Despite recent slowdowns, global trade is here to stay. We live in a global society that is connected through technology and allows consumers and businesses to interact with others around the world in real-time. According to Statista, in 2018, the global trade value of goods exported throughout the world amounted to $19.5 trillion. In comparison, this figure stood at around $6.45 trillion in 2000.
Lean inventory practices, facilities closer to customers, favorable trade agreements and technology advancements have contributed to global trade. But risks abound as the supply chain expands – Natural disasters, political unrest, regulatory requirement changes, cybersecurity threats and more.
Trade expertise is needed in an environment that is in constant change whether it’s a change in import duties and taxes, a last minute need for air capacity or a strike at a port that results in the need to shift freight to an alternate location, the response can mean an increase in costs to the shipper, delays to the customer or both if not managed appropriately.
Here at Alba Wheels Up, we have built a legacy of unmatched freight forwarding. So we know a thing or two about freight forwarding and we’re here to tell you a bit more about this service.
What Is Freight Forwarding?
According to the Council of Supply Chain Management Professionals (CSCMP), freight forwarding can be defined as those logistics services “that are provided between the shipper and the carrier, typically on international shipments.” An accounting dictionary takes the definition one step forward by describing freight forwarding as companies that “manage many different cargos from its customers and have control over the whole shipping process to make sure the shipments arrive safely and timely.
In order to provide such a wide range of services they have to develop a reliable network of carriers, insurers, custom agents and advisers to have the ability to deal with all the expected and unexpected issues that can emerge during the transportation process.”
What Is a Freight Forwarder?
CSCMP notes in its freight forwarding definition that freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.
Expanding further via the Random House Unabridged Dictionary, forwarders contract with a carrier or multiple carriers to move goods. The carriers can use a variety of shipping modes, including ships, airplanes, trucks, and railroads. Often multiple modes are utilized for a single shipment. International freight forwarders have additional expertise in preparing and processing customs documentation and performing activities pertaining to international shipments.
Freight Forwarder Responsibilities
A freight forwarder serves as a shipper’s trade expert. Among the forwarder’s responsibilities are:
- Advises and assists shippers on how to move goods in the most cost effective, reliable and quickest manner.
- Utilizes its relationships with carriers including air freighters, ocean vessels, trucking and rail operators in order to negotiate the best possible price to move the shippers’ goods from point A to point B.
- Works with carriers to determine packaging, crating and warehousing needs.
- Fills out and files paperwork to proper authorities such as bills of lading, commercial invoice, certificate of origin, inspection certificate and shipper’s declaration document.
Why You Need a Freight Forwarder
Benefits of Using a Freight Forwarder
Unless a core competency of the shipper is trade management, it is usually advisable to take advantage of a freight forwarder’s expertise. Among the benefits of using a freight forwarder are:
- Freight forwarders are trade experts. They can recommend the best mode of transportation and best routes based on shippers’ requirements.
- Freight forwarders’ expertise allows them to quickly mitigate any issue when they arise.
- There is a cost savings when using a freight forwarder. Since transportation providers transports goods in bulk, freight forwarders can negotiate lower terms with carriers.
- Freight forwarders keep track of the different requirements and regulations of different countries.
What Happens if You Don’t Use a Freight Forwarder
Not using a freight forwarder could result in additional costs and delays. Consider some of the possibilities if a shipper decides to manage their own freight:
- Time spent on shipment bookings and solving such issues as delays or rerouted sea freight shipments means time away from the core business.
- Increase in transportation costs.
- Lack of know-how to identify and manage current and unknown risks as well as understand and implement alternative solutions.
- Not keeping up with the latest Customs duties and taxes in countries the shipper does business in can result in fines and shipment delays.
Choosing a Freight Forwarder
A number of factors go into deciding what freight forwarder to use. Of course, experience is a major factor but also the forwarder’s network and connections. Shippers should make sure their destination countries for goods are included in the forwarder’s network and connections. Also, consider the range of services the forwarder offers. At minimum, the forwarder should offer the following:
- Preparation of import and export documentation
- Packing and storage
- Booking cargo space
- Customs clearance
- Negotiating freight charges
- Freight consolidation
- Customer service
Freight forwarders such as Alba Wheels Up are examples of deep experience and high service levels. Alba Wheels Up has been in the freight forwarding business for over seventy years. The company prides itself as being at the forefront of industry changes for the purpose of driving value to its customers. The company’s service philosophy incorporates two key concepts: ensuring that customers comply with customs regulations; and the coordination and movement of freight in an efficient and timely manner. Learn more about our freight forwarding services here.
Choosing a freight forwarder is a timely process. Ask questions and check references. Ultimately a shipper requires a knowledgeable and trusted supply chain partner that it can collaborate and grow with.
Global trade will continue to play a major role for many economies. However, global trade grows increasingly complicated and riskier despite technology trends. Shippers can overcome these complications and risks by using a freight forwarder. Freight forwarders such as Alba Wheels Up are demonstrated experts in trade matters including the intricacies surrounding import and export duties and taxes, customs requirements and determining the best mode of transportation to use to move freight in an efficient and timely manner.
The benefits of using a freight forwarder outweigh those in not using one. Shippers need a trusted supply chain partner that can handle the freight movements while the shipper handles its business. Choosing the right freight forwarder is key and while there are a number of services that forwarders are expected to offer, the experience, the network and connections of a forwarder are critical for success. At Alba Wheels Up, our freight forwarding service offerings include a wide range of customizable reports and tools to grant client visibility and success. Contact us today to find out more about our expert assistance with freight forwarding.
- Posted by Joe DeSilvetri
- On March 4, 2020
- 0 Comments