What is the role of Freight Forwarder?
The freight forwarder or custom licensed agent is an indispensable party of the international trade and transport community, which arranges for the shipments with handle import, export and customs documentation, insurance and port and terminal charges, packing, operation of transport movements, and cargo consolidation as a total service provider. The freight forwarder’s main tasks are forwarding and clearing of cargo as the customs broker, which is crucial to the success of the customer business. Freight forwarding is the service that shippers and sellers use to arrange their freight shipments. With the door to door, shipping process works and incoterms@ knowledge, Freight Forwarder can help sellers and buyers to reduce the risks of the trade.
There are two types of Freight Forwarder which is Local and Global Freight Forwarders. Local Freight Forwarder only does the function of declaring and documentation for clearing of shipment at the port, which offers door-to-door service and operates as a 3PL operator or becomes NVOCC to complete as a total service provider. Some of them also include the trucking services but not involved in international Freight Forwarding. For Global Freight Forwarders, they are specialized as the ocean and air freight forwarders. Typically they at least reach a few popular countries where they have a trade relationship with a local freight forwarder.
The function of a Freight Forwarder
- Documentation and Customs Clearance – The role of the forwarding agent is preparation and submission of documentation to facilitate export or import complying with the legal and customs requirements and the sales agreement into or out to the country. Freight Forwarder will help customers to handle customs examination, assessment, payment of duty and arrange transportation for submitting or delivery of cargo from the port.
- Payment of freight and local taxes – Freight Forwarder is performed as an agent to the cargo owner to coordinates and effect payments of the freight and any local taxes and duties on behalf of the cargo owner. It is to avoid the delay of the cargo declaration at the port.
- Transport analysis and arrangements – The Freight Forwarder knowledge of shipping regulations, baking practices, and transportation costs can perform as an analyst to advise the client on availability and most suitable transportation provider options to meet the objective. The cargo can transport more efficiently from point to point.
- Cargo Insurance – Some of the cargo owners expect forwarders to arrange cargo insurance for a service fee as agents for their shipments. Freight Forwarder will advise on how the coverage works based on Incoterms@ and the value of the cargo to purchase insurance cover for their cargo on a gratis basis.
- Transshipment – Freight Forwarder will transit a cargo passes though a country by booking space on the transshipment vessel includes discharging, sorting, loading and/or distribution of cargo to the different consignees, hence the term ‘transshipment agent’.
- Packing, warehousing, and distribution – Freight Forwarder provides warehouse to perform both inwards and outwards movement of cargo. Freight Forwarder will act as principal agent at the same time by offering most activities related to all operations. The Freight Forwarder can store the goods in the warehouse before export or import while awaiting transportation, distribution or custom clearance.
- Cargo consolidation and multimodal transport – Freight Forwarder agents provide shipping options like Containerization, Road Haulage and Air Freight have provided the perfect medium for the grouping of cargo by FCL or LCL. Freight Forwarder will book cargo space on airplanes, trains, ships or other means of transportation.
Do You Need a Freight Forwarder?
When doing international trade, The experience Freight Forwarder acts as a logistic partner when import-export goods that need to involve a lot of documentation, and local regulations required documentation can vary from country to country. The knowledge of the customs laws and incoterms@ will help sellers and buyers to save untold time and risks of lost including saving transportation fees of the products at competitive rates.
Freight Forwarder will handle ancillary services while doing local and international trade no matter the cargo or shipments is small or large, light or heavyweight. The Freight Forwarder will take care of the shipments if the door-to-door services are required. This service provided including the filing of export documentation, arrangements with carriers, packing, crating, and storage needs. So the small and medium-size sellers no need to deal with many of the details involved with the logistics of exporting their goods. Besides, the freight forwarder typically charges modest rates for their services and have access to shipping discounts.
Instead of appointing customs broker as a customs broker, the seller or shipper can skip the middleman but appoint a freight forwarder to arrange the international freight with air or ocean carriers. Supplier may be an expert in manufacturing or trading, but they will not be freight experts. Without the freight forwarder arranging the freight it’ll be a risky game for non-specialists to play. A lot of things can go wrong when ships including cover products with freight insurance. The freight forwarder can manage an entire international freight shipment by recouping their freight costs and minimize the risks of loss. With the understanding of the Incoterms, the several flaws for an importer including a common scenario where the importer is held hostage to inflated costs. The international freight forwarder is the partner of both importer and exporter to take care of the shipments.
What is Actual weight & Dimensional Weight
To ship the shipments, the supplier or shipper has to provide the total weight of the shipment from the packing list. If the shipments include a mix of boxes to pack with pallets then the supplier needs to itemize how many of each type. Besides weight, the supplier has to provide total cubic volumes, also called “CBM”, which called the dimensional or volumetric weight.
How to choose a good freight company?
- Understand the products and check the regulations whether have special requirements or need specialized support
- Considerations for working with Global Freight Forwarding Companies with name-brand global forwarders.
- Provide the targeting shipping fees for Freight Forwarders to provide the selection.
- What to look out for if the seller is driven by the price
- What to look out for if service is more important to the products instead of the price.
- How to find good service and goods price at the same time