cost beard on the permanent workforce. So nowadays leading companies try to give the documentation department to other company to reduce investment cost. As per a study, 59% percent of forwarders trust third-party documentation assistance and reduce overall cost.

To enhance services quality– Forwarder feels dissipated with regular changes coming in the documentation platform. The changes come either from the industry itself or may come from the government of the land. To avoid letting these changes hamper their forwarding and logistics business, they outsource the entire department to other expert companies.

To get rid of back office work– As we have discussed above, the documentation process starts with the very first step of forwarding cargo. Whether it is developing various BLs, CAN, DO, SI, or other documents, all require painstaking effort and attentiveness. And a simple human error or machine error can cause a loss in millions. As per the Delloite study, we have found that 31% of forwarders are more inclined to enhance their forwarding quality. And they handover complete documentation services to some other group with a good track record. Today in the freight forwarding industry, Newage is recognized as the highly trusted outsourcing services company for documentation work. It has experience in handling documentation services for companies of all sizes on the global platform.

To reduce liability– In the forwarding business, when companies deal with third-party cargo worth million-dollar, they needed a high level of liability. The logistics and supply chain management is already too tough to deal with, and generally, companies reduce their liability by outsourcing. 

By now, you may have got knowledge that why forwarders outsource their logistics services and why even fortune-500 listed companies hire third party for their documentation work. It will be injustice if I close this article without mentioning some details about how to choose a perfect outsourcing services company. So, let us have a brief discussion which will help you in selecting a perfect documentation services provider. First, the company must have a global presence because EXIM trade requires that exposure. Second, the services provider must have good operational exposure as well to understand the work nicely. Finally, work experience of more than a decade to professionally handle the documentation work. 

Newage is one such outsourcing services company for your documentation services. We have 15+ years of working exposure with 350+ customers spread across 30+ countries across the globe.

“Do what you do BEST and OUTSOURCE the REST”, Newage helps the MOVER to Move

Shaik Shanavaz

Head of ITeS
Newage Software & Solutions