If you have been a part of the online market for some time now, you must have come across terms like freight forwarder. For anyone who has just joined this industry, understanding what is freight forwarder or what their role is can be quite tough.
To put it simply, freight forwarding is the act of strategically planning logistics and ensuring efficient execution for the international movement of goods for the supplier. Typically, a freight forwarder will carry out all associated rate negotiations, keep track of containers and documents and consolidate the freight.
Role of a Freight Forwarder
There are a lot of tasks that a freight forwarder must look after to ensure a smooth and efficient shipment. Here is what you can expect from a capable freight forwarder from Alibaba:
- Shipment Tracking:
This is perhaps the most important task any freight forwarder is expected to help with. They often have access to a Transportation Management System that allows better visibility through each stage of the shipment.
- Customs Brokerage:
Secondly, forwarding always requires proper licensure, which in this case, is a customs brokerage license. Licensed brokers are the only professionals qualified and allowed to manage the documentation required to complete any such shipment.
While many forwarders have their own warehouses where they harbor the commodities, that is not always the case. Other times, it is the forwarder’s responsibility to arrange a storage facility, preferably operated and owned by a local affiliate.
Negotiating a fair shipping rate is quite important but can be a challenging task. All freight forwarders are trained with this skill. They understand that they have to make the deal lucrative enough for the carriers as well and eventually make it sound profitable to them. Forwarders often reach a conclusion after considering the pros and cons of the cargo type, credit status, time flexibility, space requirements, etc.
- Cargo Space Scheduling:
Proper cargo space scheduling and coordination are probably where a freight forwarder is needed the most. Only a thoughtful planner can understand how profitable consolidating a shipment, securing timely sailings, and finding feasible intermodal shipping options can be. A freight forwarder hired to manage logistics can help you with precisely that.
- Consolidating Freight:
Freight forwarders often work with a number of clients at once. While some of them have heavy shipments which require the space of a full container, the majority do not. You will often find freight forwarders offering freight consolidation services for less than container load shipping. In such a case, a number of smaller consignments are all shipped to the foreign location in the same containers. The shipping costs here get divided amongst all participating clients based on their space requirements.
- Supplying Cargo Insurance:
With such long distances, any mishap is always plausible. Forwarders will cover you here by providing an insurance policy in case of any damage or theft. However, you should know that the reimbursement is not processed for tangential loss. For instance, if the container falls and damages other surrounding structures, they will cover the loss you incurred for the contents of the container, but not the surrounding structures.
These are some reasons why hiring a freight forwarder can be essential.