What is Freight Forwarding?

A freight forwarder makes exporting manageable for anyone involved in or considering exporting.

For any growing company, the idea of selling their products internationally can be an exciting endeavour – international customers, different markets and a global footprint.

So whilst importing or exporting can contribute to the growth of a company, international shipping can be a complicated and time-consuming process with documentation, process and regulations making the whole thing a daunting task for those new to it.

This is especially true for SMEs who may not have a dedicated resource responsible for this aspect of their business.

However, for many using a Freight Forwarder is the most straightforward solution, as Freight Forwarders can advise on how best to move shipments and assist in doing so, as they are the ones who know how to navigate the world of international freight.

Moving Goods from A to B

Ever since the creation of the wheel mankind has looked to move items from A to B. As different societies evolved throughout history to develop markets for the exchange of goods, either within communities, and then between communities, the need to move goods further and further grew as trade spread to newer parts of the planet, and as trading developed between far-reaching civilisations.

In today’s globalised world things are a lot more complicated than the movement of goods along the Silk Road; the eventual advent of reliable rail transport and steamships created demand for the freight forwarding industry as trade developed between Europe and North America, creating additional demand.

Today, thousands of companies now specialise in providing trucks, containers, ships, aircraft and all the intermediary services in between. Buyers and sellers no longer move their goods themselves but rather rely on third parties who have made navigating today’s complex logistics market their area of expertise, bringing with them cost and efficiency savings for the benefit of everyone.

Critical within this process are Freight Forwarders who act as a middleman between those wanting to ship goods and the large shipping lines and air cargo companies who actually transport the goods.

What does a Freight Forwarder do?

A freight forwarder is a person or company that organises shipments for individuals or corporations to get goods from their starting point to their final destination. As a freight forwarder, you do not normally physically move the freight itself but act as an agent.

The freight forwarder, therefore, acts as an intermediary between a shipper and various transportation services such as cargo ships, trucks, air freight, and also moving goods by rail. The basic requirement of a freight forwarder is to ensure that your cargo is picked up and then delivered to the required place, for the right price and in the same condition that it was picked up from.

Why Use a Freight Forwarder?

Why can’t you contact a large cargo company directly rather than asking a Freight Forwarder to ship your goods?

Generally, large companies like airlines and shipping lines don’t deal with customers directly because interacting with thousands of individual customers instead of a small number of freight forwarders or brokers, would quickly drain resources and create complications for them.

Freight Forwarders function as the intermediary and make the entire system smooth and transparent.

Managing all the complex parts of shipping goods around the world is a daunting task for a single organisation of any size, so Freight Forwarders help to make that process easy by managing a lot of the process for you.

Freight forwarders have a vast amount of experience dealing with complex customs regulations, different port services, Customs processes and liaising with shipping lines.

Because freight forwarders move large volumes of shipments through several different shipping lines they will also be able to give you better shipping rates than if you were to try to deal with shipping lines directly as they have the economies of scale that you may not be able to achieve for individual shipments.

What’s the difference between a Freight Forwarder and a Courier?

While both are used to get your items from point A to point B, there are some very large differences between courier services and freight forwarding.

Courier services are usually a door to door method of delivery that utilises a professional specialised mailing company. Courier services are usually chosen over standard mail services out of the desire for high-quality processes and speedy delivery.

Advantages of using courier services

The main advantages to courier services are that they are extremely fast and because they are hand delivered, there is very little chance of damage or loss to the product.

Disadvantages of using courier services

However, the main disadvantages to using a courier are the cost and size limitations that you face, as most courier services have limits on the size of packages and prices to increase dramatically the larger the particular parcel being sent.

For this reason, courier services are rarely used by companies who ship regular large orders. Courier services are therefore generally and used for occasional orders or for small packages like documents.

As Freight Forwarding involves utilising specialised truck, shipping and airline networks, to move large orders of product, but don’t transport goods using their own vehicles, it is essential for them to have strong alliances with other transportation companies, who specialise in the transportation of goods by truck, air and ocean.

Therefore, when using a Freight Forwarder you are effectively sharing the cost of the trucks, shipping container or aircraft hold, with other clients who have similar destinations whilst only paying for the space you take up.

The economies of scale that Freight Forwarders can achieve, therefore means they are actually the most efficient and cost effective way to transport shipments regionally, cross country or internationally.

What is the future of Freight Forwarding?

With the world constantly getting smaller, and things constantly getting faster, the freight forwarding is not immune to the changes we see around us. The potential for technological change within logistics will result in disruption and opportunities for the Freight Forwarding industry.

Technological developments such as digitalisation, automation, IoT and 3D Printing will all take affect over the decades to come.

However whilst digitisation will transform some aspects of the movement of freight, other aspects, such as customs paperwork, are unlikely to see the manual transfer of documentation removed for many years despite the excitement of the potential of technologies such as Blockchain.

The expertise in customs paperwork and process that Freight Forwarders provide are still going to be in demand for a long time yet.

However, for other aspects, Freight Forwarders are going to need to adapt, especially when it comes to their back-end and customer-facing processes. For example the precision tracking of goods to predict delays and update customers, or the use of cloud-based systems for paperwork.

The growth of e-commerce and automation platforms has seen the customers demand for receiving information immediately increase across all industries, and therefore customers expect a richer customer experience from Freight Forwarders also.

At one stage, a delay in providing an update on the movement of a shipment whilst a company checked with a driver, shipping line or other third party service was acceptable. Today a response is expected as soon as possible and delays may result in a loss of repeat business.

The sharing of data across the industry will therefore see new offerings built on this shared pool of data to improve the customer experience.

Digital technologies and improved customer services are therefore areas where Freight Forwarders are going to need to adapt to continue to provide value in the face of rapid technological change and the consolidation of various parts of the shipping process.

For those starting to market their products overseas and looking to make their first shipment, using a Freight Forwarder is key to getting their goods from A to B. They should be able to help you process your paperwork, arrange for transportation of the goods and the necessary customs paperwork. So if you thought you’d have to handle everything yourself, don’t worry, a Freight Forwarder can manage the process for you.

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