It is no secret among manufacturing companies and various businesses that every supply chain has unbreakable ties with logistics. A basic supply chain model starts with the procurement of raw materials, followed by manufacturing, distribution, and retail. While there are many processes in between, goods transportation is an integral part of all of them.
Commercial enterprises may contract many kinds of shipping service providers and logistics operators. Some of them include carriers, logistics companies, freight forwarding firms, and a lot more. Although they can offer different benefits for your business, freight forwarders would be the best ones you can work with. Let’s discuss what they can offer in the upcoming sections.
Basics on freight forwarding
Imagine that you had your products manufactured in China, but you are going to sell them in Canada. You will most probably process everything by yourself, from documentation to the arrangement of your shipment. That would be arduous and unnecessary, however. Instead, you can hire a reliable freight forwarder from China to Canada to do the work for you.
If you are new to the term freight forwarder, you want to think of it as a middleman between you and the several service providers that you need to contract for the transportation of your goods. As a middleman, they help you negotiate and deal with carriers like FedEx, DHL, UPS, and more for your shipment.
Keep in mind that freight forwarders do not physically bring your goods to their destinations. They just act as the planners or coordinators of your shipment. With that point made, read below about some of the various services that a freight forwarding firm can provide you with.
Services that freight forwarders can offer
While they do not necessarily lift your packages and physically load them into shipping containers, freight forwarding firms do provide services related to your shipment. Here are some of them.
Booking is the process of reserving freight spaces that your cargo will occupy from one port to another. When booking, you have to determine these three things:
- when you need your products to be shipped,
- how you want them to be delivered, and
- which carrier you want to contract.
The freight forwarder will be responsible for looking for available freight spaces and negotiating prices. There is a global shortage of shipping containers occurring this year so their availability is limited. Hence, you should not be surprised at the astronomical rates that you may be presented with on your freight bill.
What’s really great about working with a freight forwarding firm is that you can leverage their negotiating power. While shipping rates are rising, contracting a forwarder can help you enjoy relatively more bearable expenses.
Regardless of the kind of product that your business specializes in, warehousing is an integral step you need to accomplish. In the simplest sense, warehousing is the storage and management of your inventory. Before being sent to distributors and retailers, your products will stay in warehouses.
While you can rent or own a warehouse yourself, the costs of doing so are generally higher than the potential expenses of getting warehousing services from freight forwarders. Having your goods stored in your forwarders’ storage facility can provide you with long-term benefits like
- faster and cheaper shipments,
- excellent inventory management,
- inventory tracking,
- packaging services, and more.
Documentation and customs clearance
Your products cannot be shipped to other countries without the corresponding documents needed by various related authorities. For example, the kinds of products that you want to deliver must be properly declared in papers for successful tax payments and customs clearances.
The following are the common documents required in freight forwarding.
- Packaging list
- Bill of lading
- Insurance papers
- Shipping bill
With the multitude of papers to process, valuable time is unnecessarily consumed. Freight forwarders are experts in this domain, so handing the work to them would be a better move.
Inland transportation occurs before and after your international shipment as products need to be arranged to the correct port or station. You would need timely shipment tracking updates to keep your consignee or recipient posted. Freight forwarding firms have advanced tracking systems and processes that allow them to know the progress of your freight.
Problems can occur when shipping—some may incur astronomical losses. Unfortunately, you cannot control the way your products are delivered and handled when they are in transit. If you choose sea freight, for example, you can’t possibly rewind time in case your cargo falls into the body of water.
One way to protect your investment is to avail of freight insurance, which makes it possible for you to be reimbursed for your financial losses in case your products get lost. Freight forwarding companies may offer such insurance packaged together with your shipping plan.
To sum it up, the importance of freight forwarding lies in the convenient and comprehensive services that they can offer. Businesses can easily optimize their supply chains by hiring competitive freight forwarders to manage their logistics operations. From raw materials procurement to product distribution, a freight forwarder has a role to play.