How do shipments get sent around the world? The answer is simple and often misunderstood, but it happens with the help of forwarding services.
In fact, the demand for forwarding services is at an all-time high, pushing the industry towards a projected $207 billion by 2021, notes PR Newswire. Now, freight forwarding services help organize shipments from the manufacturer to a market, the customer, or its final distribution point.
An international freight forwarder can provide additional expertise regarding the critical details needed to prepare and process customs clearance shipments.
How Does International Freight Forwarding Work?
After the international freight forwarder establishes the client’s credit, they will collect the additional information that they need, like the mode of transportation, the cargo weight, and the dimensions of the freight.
They’ll also need the rates and the documentation, at which point the forwarder will create the House Bill of Lading and the Master Bill of Lading. This is done as a way to schedule the transportation and ensure that the goods clear customs, as well as have a mode of transportation at the border so they can be delivered.
What Does an International Freight Forwarder Do?
Forwarders utilize global agents and handle supply chain management to coordinate the details between international sellers and buyers. This dynamic ensures a smooth process.
International freight forwarders handle the scheduling, coordination, and documentation that is needed for cargo to pass through customs clearance regulations. This process requires attention to detail and a continuous view of what’s happening within the market as well as the demands on container shipping.
What Skills Does a Freight Forwarder Need?
A freight forwarder must have the proper licenses for international transportation, such as Transportation Security Administration (TSA), International Aircraft Transport Association (IATA), and the Federal Maritime Commission (FMC). Plus, they need to know the regulations and adhere to them.
Additionally, they need a strong suite of technologies, including big data analytics platforms like FreightWaves SONAR, to stay informed and make sure that all rates are competitive, not to mention accurate for each O/D pairing. Forwarding also relies on strong shipper-carrier relationships, too.
Why is a Freight Forwarder Important?
For international shipments, freight forwarding services can provide knowledge in ways that will help coordinate cargo in a seamless manner. Forwarders can offer a range of services to act as an intermediary for loads for planning and logistics.
What Documents Do International Freight Forwarders Need?
The documentation needed includes commercial invoices, bills of lading, customs invoices, carrier waybills, certificate of origin, and permits.
What Are the Different Types of Freight Forwarding?
Besides international vs domestic forwarders, there is air cargo, ocean freight, rail, and roads. Each type of freight will have a different mode of transportation, such as airplane, cargo ship, train, or truck.
Example of an International Freight Forwarder
Let’s take a look at an example. Say there’s a company that wants to use a U.S. freight forwarder to move goods from the U.S. to India. The company must understand the regulations for the goods to pass customs clearance and arrive at the final destination.
Here are some more examples of situations in which a company would want to leverage a forwarder’s services:
- When shipping cargo out of the country
- Upon receiving cargo from out of the country
- When the cargo has to go through customs
- When sending shipments across the country
For reference, some of the most well-known freight forwarders in international logistics include Kuehne + Nagel, Sinotrans, DHL Supply Chain & Global Forwarding, and DB Schenker.
Things to Consider with International Freight Forwarding
Choosing the best international freight forwarder can provide an enhanced supply chain management system when shipping through customs. Keep reading to learn more about the essential credentials to consider when searching for the best freight forwarding companies.
Experience
Using freight forwarding companies that have the expertise, experience, and knowledge will ensure that shipping issues are handled quickly. Whether it’s regarding port shutdowns and rerouting or customs clearance and warehousing, experienced international freight forwarders will be able to handle the problems very quickly.
Global Agents
Freight forwarding companies have a network of carriers, shippers, port officials, and various other forwarders to minimize delays, provide the best quote, and overcome inevitable obstacles that can arise.
Scheduling
International freight forwarders can handle the careful coordination required between all entities involved in the supply chain. This includes, but is not limited to, a wide array of suppliers, manufacturers, carriers, and warehousing providers.
Range of Services Offered
The freight forwarders handle international import and export documentation, customs, packaging, the storage of goods, insurance pertaining to freight loads, and inventory management.
Relevant Credentials and Certificates
Credentials and certificates can inform the client that the international freight forwarder has the specialized training and security requirements necessary to handle the cargo. It also lets clients know that the freight forwarder is able to manage the requirements of international shipping.
Storage and Warehousing
As part of their freight factoring services, companies will provide warehouse space in the country of origin and destination for their clients. Additionally, ensuring that the goods are insured and housed in a climate-controlled safe area is prioritized.
Legalities
Freight forwarding companies must know and understand the legalities of both the country of origin and the destination of the freight.
Advantages of International Freight Forwarding
An international freight forwarder can provide you with vital services while being cost-effective and flexible. The company should be able to offer a guaranteed arrival time as well, while also handling the regulations and the process of customs clearance.
Disadvantages of International Freight Forwarding
While there are many advantages to an international freight forwarder, you have to be comfortable relinquishing control and letting someone else manage the shipment. A freight forwarder can provide you with essential services, but it will also increase the price of the shipment.
International vs Domestic Freight Forwarding
To decide if an international vs domestic freight forwarder is in your best interest, or if a U.S. freight forwarder is the right solution for your company, take a look at where the goods are shipped from and where they need to go.
International Freight Characteristics
Handle the travel details for shipments going through customs clearance. Make sure you know the laws and the regulations of different countries as well. An international freight forwarder can provide you with the necessary services to manage international transit. Plus, they’ll help you understand the planning and communication required for your freight to cross borders.
Domestic Freight Characteristics
Freight forwarders often specialize in intra- and inter-state transportation for shipments and loads needing to be transported closer to home. Freight forwarders can offer their assistance as it pertains to other modes of transportation if existing carriers lack capacity.
Learn About International Freight Forwarding and Logistics With FreightWaves
International freight forwarders can provide assistance and expertise in terms of supply chain management. Read more about cash flow solutions and financing on our blog.
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