What is Freight Forwarding?

What is Freight Forwarding?

Freight Forwarders are travel agents for freight. Freight forwarding service is used by most importers and exporters to arrange freight shipments. Freight forwarders of many sizes and shapes are present in every country across the globe. They are experts and licensed to do their job. Freight Forwarders understand how the end-to-end shipping process works and can get it done on your behalf.   

Some forwarders who are trucking companies or agents of trucking companies work as surface freight forwarders. Some specialize as ocean freight forwarders or as air freight forwarders. Some small freight forwarders stay confined to a few countries where they have a working relationship with local logistics providers. At the other end of the scale, larger freight forwarders are essentially global freight forwarders.

Freight Forwarding Services

List of the services that freight forwarders provide:

  • Freight forwarders act on behalf of their client with numerous other parties involved in the shipment, air cargo carriers, any other freight forwarders involved in the shipment, and trucking companies.
  • They prepare all the paperwork, make the bookings, and arrange payments required for each sector of the shipment.
  • Freight forwarders are also troubleshooters and step in when something goes wrong with the process.
  • Freight forwarders have a responsibility to inform you if there is any delay or risk of delay in shipment. 
  • Most freight forwarders provide a customs brokerage service that is they are both a clearing and forwarding agent and may act on your behalf with customs agents.

How to choose a Forwarder?

Finding a good freight forwarder is crucial to the success of your business. Whether you’re looking for information about choosing a freight forwarder or are simply trying to find out exactly what they do, EXIM Anything covers it all.

Do I Need a Freight Forwarder?

For most cases, yes. You need a Freight Forwarder to arrange international freight online with ocean or sea carriers. There are different scenarios for booking a shipment with or without a freight forwarder.
Few people use courier or cargo services to arrange their shipment But for most shipments, it simply isn’t possible to arrange international freight online with ocean or sea carriers. And even if it was possible to do without a freight forwarder, it is risky for non-specialists to troubleshoot the issues. A lot of things can go wrong in freight, and they often do. You need to cover your bases with freight insurance.
The importers usually make a serious mistake by agreeing to the supplier’s offer to arrange the shipment as far as the port in the country of origin. It may seem like a great deal but there are other costs involved. The shipping arrangement usually uses one of the “C” incoterms, especially the CIF incoterm. These incoterms have several flaws for an importer including a common scenario where the importer is held hostage to inflated costs. Therefore, it is wise to engage a freight forwarder.
International Freight Forwarding
Depending on your forwarder you email or speak to, they may not remember to ask for all the data upfront. Which slows down their turnaround to give you a quote. Provide them with the following information:

  • Make sure that you have the full addresses for pickup if the shipment is door to door, including postcode and full destination address.
  • You may need to provide the name of the port of origin. All airports and seaports have an international code.
  • If someone other than your company is receiving the shipment, have their contact details ready too.
  • Provide the total weight of the shipment.  The suppliers and increasingly forwarders think in kilograms.  Check the packing list.
  • If your shipment includes a mix of boxes, pallets, etc. you will need to itemize them.
  • You will have to provide total cubic volume, also called “CBM”. If there is a Total Volume field on a wizard type form, you will probably need to round to the nearest whole number.

 

ACTUAL WEIGHT VS DIMENSIONAL WEIGHT

Shipments that are comparatively light for their volume are often uneconomical for carriers to ship. The freight industry came up with a formula to charge light shipments at a profitable weight based on the shipment’s volume. This deemed weight is called the dimensional or volumetric weight.
International freight works with HS Codes. Among industry classification systems, Harmonized System (HS) Codes are commonly used throughout the export process for goods. The Harmonized System is a standardized numerical method of classifying traded products. The official product name and code should be on the commercial invoice.

International Freight Forwarding Companies

It is the freight in any Import Export Business that is still a bit murky and a reason for many to be anxious. Despite 10,000 freight forwarding companies across the length and breadth of the globe, the industry is still considered as “opaque” for certain non-transparent in regard to pricing and services. There is a need for a trusted ally in the freight industry. The ally should work as your representative at every step. The following tips can be helpful in taking the correct decision about your Export and Import business:

  • Think about your priorities. Compare price with service.
  • Analyze the need for your shipments to have special requirements.
  • And finally, look for a platform that enables you to search for both great service and a good price.
  • A new revolutionary B2B platform by eximanything.com takes nearly the entire burden off your shoulders. All your issues including freight forwarding, documentation, identifying the customer, etc. can be arranged by EXIM Anything.

Types of shipments and freight forwarders:

Most of the freight forwarders don’t deal with large/bulk commodities like cars, wheat, or any oversized shipment. Most of them also don’t deal with hazardous cargo. There are only a few forwarders who have the capacity to handle such special voluminous shipments.  There are some commodities that many forwarders don’t deal with, such as vehicles, household removals, and bulk commodities like wheat.
Another important consideration is geographic coverage. Landlocked countries don’t have their own shipping ports. Some of the countries are much away from a seaport and thus depend on surface transport.
Not all forwarders ship to all parts of the world. Smaller freight forwarding companies often have a quite limited network of agents for local delivery or pickup and customs clearance. They’ll likely cover your country’s most common trading partners.

Large Global Freight Forwarding Companies

This is an established fact that only 35% of large freight forwarders responded to small businesses ’ requests.   Large Big brands in freight forwarding business prefer to deal with large business houses.   Their larger customers bring in more business, and it’s only natural that in busy periods, larger customers will get preferential treatment. Freight Forwarder is a very important link in the Export-Import business.  However, a freight forwarder doesn’t take a turnkey job.  
On the other hand, small forwarders have their limitations. Although local forwarders can usually give their small customers more bandwidth and are faster to respond, they may not be as competitive on price and they are unable to provide some important services that cause anxiety in the business. This is something to consider should your strategy be to go for comprehensive services at an economical price.

Price vs services

Most new customer generally comes down to the price factor while importing or exporting. However, making a decision on price alone can be deceiving. For instance, some forwarders discount the first shipment to win the sale but make up for it with subsequent shipments. Also, some forwarders hide charges in the terms and conditions to make their quote price look more attractive than those from more honest competitors. Many things can and do go wrong in international shipments. Your decision to opt for a freight forwarder based on apparent marginal low price can bite you terribly when the terms and conditions are revealed and no services are provided while your shipment is in the middle or nowhere or in the designated country.

Why the SMART Comprehensive Services are important?

EXIM Anything provides Comprehensive Services to its customers. These services include freight forwarding, insurance, quality-quantity certification and other host of services. Your shipment is worth more than the shipment value – it’s needed to grow your business. That’s why you’ll need a reliable freight forwarder you can trust to handle your valued goods.

We are also 3PLs (third-party logistics providers) and specialize in providing broader support (contract logistics) for our customers. We provide useful services for importers, like superior shipment tracking and warehousing, and ultimately reliable freight forwarding.  
Airlines, ocean carriers, and especially customs agents aren’t forgiving of incorrect, incomplete, or late paperwork. If your forwarder isn’t on top of your shipment, it risks being delayed and incurring unnecessary additional charges. This is an important reason why you should opt for Comprehensive Services by EXIM Anything.
We shall communicate regularly and transparently with you. If you wait a week to get a freight quote before shipping, that might be a good indication that you could be waiting to get status updates on delayed cargo.
We will provide status updates, quickly alert you of any problem, and just as quickly work to resolve them, for instance, Cloud-Based Track n Trace is an excellent service facility. If a glitch occurs at customs or the warehouse, or when a shipment is behind schedule.
Technology and data-driven digital forwarder like EXIM Anything is the best option and worth considering. EXIM Anything B2B tech-based process and automation enables them to run a leaner business, it reduces errors and speeds up internal processes. The integrated customer interfaces deliver a superior user experience.

Can You Get Both – Great Service And Price?

Yes. It is possible to have great services at a competitive price.
EXIM Anything supplies instant online quoting from a wide range of forwarders and also provides price and service comparison. This means that it is now possible to sort and select quotes by price, transit time, or service rating.

What can I expect from a freight forwarder?

A freight forwarder will go over the main requirements and key freight documents that you’ll need to get your goods on board. Once the shipment is deployed, your freight forwarder should keep you up to date on the shipment’s progress and let you know if there are any changes or delays along the way.

What Are Some Examples of Freight Forwarders?

There are hundreds of logistics providers and freight forwarders operating globally. This can make it tricky to find the right one for your specific business needs. If you are new in business, you need extensive consultation that can be provided by contacting at eximanything.com. 

How Can I Book a Freight Forwarder?

Digitization has made things less complicated and at times easy. It is easy to search and compare different providers quickly and efficiently.  EXIM Anything has reached to world’s largest online marketplace for freight booking, giving you the ability to compare freight forwarders’ based on your specific requirements and also read about what other importers and exporters thought about their shipping experience. You must make a list of the following terms commonly used in EXIM business.
Terminal Handling Charges (THC) This charge is an aggregation of costs associated with the terminal provider’s property, and only applies to ocean freight. The costs covered include access, equipment maintenance, equipment use, and labor. The property covered includes the wharf, the carrier’s terminal facility, or a container freight station (CFS). THC is sometimes included with the port-to-port charge as an all-inclusive rate. This is a pass-through charge and is legally not negotiable, but varies per terminal. Forwarders do not apply a margin, so it is an easy charge to check.

Wharfage Occasionally some components (eg, wharfage) are not aggregated but charged as a separate fee. Wharfage is a charge on all goods that are loaded, unloaded or transshipped within the Terminal Provider’s property by any means of transportation.

FAS  (Free Alongside Ship) shipping, the seller arranges all export country stages. The buyer arranges all other stages to the cargo’s ultimate destination. Not recommended.

EXW (Ex Works) In shipping, the buyer arranges the full shipment, from the supplier’s warehouse to the cargo’s ultimate destination.

FCA (Free Carrier) in shipping terms means, the seller arranges most or all of the export country stages (e.g. customs, trucking within the export country). The buyer arranges all other stages to the cargo’s ultimate destination.

FOB (Free On Board) In international shipping, means that the seller (consignor) is responsible for transportation of the goods to the port of shipment and the cost of loading. The buyer (consignee) pays the costs of ocean freight, insurance, unloading, and transportation from the arrival port to the final destination. The seller passes the risk to the buyer when the goods are loaded at the originating port.

INCOTERM (International Commercial Term).

This means that no matter where you ship from, you will encounter the same regulations.  Incoterm is the standard contract used to define responsibility and liability for the shipment of goods. It plainly lays out how far along into the process the supplier will ensure that your goods are moved and at what point the buyer takes over the shipment process. It also has implications for your total freight costs.

CPT (Carriage Paid To) is a tricky incoterm.  It’s only recommended if using a Letter of Credit (LC). The seller is responsible and liable for all the steps in their country, or as far as the buyer’s forwarder’s warehouse. The seller is also responsible for booking the main carriage to a terminal in the buyer’s country, or even further to the buyer’s warehouse.

CIP (Carriage And Insurance Paid To) means that the seller is responsible for delivery, delivery costs, and insurance costs of the goods until they are transferred to the first carrier tasked with transporting the goods. Once this delivery takes place, the buyer takes on all responsibility. If you’re considering shipping using CIP, make sure to read the details of your contract carefully. This incoterm is recommended only if you’re using a Letter of Credit.

CFR (Cost and Freight) The seller is liable and responsible for all the steps in their country up to the point the goods are loaded on board the vessel and is also responsible – but not liable – for the main carriage.

CIF (Cost, Insurance, And Freight) is an ‘Incoterm’ developed by the International Chamber of Commerce. CIF is an international shipping agreement that is used in the transportation of goods between a buyer and a seller and differs in who assumes liability for the goods during transit. CIF determines when the responsibility of the goods transfers from the seller to the buyer. The use of CIF of transport goods is limited to only inland waterways and seas. These costs are assumed by the seller and the goods are not considered to be delivered until they are in the buyer’s possession. It is similar to carriage and insurance paid to (CIP).

DPU (Delivered at Place Unloaded). This term in shipping means, the seller arranges all export country charges and international transit. The buyer arranges the rest. This incoterm can lead to problems as it involves two forwarders at a critical point. The seller continues responsibility and risk into the import country, up until the shipment is unloaded. This can occur at a number of locations, including the port, inland terminal, or forwarder’s warehouse. 

DAP (Delivered At Place) For such shipping, the seller arranges the entire shipment, except import customs.

DDP (Delivered Duty Paid).  The seller arranges the entire shipment, including import customs.

What Is Ocean Freight?

Ocean freight transport is the shipping of goods by sea via shipping containers. Ocean freight is the most common mode of transport that importers and exporters use. In fact, a full 90% of everything is shipped by ocean freight and sea freight. The other international freight transport modes (courier, standard air freight, express air freight) are all faster, but they are expensive. Smaller shipments, and products with a high value, generally go by these other modes.

Ocean Freight Services

Ocean and sea freight services break down to two further options: a full container load (FCL) and a less than container load (LCL).
FCL is always preferable for fast processing and quick shipments.
In case of LCL, several shipments are packed into one container. This means more work for the forwarder, extra paperwork involved, as well as physical work. LCL takes more time to deliver and the cost per cubic meter is higher. . There is an increased risk of damage, misplacement, and loss with LCL.
Since shipping rates are lower for FCL, it may be worth using a full container once your shipment is large enough, even if your goods do not fill a full container.


By:
S M Faredie