When you need to ship more than 150 pounds
The logistics and paperwork involved in international shipping can be quite intimidating for entrepreneurs and managers who want to expand their business globally.
They have to keep up-to-date with the documentation, shipment, regulations and other aspects of importing and exporting. It can be quite exhausting to take care of all that along with the day-to-day needs of your business.
Freight forwarding companies can help businesses with getting goods from your supplier to your warehouses either by air, land, or sea. Partnering with a great freight forwarder that you trust can give relieve a lot of operational stress and ensure your products get to your customers on time. You can rely on them for knowing the shipping laws and arranging for the correct duties to be paid.
Freight forwarders are companies that arrange and coordinate shipments for their customers. They help you with importing and exporting goods by acting as an intermediary between the actual transport companies.
Companies will often utilize freight forwarders if they have product manufactured overseas, say in China, and that product needs to be shipped to be sold in the United States. Freight forwarders will arrange transport of your pallets or containers to be shipped by air, sea, or truck. Freight forwarders are one of the most widely used services of international transport, used by both businesses and individuals to send and receive large shipments of goods.
The freight forwarders take care of the documentation and legalities associated with moving cargo across borders. They know the ins and outs and the regulations and challenges associated with shipments, which allows them to create a tailored solution when transporting your goods from factory using air or sea cargo, to getting the cargo from port to your warehouse.
Freight forwarding companies work with carriers, customs agents, advisers, insurers and port authorities to ensure that your cargo is delivered to the right destination at the right time. They take the need out of negotiating and coordinating with every one of those points of contact.
They allow businesses to focus on the core tasks, i.e. manufacturing the products, marketing, and ensuring excellent customer service.
Many complex documents and processes rely on your freight forwarding company, making it imperative for you to choose one that works best for you in terms of cost and services provided.
If you don’t want to shop around, you can start with the best freight forward we’ve found, ClearFreight. We’ve had consistently good experience shipping with them in terms of price and customer service. If you want to do some comparisons, head to Thomasnet. They have a large directory of freight forwarders, however finding the one you want to work with can take some time.
Based on experiences from working with other freight forwarders, it seems to be a cut-throat business that runs on low margins. This can cause some bad behavior on their part. Forwarders are always trying to bring in new business, and the only differentiating factors between many them is the price.
The first quote from a new forwarder is always going to seem amazing compared to the quotes you get from your regular forwarder. You won’t be getting these sort of rates forever though.
Below are some strategies to deal with these forwarders, written by a friend of the site who has had more than a decade of experience with importing and exporting components:
"I’ve seen three forms of bad behavior on the part of forwarders:
- Hidden costs that aren’t in the quote but that appear on the invoice when it comes time to pay. The quote should have covered the entire costs involved with the shipment.
- Changed the quoted price after the goods have been collected but before they’ve actually shipped, and then asking you if you want to proceed. If this happens the forwarder should be eating the costs not you.
- Getting an unexpectedly large invoice from a forwarder when asking them to handle a shipment without having received a quotation first. Technically they haven’t really done anything wrong here other than exploit your naivety but it still isn’t very nice.
At this point in my career, I’ve developed a strategy when dealing with new forwarders and try to and align both our interests. The first thing I do is tell them I don’t want to be having to get 3 quotes from 3 forwarders for every single shipment. I’d prefer to trust them to handle our shipments without even having to get a quote first without having to worry about it. I tell them that this is what I want.
I then occasionally call the forwarder on the phone to discuss a booking or some shipment rather than just email. I do this to try to create a personal relationship at the company. I want to be a good customer and I want them to be a good supplier. The personal contact is important for this especially in a field as chaotic as freight forwarding.
If I can build a good relationship with one of the agents I then will generally follow that agent if they change employers.
If I require an especially low price on a particular shipment I will tell them this, and I normally will get it. But I don’t abuse these requests.
I could probably save 5% to 10% on each invoice by sending out three requests for quotes for each shipment but it’s not worth my time or the anxiety of not trusting your shipping agent. This is especially true since I almost always pass the cost of shipping on to the customer as a separate line item. It's just not worth worrying about overpaying for freight by a few percentage points if you are able to pass that cost on. It's more important to not have freight be a source of anxiety or something that needs a lot of your time. Though this advice probably mostly applies to smaller companies as large companies have people employed specifically to deal with the supply chain complexities."
Here are a few characteristics of a good freight forwarding company:
Experience And Network
You’ll hire a freight forwarding company to benefit from their expertise and network of local offices. Make sure that the one you opt for has been providing its service for a considerable amount of time and has a reputation for excellence.
If you are exporting from Shenzhen, China, be sure they have an established presence in your port city. If you're freight forwarder's strengths are exporting from Rotterdam, Netherlands, it won't be much help for your China shipments. Most reputable freight forwarders have an office multiple locations or partner with reliable partner at busy ports.
Get a list from your forwarder of their offices and geographies they service.
Services You Require
Freight forwarding companies offer different services, which means that it may not be operating in a particular niche where you require assistance. Find a full service freight forwarder who has relationships with air cargo, ocean shipping, train, and trucking companies.
For example, if you require a freight forwarder that offers packaging and labeling services, or warehousing and 3PL, make sure that the one you hire offers the value added services you need.
Good Customer Service
You don’t want to hand over precious cargo to a company that does not offer excellent customer service. It will only make operations difficult for you if you can't get a hold of them.
Always opt for a freight forwarder that is willing to answer all your relevant questions to your satisfaction, and can respond in time without delays, which can be crucial in the shipment business. You never know when dockworkers will go on strike or customs delay clearing your product and you need to know your alternative options.
Conduct Market Research
If a freight forwarding company is as good as it claims, it must have references to back its statements. Ask around or look for online testimonials to find out if you’re opting for the right business.
A competent freight forwarder with a steady presence in the market (having years of experience and an extensive network) will always have a clientele that is ready to recommend their services to you. Don’t let a flashy website fool you. These companies are not always focusing on marketing, so you may see some bad websites for great freight forwarders.
While both terms are often used interchangeably, they are not the same.
A freight broker is limited in its services, while a freight forwarder can take over your entire operations related to shipments of goods.
A freight forwarder brings the carriers and shippers and assists in the movement of freight. Brokers act as the sole point of contact between the two and do not offer any logistics services of their own.
It means that they can help businesses find the perfect carriers for transportation since they have a more significant bargaining power during negotiations regarding the rates. The rest of the work, including documentation, packaging, the movement of freights, and more, has to be undertaken by the business itself.
On the other hand, freight forwarders assume responsibility for a significant part of your operations regarding shipments. They prepare the necessary documentation, provide warehouse facilities, and undergo any additional shipment requirements like packaging and labeling on behalf of the shipper.
Furthermore, freight forwarding companies also have FMCSA (Federal Motor Carrier Safety Administration) authority, which means they are allowed to handle shipments across multiple countries.
In short, a freight forwarder reduces the hassle for the shipper, while a freight broker only acts as an intermediary between shippers and carriers and has to outsource work if required.
Hiring a freight forwarding company is an excellent way to set yourself free from the complex requirements of international shipping. It allows you to focus on your core business functions – manufacturing products, developing a reliable IT infrastructure, and marketing to expand operations.