What are the Advantages of Using a Freight Forwarder?
There are some people and companies who believe the services of a freight forwarder to be a non-essential shipping expense. However, a smart international forwarder can contribute extraordinary value not only to its clients but also to the global supply chain. Explore these seven ways where and how international freight forwarders provide value when it comes to importing and exporting goods.
Experience and Accountability
Moving goods from point A to point B is no easy task – especially when it comes to moving goods internationally because when consignments have thousands of miles to travel, the probability that something could go wrong increases.
This raises questions about accountability and oversight.
If an importer or exporter made a direct shipping arrangement with a supplier who would be in charge of making sure they were getting the most out of the service and that everything was done correctly?
The relationship with any partner is better managed by someone within the freight forwarding industry that has the necessary knowledge and competence.
A professional freight forwarder with years of experience will be able to offer invaluable advice and help manage FCL and LCL shipments across the most optimal routes, utilizing their global network of partners and recommending the best modes of transport. Experienced freight forwarders add value by making the importing and exporting process as straightforward as possible, for everyone from novice importers to multinational corporations.
Access to Global Partners
A respected freight forwarder that has established its business on moving products in a dependable and timely way, will need access to a wide and ranging network of partners. Rather than concentrating efforts on a smaller number of routes, it makes sense for forwarders to be able to provide services to customers wherever they are based.
Therefore, they develop global networks of relationships to expedite the transportation of goods wherever the client requires reliably and cost-effectively. These relationships can include other freight forwarders, carriers, ground handlers and warehouse operators, customs and financial brokers, and local logistics services, among other things.
As a result, forwarders deliver a true end-to-end service, with accountability for delivering smooth product transportation from start to finish.
Compliance
International shipping is a complicated process that should not be underestimated.
With the need to meet legal and regulatory standards across multiple jurisdictions, documentation and administration are critical to managing compliance during the process. The importance of shipping and export documentation, bills of lading, incoterms, HS codes, document delivery, letters of credit, and customs declarations cannot be overstated.
Making a mistake in the documentation might result in hefty additional expenses or even fines.
To that end, it makes sense to hire qualified, experienced forwarding professionals who are familiar with the specific regulations in each jurisdiction and the industry overall.
In the long run, getting things right the first time saves a lot of time and money, and where forwarders add value.
Technology: Cargo Tracking
The function of a good freight forwarder is more diverse than ever in today’s globalized economy.
Cargo tracking technology like Horizon is pushing boundaries and transforming the way forwarders work with their clients.
Shippers will always want to know the answer to three questions: ‘Where are my goods’, ‘How long will it take for my goods to arrive’ and ‘How much will it cost’.
Forwarders are asked these questions daily.
It is those firms that answer these questions quickly that are most beneficial to their clients.
For shippers and clients, tracking and tracing, price predictions, and timely delivery of such information can be critical. Transparency leads to reliability which leads to trust which are vital aspects of the service great freight forwarders provide to their clients.
Accurate Documentation
The two countries involved in the business transaction may or may not adhere to the same set of laws and regulations involved in the international transportation of goods.
For business owners, shipping to a foreign land can become challenging if their transporter shows any disparity in legal documentation. Incomplete or inaccurate documentation is on of the most common causes of long delays, fines, and goods being held at port.
Freight forwarders help to manage the process with paperwork, making sure everything is in order, that your documents are safe, and that cargo is delivered according to legal processes.
Forwarders Leverage Volume to Reduce Cost
Freight forwarders negotiate better rates with shippers due to the enormous volume of containers they manage and coordinate for their clients.
This is known as economies of scale.
As with any industry, forwarders' economies of scale are defined as having a cost advantage per unit when the level of output is increased. A single customer rarely secures the bulky spaces available on cargo ships, which is why these discounts are only available if they deal with a freight forwarder.
Forwarders gain an advantage by purchasing container space on vessels that offer the shipper security, which creates an advantage in the cost of transportation per TEU. Furthermore, the brightest freight forwarders help their clients by securing better-than-average service conditions.
Whether you choose air freight or ocean freight, the end customer will gain value from these benefits.
Versatility and Flexibility
Freight forwarders are skilled at navigating the logistics industry’s many complexities.
Due to the fast-paced nature of the industry, you’ll need an expert to guide you in the right direction and assign the appropriate resources to your company and be flexible.
Operating with a freight forwarder gives you more freedom because changing your mind isn’t as expensive as it is when you’re working independently. You might expect to have to change your mind frequently due to the complexity of the shipping process.
The freight forwarder makes certain that the process is not inconvenient.
In Summary
In conclusion, the function of a freight forwarder today is far broader than simply scheduling transportation.
Today’s freight forwarding partner should adopt a consultative approach.
They should aim to provide individualized, forward-thinking solutions, to bring value to your businesses beyond simple transportation solutions.
In their efforts to ensure clients' freight needs are satisfied, a good forwarder will offer support in areas such as foreign affairs, data and technology, insurance, customs, and more.
If you need to know more about how to choose a freight forwarder see our blog on the topic.
Or if you would like to discuss some of our services, feel free to contact us and start the conversation.
