What Is a Freight Forwarder?

Freight forwarders are the logistics experts who orchestrate shipments across air, sea and land. They ensure that goods are properly documented for export and meet all international requirements, before liaising with carriers to arrange transportation.

They leverage their global networks of carriers to negotiate the most cost-efficient routes for businesses. They also handle the complicated documentation required for shipping internationally and offer warehousing services like bonded warehousing.

Logistics

Today’s consumers expect — dare we say demand — on-time deliveries of their products and services. Companies that deliver on these expectations enjoy higher customer satisfaction ratings, and thus a more competitive edge in the marketplace. This advantage can translate to new sales opportunities down the line.

Logistics providers help their clients achieve these benefits by offering a wide range of value-added logistics forwarder logistics services, including cargo consolidation, insurance, documentation management, and shipment tracking. By integrating these services into logistical operations, companies can improve efficiency and enhance their customers’ experience.

In the world of global supply chains, freight forwarders act as choreographers – they orchestrate the movement of goods from one location to another, ensuring that their final destination is reached in an efficient manner. They book and coordinate cargo space on a carrier’s vehicle – whether by truck, train, or plane – and manage export documentation to ensure that the company’s shipments meet international shipping regulations.

They also negotiate shipping rates with carriers, leveraging their connections to secure cost-efficient quotas and discounts. For example, ecommerce furniture maker Sit Still enlists the help of a third-party logistics (3PL) provider to move its comfy chairs and couches from China to its U.S. warehouse. Because these shipments can weigh up to 150 pounds, the 3PL evaluates Sit Still’s shipping options and finds that it makes more sense for the company to use ocean freight than air cargo, based on the cost and transit time.

Customs

The customs services offered by logistics forwarders are critical for international shipping. They help you navigate the complex rules and regulations of each country and manage all of the documentation needed to complete the process. They can also help you calculate duties and taxes accurately to avoid delays and additional costs. They are often affiliated with professional organizations that require strict standards for membership. This demonstrates that they stay up-to-date on industry news and are committed to best practices.

The logistics forwarder will oversee your shipment’s entire journey. After pick-up, they will transport your cargo to the departure point and prepare it for its international trip. They will then book and coordinate cargo space with carriers, either by air or ocean. They will also handle all of the paperwork involved in the process, including a bill of lading that legally binds the shipper and carrier. They will also ensure that your shipment is in compliance with all local customs regulations.

The final destination will be an import warehouse where the freight forwarder will store your cargo until a carrier arrives to transport it to its final destination. They will also handle all of the requisite import customs clearance and commercial invoices.

Transportation

As an intermediary between exporters/importers and transport carriers (air freighters, trucking companies, rail freighters and ocean liners), a logistics forwarder utilizes their ‘black book’ of trusted contacts to negotiate the best rates for cargo shipments. They often work with a Hub-and-Spoke model: collecting goods from multiple origins in one city, then moving them to another using established commercial routes at set rates.

Freight forwarding services also prepare and manage the necessary documentation for international shipments, including commercial invoices, bills of lading, packing UPS courier service lists and customs declarations. In addition, they oversee the entire process of export and import customs clearance, ensuring that local regulations are followed.

They are capable of handling any size shipment, no matter the size or destination. They can arrange air, ocean, trucking and customs services as well as warehousing and other value-added logistical solutions. They are able to offer competitive shipping rates by consolidating customer loads into larger, more economical shipping containers. They can even take care of customers who don’t have enough goods to fill a container, offering LCL shipping (less than a full container load).

A logistics forwarder takes the worry and hassle out of managing the transportation of goods. With a single point of contact and consistently high level of service, customers can grow their business by putting more time into sales, marketing or other value-adding activities.

Warehousing

During the warehousing process, forwarders work with logistics service providers to manage storage and distribution services. This includes receiving shipments at the warehouse, shipping goods to customers and managing inventory levels. Logistics companies can also provide a range of transportation services such as trucking and air freight.

For example, a furniture company named Sit Still uses a logistics provider to help it import and ship its products. The logistics firm receives and stores the furniture in its warehouse and then delivers it to the client using LTL freight shipping. This ensures that the company gets the best value for its transportation costs and provides a high level of customer service.

Freight forwarders also have experience in arranging and handling customs clearance. This involves preparing documents, ensuring compliance with international trade regulations, and facilitating the shipment process. They can also arrange cargo insurance and determine the optimum shipping route for each order.

The forwarders use their knowledge of the market and carrier capabilities to negotiate low shipping rates. They can also consolidate multiple shipments into one container, which cuts transport costs and delivery times. They may also have their own public or private warehouses where they can store shippers’ commodities for the duration of the shipping process. This is a more affordable option than renting space at a warehouse.