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Freight Forwarding: What It Is And How It Works


Shipping is critical for any business owner, as through this, it can allow their business to grow, meet their customers’ demands and reach markets even overseas. Unfortunately, shipping has many complications, leading to a very stressful dilemma and process.

If you want your shipping to be hassle-free and easy, then freight forwarding is a solution you can consider.

What Is Freight Forwarding?

This is where a different company, usually a forwarding company, organises shipments from one location to another. If you find the right company, they will be the ones to coordinate the whole process of shipping on your behalf. They use many loading carriers that service railway, road, ocean and air routes.

To make the explanation simpler, the job of freight forwarding companies is to make businesses’ lives easy, as they will be the ones to organise everything about the shipment of your business, from the time the goods depart from your location up to the time the goods are delivered to your customers or to anywhere you want it sent.

How Does It Work?

Freight forwarding job negotiates with companies providing shipping services to get the best possible rates. What they do is compare one shipping company’s rate to another and assess which of them can provide the most structured service concerning reliability, cost and speed,

Their work is based on 6 steps – Export haulage, items checkpoint, export customs clearances, import customs clearances and destination handling and arrival.

  • Export haulage

This is where the company moves the goods out of your possession to their warehouse.

  • Items checkpoint

They will inspect the goods to be shipped to ensure that they are in good condition and complete.

  • Export customs clearances

Securing clearance from where the goods will originate is part of their job.

  • Import customs clearances

On the other hand, this is when they will secure clearance from the city/state/country where the goods will be sent.

  • Inspection of goods

Authorities from where the goods will be sent will inspect the items for clearance.

  • Destination handling and arrival

The freight forwarding company will ensure that all documents and goods are received in good condition, check the items’ completeness, and then sort and inspects the cargo.

Services They Provide

So, what are the services the freight forwarding provides? They offer a wide range of shipping services that aim to ensure the goods’ convenience, safety and security before, during and after the transit.

Services included in freight forwarding services are:

  • International import and export documentation
  • Customs clearance
  • Packing
  • Shipping insurance
  • Management of the company’s inventory
  • Storage

To ensure that the freight shipping company you will work with can adhere exactly to your shipping requirements, you must provide them with specific instructions, particularly if you request shipment for sensitive and delicate items. 

How to Select a Freight Forwarder?

When selecting a freight forwarder, there are several important factors to consider. Here are some key considerations:

Experience and Expertise

Look for a freight forwarding company with a proven track record and extensive experience handling the type of shipments you require. Consider their industry expertise and knowledge of regulations and customs requirements.

Services Offered

Assess the range of services the freight forwarding company provides. This may include transportation modes (air, sea, road, rail), warehousing, customs clearance, insurance, tracking, and documentation services. Ensure that their services align with your specific shipping needs.

Global Network

If you require international shipments, check if the freight forwarder has a robust global network and partnerships. A well-connected network can ensure efficient transportation and smooth coordination throughout the shipping process.

Compliance and Certifications

Verify if the freight forwarding company adheres to industry regulations and holds relevant certifications. These may include certifications like ISO 9001 (quality management), ISO 14001 (environmental management), or memberships in professional associations such as the International Federation of Freight Forwarders Associations (FIATA) or the International Air Transport Association (IATA).

Reputation and References

Research the reputation of the freight forwarder by checking online reviews and seeking recommendations from other businesses or industry contacts. Request references from the freight forwarder and contact their clients to gain insights into their reliability, customer service, and overall performance.

Technology and Track Record

Inquire about the freight forwarding company’s use of technology and systems to track shipments, provide real-time updates, and streamline logistics operations. A company with advanced technology infrastructure can enhance visibility and efficiency in managing your freight.

Customer Service

Evaluate the responsiveness and accessibility of the freight forwarder’s customer service team. Prompt and clear communication and a dedicated point of contact can be crucial in resolving any issues or addressing concerns throughout the shipping process.

Pricing and Cost Transparency

Request detailed pricing information from the freight forwarder, including any additional charges or fees. Assess their transparency in providing cost breakdowns and evaluate their pricing compared to other companies. However, remember that the lowest price doesn’t always guarantee the best service quality.

Insurance Coverage

Inquire about the freight forwarder’s insurance coverage options. They should offer suitable insurance options to protect your goods against loss, damage, or theft during transit.

Track Record and References

Consider the freight forwarding company’s track record regarding successful deliveries, on-time performance, and customer satisfaction. Request references from the company and contact their clients to gain insights into their reliability and overall performance.

By carefully considering these factors, you can make an informed decision when selecting a freight forwarding company that best meets your specific requirements.

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