The bulk of international trade lies in exports and imports above any other thing. As such, big and small importers and exporters from all over the world need a safe, and reliable channel to facilitate the transfer of merchandise. Unfortunately, a majority of the importers and exporters don’t have the luxury of owning private shipping for their goods and services and therefore, they have to seek the services of a freight forwarding company. When stripped to the bare bone, freight forwarding is essentially a traveling agency for cargo.
A global freight forwarding company for that matter is a company that makes arrangements for the import and also export of goods on behalf of their clients. Global freight forwarding coordinates the necessary traveling details which are essential for making the goods get to the respective global buyer. Freight forwarding is an essential part of international trade and this post will bring you up to speed with everything you need to know about this industry. Stick around to find out more!
Is there a difference between freight forwarding and logistics?
From the outside looking in, freight forwarding and logistics might like the same thing. In fact, anyone who is not part of the supply chain industry might confuse the two and not know the precise differences. However, it is worth mentioning that these two industries are different but are often interrelated and interdependent.
First off, freight refers to the method of cargo transportation from one point to the next, for instance, air or sea. Logistics, on the other hand, is a term used to refer to the means of transport the cargo will use to move from point A to B. It is common for freight forwarding companies not to own any transportation assets, and therefore, have to partner with a logistics company. Without logistics and freight forwarding services, global trade will quickly grind to a halt.
Freight forwarding company operations
Before digging into the intricate operations of freight forwarding companies, it is essential to reiterate that most freight forwarding companies don’t own transportation assets. Their sole responsibility is to act as a middleman between global buyers and sellers. While freight forwarding companies are not physically responsible for moving the cargo, they play a crucial role in making the said goods reach the desired destination without fail.
Similar to how a travel agency works, freight forwarding companies are the only point of contact throughout the import and export process. They are responsible for handling the shipping details from the beginning up to when they will reach the required destination. Part of their task is to track the arrival of the transport vessel and contact the shipping vessel for timely pickup.
Throughout this process, the freight forwarding company maintains close communication with the clients expecting the cargo. Other than that, these companies will also recommend the most efficient mode of transportation depending on the goods, not to mention also prepping the cargo for custom clearance. Freight forwarding companies offer a variety of services, some will let you choose a package that is the most convenient and also budget-friendly depending on your needs.
Types of freight forwarding
As established earlier, freight refers to the method used to ship goods, for example, air or sea. Here are the three common types of freight forwarding.
Air forwarding
This involves the shipping of goods from one region to another by use of airplanes. This is the fastest shipping mode popular for transporting perishable cargo.
Land forwarding
Land forwarding on the other hand involves shipping cargo by road. This is one of the most common means of shipping perfect for transporting goods back and forth. Land forwarding is also ideal for bulky cargo.
Ocean forwarding
Ocean forwarding is the most preferred method of transporting bulky cargo in large quantities. It is also relatively cheaper than air transport especially when covering large geographical areas. However, you need to be aware that shipping by sea or ocean often takes longer than it would when shipping by air.
Importance of global freight forwarding
The backbone of international trade lies in the exchange of goods, therefore, freight forwarding services come in handy in making the wheels of international trade turn continuously without fail. However, it is not impossible for companies to organize private transportation. So, what is the importance of global freight forwarding? Let’s take a look at some of the reasons why companies should consider seeking the services of these companies.
Tracking technology
One of the most important tasks of reliable freight forwarding companies is to facilitate cargo tracking. Depending on the mode of freight, it may take a while before cargo reaches your preferred destination. Let’s face it, if you have ever shipped goods before, there is always a fear of losing your cargo along the way.
Thanks to the advancement of technologies, freight forwarding companies have the capacity of tracking your cargo. This goes a long way in helping the clients rest their fears since they can be able to accurately predict when the cargo will arrive. Transparency is vital not only to the supply chain industry but to business as a whole.
Proper documentation
International shipping is a complicated process and can quickly turn into your worst nightmare especially if you are not up to scratch with international laws. There are a lot of bureaucracies that require you to provide multiple documentation necessary for different international jurisdictions. Remember, no two countries have the same set of rules, therefore, if you are not conversant with the requirements of the two countries, you can easily get overwhelmed by the process. In addition, failure to provide some documentation might result in hefty fines and unprecedented delays that you surely won’t like.
Instead of going through the hoops and learning from the school of hard knocks, it is better to leave your cargo in the hands of professionals. Reliable freight forwarding companies know what is required for shipping in different countries. Also, they will handle the paperwork and take care of all the legal processes on your behalf. In the end, having your cargo delivered safely and on time is all that you want and freight forward companies will help you achieve exactly that.
Cost-effective
Freight forwarding companies work with logistics companies to ship cargo from all over the world. Because of the sheer bulk of containers and cargo that they manage, they are able to leverage better rates. Let’s face it, individual clients are not able to secure big enough spaces to capitalize on the advantage of economies of scale.
Freight forwarding companies are able to purchase huge container spaces from the shipper’s vessel giving them the ability to negotiate and ask for better rates. Depending on the particular forwarding company, clients can also secure better shipping conditions. Freight forwarding companies also have different discount rates for regular clients who ship in bulk.
Security
Among the many perks of working with freight forwarders, security comes right at the top of the list. You don’t have to worry about your valuables getting lost in transit, especially when working with reputable and reliable freight forwarders. These companies have the necessary tools and equipment for both handling and also packaging the items safely. Fragile cargo is handled differently compared to others that don’t bear the risk of breaking. There are different digital and manual documentation to ensure each item is accounted for.
Flexibility
In the world of global shipping, a lot can go wrong even with the right planning. For an independent importer, it can get quite frustrating when there are unprecedented delays or unforeseen circumstances that are beyond your control. Fortunately, established freight forwarders have the resources and also expertise to make quick decisions all in a bid to meet tight deadlines.
Working with a forwarder gives you peace of mind knowing that professionals are handling your shipping. What’s more, you also have the freedom of changing your mind without having hefty financial implications as you would if you choose to ship as an independent. Convenience during cargo shipping is often understated but plays an important role in the peace of mind of the clients.
Timely pickup and delivery
In order to meet the said delivery time, picking up the cargo on time is essential. Professional freight forwarders carefully plan the shipment process right from pickup to delivery in order to meet the client's tight deadlines. Choosing to do the shipping as an individual means you need to have people on standby who will pick up the consignment and deliver it to the right logistics company. While this is entirely possible, when your package is lost in the process you have no one to take up your complaints with. There are a lot of moving parts as far as independent shipping is concerned. It is almost impossible to guarantee efficiency and productivity in the process.
Bottom line
Global shipping is a complicated process with a lot of bureaucracies, and legal processes that need to be approached with professionalism. The good news is that established freight forwarders have the necessary experience in this field to navigate even the unforeseen circumstances that are common with international shipping. They not only provide stress-free shipping but also give you digital tools to help you monitor your cargo while in transit. You don’t have to deal with the hassle of handling the entire process on your own, a good forwarder will be able to do the heavy lifting on your behalf.
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