Freight Forwarders – Everything you need to know
You may have heard the term freight forwarding, but what exactly does it mean? Simply put, freight forwarding is the process of moving imports and exports through the supply chain. Freight forwarding businesses work with shipping companies, airlines, and customs authorities to move items from their point of origin to their final destination.
Understanding Freight Forwarding
Freight forwarding involves coordinating the transportation of goods across international borders. These goods can be in the form of packages, crates, containers, or a combination of all three. Freight forwarders serve both businesses and individuals engaged in importing and exporting.
The level of involvement a freight forwarder has in the shipment process is determined by the client. For instance, they might handle a container load from a factory in one country to another for further assembly, or they might transport finished products directly from the manufacturer to a retailer’s warehouse. Freight forwarding companies utilize various shipping methods, including sea and air freight, to ensure efficient delivery.
What is an example of Freight Forwarding?
Let’s say a factory in India manufactures fabrics. The freight forwarding company could arrange to transport the fabric from the factory to the Indian port by truck, ship the fabric to the Port of Rotterdam, and then fly the fabrics from the port to the customer’s warehouse or store in the Netherlands.
The 5 modes of transportation in logistics
How freight forwarding works
Freight forwarding involves coordinating the transportation of goods across international borders. These goods can be in the form of packages, crates, containers, or a combination of all three. Freight forwarders serve both businesses and individuals engaged in importing and exporting.
The level of involvement a freight forwarder has in the shipment process is determined by the client. For instance, they might handle a container load from a factory in one country to another for further assembly, or they might transport finished products directly from the manufacturer to a retailer’s warehouse. Freight forwarding companies utilize various shipping methods, including sea and air freight, to ensure efficient delivery.
STEP 1. The importer and the supplier agree on terms of trade – known in the trade as International Commercial Terms (or ‘Incoterms’). The Incoterms are a set of internationally recognised rules which define what each side is responsible for.
STEP 2. Depending on the Incoterms agreed, the freight forwarding company can arrange to move the goods from the supplier’s location to the next part of the chain – whether that’s to a seaport or an airport.
STEP 3. The company will also arrange for the cargo to be satisfactorily inspected by the customs department of the origin country if required.
STEP 4. The freight forwarding company will also track the transportation of the goods to ensure their arrival or keep updated on any delays or transit changes.
STEP 5. Once the cargo has arrived in its destination country, the paperwork must be checked once again to confirm that it meets the required custom and quarantine requirements. A good freight forwarding company will request and prepare this information in advance to reduce holdups in the process.
STEP 6. Once the goods are approved for release into the destination country, the freight forwarding company will organise its onward transit. This could be direct to the customer’s warehousing facility, retail store, or, if a 3PL is required, to a warehouse managed by the freight forwarder.
STEP 7. Arrival at destination and unload of cargo freight.
Freight forwarding companies may work with single or multiple carriers to ensure that the goods go from A to B safely and in a compliant manner. The carriers may use one or more modes of transportation, e.g., sea freight and air freight.
Container Ships: The most common mode of sea freight transport. These vessels are designed to carry standard 20’, 40’, and 45’ containers. They can accommodate most dry-load transport.
General Cargo Ships: These mostly carry packaged goods but do not have space for containers. They use their own built-in cranes for loading and unloading operations once at ports.
Tankers: Designed for the transport of large amounts of liquid cargoes like petroleum products, chemicals, wine, and juice in bulk.
Dry Bulk Carriers: Structured specifically to transport solid non-packaged loose dry cargo in bulk quantities.
Multi-purpose Vessels: Can carry a combination of all kinds of goods (general cargo, liquid), thanks to separate containers and storage systems.
Reefer Ships: Designed for the carriage of frozen/temperature-controlled cargoes, mainly in refrigerated containers.
Roll-on/Roll-off Vessels: Made for the carriage of wheeled cargo, from private cars to industrial vehicles or lorries.
Direct Services: Typically used for smaller parcels that can fit into the hold of an aircraft that is already taking a scheduled flight.
Consolidation: The most cost-effective air freight method; different shipments are placed in one flight. This can delay transit times while waiting for the shipments to arrive.
Charter: The most expensive option; the freight forwarding company charters an entire aircraft to carry specific cargo to the carrier’s exacting requirements.
What Does a Freight Forwarder Do?
A freight forwarding company works on behalf of its customers to secure a seamless journey for the goods entrusted to them. There are always at least three elements involved: the manufacturer, the intermediary (freight forwarder), and the customer.
The freight forwarding company has key responsibilities:
Safety and Compliance: Ensuring that the cargo is adequately packed and secured for its onward journey.
Speed & Efficiency: Ensuring goods arrive according to the customer’s timelines.
Convenience: Saving the client time by removing logistics coordination from their to-do lists.
Six great reasons to use a freight forwarder for your logistics
Grow Your Business: The freight forwarding company takes all the hassle out of managing logistics so that customers can focus on growing their business.
Better Rates: Freight forwarding companies can look after large shipment volumes, bundling up customers’ loads to take advantage of economies of scale.
Simpler Customs Clearance: The best freight forwarding companies are AEO (Authorised Economic Operators), qualified to manage various customs requirements.
Keep Ahead of Regulation: The freight forwarding partner stays aware of trends and regulations impacting the industry.
Expertise: Freight forwarding companies build their reputation on taking care of all the intricacies of the logistics network.
Out of Scope Goods: Freight forwarders offer information and advice on routes, origin, and how to handle special/unusual requirements including dangerous and hazardous goods.
Contact JTM Cargo Management today for hassle-free transportation of your goods and cargo. Our coastal and sea freight options are secure and reliable.
