What is the role of freight forwarder

What is the role of Freight Forwarder?

The freight forwarder or custom licensed agent is an indispensable part 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 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 Forwarders: 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 trucking services but are not involved in international Freight Forwarding. For Global Freight Forwarders, they are specialized in 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 the 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 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 – the Freight Forwarder is performed as an agent to the cargo owner to coordinate 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’s knowledge of shipping regulations, baking practices, and transportation costs can perform as an analyst to advise the client on availability and the most suitable transportation provider options to meet the objective. The cargo can be transported 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 – A Freight Forwarder will transit a cargo passes through a country by booking space on the transshipment vessel including discharging, sorting, loading, and/or distribution of cargo to the different consignees, hence the term ‘transshipment agent’.
  • Packing, warehousing, and distribution – A Freight Forwarder provides a 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 customs 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 Forwarders will book cargo space on airplanes, trains, ships, or other means of transportation.

The use of a freight forwarder is strongly recommended to inexperienced importers and exporters, especially for the broad range of useful advice the customers by offering on new regulations, trade development, government incentives, custom clearance processes, insurance practices, transportation, inventory management, logistics, documentation, and import-export of all issues. Nowadays, the freight forwarder has become more crucial in the industry due to the difficulties of growth in the transportation system.

Do You Need a Freight Forwarder?

When doing international trade, The experienced Freight Forwarder acts as a logistic partner when import-export goods that need to involve a lot of documentation, and local regulations require 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 loss including saving transportation fees of the products at competitive rates.

Freight Forwarders will handle ancillary services while doing local and international trade matter the cargo or shipments are small or large, light or heavyweight. The Freight Forwarder will take care of the shipments if door-to-door services are required. This service includes the filing of export documentation, arrangements with carriers, packing, crating, and storage needs. So the small and medium-size sellers do not 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 has access to shipping discounts.

Instead of appointing a customs broker as a customs broker, the seller or shipper can skip the middleman and appoint a freight forwarder to arrange the international freight with air or ocean carriers. Suppliers may be experts 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 covering products with freight insurance. The freight forwarder can manage an entire international freight shipment by recouping its freight costs and minimizing 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 is called the dimensional or volumetric weight.

How to choose a good freight company?

  1. Understand the products and check the regulations whether have special requirements or need specialized support
  2. Considerations for working with Global Freight Forwarding Companies with name-brand global forwarders.
  3. Provide the targeting shipping fees for Freight Forwarders to provide the selection.
  4. What to look out for if the seller is driven by the price
  5. What to look out for if service is more important to the products instead of the price.
  6. How to find good service and goods prices at the same time