Freight Forwarding: Advantages for your business

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As a wholesaler or manufacturing company with ambitions to grow and expand, it can be a headache to work out how to deal with the number of shipments required to fulfil customers needs. If viable, larger companies have the opportunity to grow their in-house shipping team, but smaller businesses may be left unable to fund this. This is where freight forwarding could save the day!

If you need to move freight internationally, a freight forwarder will identify the appropriate routes and transport modes such as ocean shipping or cargo ships, road transport, or expedited shipping by air freight, that work for your business. Many companies get confused between freight forwarding and third party logistics as they provide similar benefits; however it typically depends on the services they offer and at what cost that differentiates the two.

What is a Freight Forwarder?

A freight forwarder is a company that organises shipments on behalf of an individual or cooperation to get goods from the manufacturer to a customer or final point of distribution.

What does a Freight Forwarder do?

1. Customer clearance:

This information is needed to enable goods to pass through customs.

2. Insurance

This will be required to protect your goods during transit.

3. Inventory Management

This is to ensure that the correct items are collected, securely stored and delivered.

4. Documentation

Documents such as Bills of Lading or Airway Bills may be required by the bank in order to release payment for the goods.

5. Negotiating freight charges

As freight forwarders ship a high number of goods they tend to get a better rate for transportation on your behalf.

6. Warehousing

With the ability to run their own warehouses in several locations, freight forwarders are a great investment. They can even lease space in locations that they don’t service themselves.

7. Booking cargo space

Freight forwarders have the knowledge to know which carriers are the best at serving which location, so can handle the booking of cargo space for you.

Advantages of using a Freight Forwarder:

Using a freight forwarder whether directly or via your transport and logistics company can save a lot of time and allows you to concentrate on other areas of the business.

Other benefits include:

• Logistics industry knowledge
• Global network of freight forwarding agents
• Leverage volume to reduce costs

Disadvantages of using a Freight Forwarder:

As long as your business is in a financial position to use a freight forwarder then there are little disadvantages. The two main issues you could face are:

• Loss of control over shipments
• Unregulated in different countries

Is a Freight Forwarder right for your business?

We have summarised the main advantages of using a freight forwarder and also highlighted the disadvantages that could pose a risk to the service your business provides.

It makes sense to use a freight forwarder if you are shipping to locations that you currently don’t have the resources to see the process through successfully. However, depending on your customer base, it might be better to look into the benefits of using a 3PL provider as an alternative.

Are you a supply chain and logistics professional looking for a new role?