Logistic strategies must do more than just plan and execute the movement of freight within a specific country. Raw materials, components, works-in-progress, and finished products also travel among manufacturing plants, warehouses, distributors, and end customers around the world. However, every country has different requirements and standards that must be adhered to depending on the type of freight that is shipped.
When shipments must travel internationally, every item needs the proper documentation to move between countries. Here is where a freight forwarder can help.
An international freight forwarder ensures that supply chains are not hindered when shipping freight to other countries. Understanding what this process entails — and why you may need a freight forwarder if you have global customers and clients — can help you optimize your supply chain capabilities.
FREIGHT FORWARDING BASICS
Freight forwarding is a process that handles the shipping and receiving of goods from other countries. A freight forwarder schedules, plans, and executes logistical strategies so that all products are shipped and received by specified deadlines.
One thing to keep in mind is that a freight forwarder does not handle the physical transportation aspect of shipments. They do not own or operate trucking fleets, air cargo companies, ocean freighters, or railyard operations.
Instead, the freight forwarder handles the logistical details of the cargo’s movement. They act as an intermediary between transportation services and shippers to find the most cost-effective routes at the best rates. Depending on how far the shipment must go, the freight forwarder may work with several carriers offering different modes of transportation to get the shipment traveling through many countries.
The basic freight forwarding process includes:
- Customs brokerage/clearance: A customs broker handles the clearance of shipments that will travel between countries, specifically the import and export documentation. This person must have special licensing and certification to work with customs authorities.
- Negotiations: A freight forwarder will negotiate prices with carriers to get the ideal price for shipments based on size, cargo type, destination, and other factors.
- Obtaining freight insurance: Freight insurance policies can help protect the shipper if goods become lost, stolen, or damaged during the trip. Many forwarders will offer policies with a range of terms and conditions. You will need to evaluate each policy to ensure it will work for your needs.
- Cargo scheduling: A freight forwarder will plan everything regarding the movement of the shipment. They will determine if shipments go out separately or will be consolidated along the route. They will also determine the times that shipments will be on the transportation route. They figure out the best intermodal shipping options so that each carrier is ready at the right time to receive and transfer shipments.
- Shipment consolidation: Shipment consolidation can sometimes help lower transportation costs. A freight forwarder may have several consignments going to the same destination, so they can plan for the smaller shipments to be packed together in the same container. This spreads the shipping costs among multiple customers so each gains better cost-savings.
- Shipment tracking: Knowing where the shipment is at all times allows a freight forwarder to make changes en route. This is especially important because there may sometimes be a delay if the shipment is traveling using different modes of transportation or if there are issues when entering certain countries. A freight forwarder will typically use a transportation management system (TMS) when tracking shipments.
- Warehousing: A few freight forwarders will also offer warehousing services if they own warehouses. Otherwise, they will make arrangements with a warehouse storage owner to hold the shipments.
FREIGHT FORWARDING STAGES
There are specific stages of freight forwarding. Understanding these stages should allow you to plan what cargo will ship internationally and at what deadlines.
- Export Haulage: This process involves the shipping of freight from the sender’s location to the freight forwarder’s origin warehouse.
- Items Checkpoint: The shipment is received and inspected to ensure everything is in order.
- Export Customs Clearance: Documentation of the shipments is submitted to customs authorities so the freight can leave the country of origin.
- Import Customs Clearance: Customs authorities at the destination country will check import customs documentation when (or even before) the shipment arrives so the freight can enter the country.
- Arrival and Handling: The freight forwarder receives and handles all documentation — such as the carrier bills — as the shipment moves to the destination warehouse.
- Import Haulage: The freight is transported from the destination warehouse to the final recipient.
Depending on the types of products that will be handled, not every company can use freight forwarding services. Some freight forwarders may not handle restricted or prohibited goods that cannot enter certain countries. The list of goods will vary based on the country, including toxic, flammable, or explosive items.
WHY DO YOU NEED A FREIGHT FORWARDER?
Freight forwarding is essential when a company is looking to ship goods among countries. A good freight forwarder has formed partnerships with carriers from a range of countries, allowing them to compare shipping rates so the cost savings can be passed down to the customer. Many freight forwarders can also provide extra services such as cargo insurance to help protect your shipments and cover unforeseen expenses.
Additionally, a quality freight forwarder should be up to date regarding changing import/export laws and trade agreements among countries. They often handle all the required documentation for the shipment to be moved to other countries while picking out the most suitable routes.
WSI FREIGHT FORWARDING SERVICES
There are many processes involved when moving international shipments. When seeking an international distribution strategy for imported and exported products, WSI offers global freight forwarding services. We can handle all the details from the start of the shipment’s journey to its destination. Contact WSI to learn more.