Importance of Freight Forwarding in your Business

Virginia Miller

September 19, 2023

In this article

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Shipping can be a key component of your business's success, and making sure it moves quickly and efficiently is vital. Freight forwarding has become an invaluable service in helping to streamline the process; providing access to reliable cargo tracking services, storage solutions, transportation management and more. With this in mind, let’s look at why freight forwarding is important for businesses like yours to ensure you are reaching customers on time and ahead of schedule.

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What is Freight Forwarding?

Freight forwarding is an integral part of supply chain management. It involves coordinating and handling goods being shipped from one place to another. Freight forwarders manage the entire shipping process, from packing and labeling to customs clearance and delivery. They provide a wide range of logistics services, such as tracking, tracing, storage, consolidation, repackaging, and distribution.

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Why Do Businesses Need Freight Forwarding?

Businesses use freight forwarding services to ensure that goods are transported safely and efficiently from one place to another. With the help of a freight forwarder, companies can better manage their supply chain processes, reduce costs and improve supply chain visibility.

Freight forwarders manage the transportation of goods by sea, air, and land, provide customs clearance services and manage all necessary documentation for shipment. They also coordinate with carriers, supply chain partners, and shippers to offer a one-stop solution for logistics services.

By using freight forwarding services, businesses can optimize supply chains, streamline operations and reduce costs associated with transport and shipping. Freight forwarding is essential to keeping business operations running smoothly.

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Process of Freight Forwarding‍

The process of freight forwarding is as follows:

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1. Search for a good freight forwarder who is having industry and country experience.

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2. Ship your products and goods to the freight forwarder's warehouse. This is also known as export haulage, and it can be done by yourself or use a logistics provider.

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3. As soon as they receive your goods, they will complete some documentation process for customs clearance.

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4. The freight forwarders physically transport the goods using a chain of carriers. Some freight forwarders may also provide updates to you at each stage of the journey.

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5. Finally, when your goods arrive, the freight forwarder provides many documentation and carrier bills to be filled.

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6. After completing all the documentation process, the shipment is then sent to its final destination. This is the last stage of the freight forwarding process and is commonly known as import haulage.

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Services Provided by Freight Forwarders

There are many services that a freight forwarder can provide for your company. These include:

Door to door services

On-demand reporting

Purchase order tracking

Storage

Clearance at customs

Inventory management

Packaging

Documentation (required for international import and export)

Insurance

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Benefits of Freight Forwarding

Optimize their supply chains

From supply chain management to door-to-door delivery, these logistics services improve efficiency and cost savings for businesses. Freight forwarders manage all supply chain operations from customs clearance and warehousing to scheduling, dispatching, tracking, and reporting. They can also provide value-added services, such as consulting on compliance requirements for international shipping. As a result, companies can be sure that their goods will be shipped following regulations in the countries they're being sent to. Moreover, because freight forwarding services can negotiate lower prices with carriers due to their high volume of business, they often offer competitive rates regarding air or sea transportation costs — thus ensuring companies save money in the long run.

Ensure Delivery

An experienced freight forwarder on board can provide peace of mind for businesses that their shipments will arrive safely and on time. Freight forwarders must provide clients with reliable transportation and supply chain management solutions. This includes monitoring supply chains, following up on orders, and notifying customers of any delays or discrepancies in the delivery process. Companies can rest assured knowing that a professional manage their supply chain needs and ensures the safe and timely delivery.

Minimize Risk

Freight forwarding services also help reduce risk by aiding in compliance regulations across borders — including those related to trade agreements and customs clearance paperwork. By familiarizing themselves with the laws of foreign markets, freight forwarders can provide efficient supply chain management services that ensure shipments comply with all regulations. They are also knowledgeable about documents required for customs clearance — such as invoices, shipping notices, and export declarations — helping companies avoid costly penalties due to paperwork errors.

Access to global markets

Partnering with a freight forwarder can also open up access to global markets that may otherwise be difficult to penetrate. Freight forwarders are well-connected in the supply chain industry and have established relationships with carriers, customs brokers, warehouses, and other global supply chain partners. This helps businesses navigate complex supply chains when shipping products abroad — enabling them to reach new customers quickly and cost-effectively.

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Things to Look for When Choosing a Freight Forwarder

To find the right freight forwarder for your company, you must look for the listed things.

Experience and reputation

Choosing a freight forwarder with experience in the specific type of shipping you need is important. It's also essential to check their reputation and ensure they have a good track record of delivering goods on time and within budget.

Services Offered

Freight forwarders offer supply chain and logistics services such as packing, warehousing, distribution, customs clearance, and insurance. Before choosing a freight forwarder, ensure they can provide the service you need for your supply chain.

Industry Knowledge

Freight forwarders manage the transportation of goods from point A to point B. To do that, they need to understand different requirements in different countries, shipping regulations, and industry trends. Ensure the freight forwarder has extensive knowledge of supply chains and global trade regulations.

Costs

It's important to consider costs when selecting a freight forwarding company. Ask about any additional fees or charges and ensure you understand them before signing any agreement.

Technology

An experienced freight forwarder should have a comprehensive IT platform that provides visibility into supply chain operations and tracking information so customers can track their shipments in real time. The more advanced the technology, the better the chance of a successful supply chain operation.

Communication

Good communication between the shipper, consignee, and freight forwarding company is essential to ensure an adequate supply chain process. A good freight forwarder should be available 24/7 to answer questions, provide updates or resolve issues quickly. Ensure they are responsive and offer clear communication throughout the supply chain process.

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Credentials and certifications‍

Certifications and credentials will let you know if they have specialized training to handle your shipments. This is a good indication that proves that they have the required experience for an efficient shipment.

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Satisfactory customer service‍

Outstanding customer service will allow you to have direct access to the agent responsible for managing your cargo. Hence, customer services are essential in freight forwarding.

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How To Prepare Your Goods For Shipping?

Packaging and labeling your goods correctly is an integral part of supply chain logistics. Freight forwarders manage every aspect of supply chain shipments, from the point where goods are picked up to their final destination. This includes ensuring that package preparation and labeling meet the requirements set by carriers before shipping.

When preparing items for shipping, you should consider any special requirements or restrictions stated by the carrier. Packaging and labeling must be done to ensure packages can pass through customs without delay and arrive safely at their destination. Here are some critical steps to prepare your goods for shipment:

1. Package Items Securely - Ensure all items are properly packaged with good cushioning material, such as bubble wrap or foam sheets, to prevent damage during transit.

2. Label Packages - Include your company's name and address, as well as the recipient's information, clearly on the package.

3. Choose Appropriate Shipping Containers - When selecting containers, make sure they are strong enough to withstand stacking, shock, and vibration during transit and protect items from weather conditions.

4. Use Pallets for Bulk Shipments - Pallets and other specialized packaging materials allow you to secure large shipments and increase efficiency when loading goods into a truck or container at port facilities.

5. Consider Insurance Coverage – Depending on the type of goods you're shipping, you should consider insurance coverage in case something happens during transit that puts your items at risk.

With the proper preparation and labeling for your supply chain shipments, you can ensure that your goods will be transported quickly, safely, and without delay. By working with an experienced freight forwarder, you'll have peace of mind knowing your shipments are in safe hands.

Good preparation and labeling help ensure supply chain shipments arrive on time and intact – enabling timely delivery of products to customers while avoiding unnecessary delays or damages. It is essential to work with a reliable freight forwarding partner who can help manage supply chain logistics efficiently throughout the shipping process.

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Tips For Reducing Shipping Costs

Shop around for freight forwarders‍

Finding the right freight forwarder can save you a lot of money on your shipping costs. Freight forwarders manage supply chain logistics services and are responsible for finding the most cost-effective routes to get your goods from point A to point B. Researching and shopping around can help you find a reliable provider that offers competitive rates.

Negotiate with carriers

‍Many significant carriers offer discounts for high-volume shippers, so always be sure to negotiate with them if possible to try and secure better rates.

Consider multiple transportation methods

Depending on where your goods need to go, there may be various modes of transport available—such as air, sea, or land. Researching the different options can help you find a solution that fits your budget.

Reduce packaging

‍Over-packaging can add significantly to shipping costs, so try to reduce the number of materials you use for packaging as much as possible.

Optimize supply chain processes

Optimizing supply chain processes and using technology to monitor shipments can help you identify opportunities to save money on shipping costs. By streamlining supply chain management, you can ensure efficiency across the entire supply chain process, leading to lower shipping costs.

Optimize supply chain visibility

‍Use supply chain management software to improve supply chain visibility and reduce inefficiencies.

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Choose economical shipping options

Choose economical shipping methods such as air cargo or sea freight for large international shipments.

Consolidate shipments

‍Consolidating multiple shipments into one can help you save money on shipping costs. This is especially true if you're shipping to various locations, as it allows carriers to optimize their routes and use lower-cost transportation methods.

Utilize supply chain visibility tools

Utilizing supply chain visibility tools can help you monitor shipment costs in real time, identify potential problems quickly, and take corrective action when necessary. These tools provide visibility into the entire supply chain process, allowing companies to manage their supply chain operations better and reduce shipping costs.

Compare pricing options

Comparing different pricing options, such as flat rate, weight-based, or zone-based shipping, can help you find the best rate for your shipments. Knowing which pricing option suits your supply chain needs can help you reduce costs and maximize efficiency.

Conclusion

If you are looking for a way to improve your business's shipping process, freight forwarding may be the answer. Freight forwarding provides access to reliable cargo tracking services, storage solutions, transportation management and more. This can help you ensure that your customers are receiving their orders on time and ahead of schedule. If you need help reducing shipping costs for eCommerce orders, Simpl is here to help. We specialize in helping businesses streamline their shipping processes and reduce costs. Contact us today to learn more about our services.

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