Freight Forwarders: Roles & Responsibilities

Freight Forwarding is the strategic planning of logistics and its execution for the transportation of goods or cargo from point of origin to point of final distribution via single or multiple carriers like air, road, rail, pipes, cables and water.

Freight Forwarding acts as an intermediary between the shippers or business owners and the destination of the cargo. It is not restricted to the mere transfer of goods from point A to point B, but much more than that. It involves freight negotiation, container tracking, documentation, freight consolidation, customer relations etc.

Let us have a brief idea about the roles and responsibilities of freight forwarders.

1. Storage/Warehousing:
   Modern day digital freight forwarders provide door-to-door logistic support to the customers. It involves carrying the cargo from the shipper or business owner's premises and transporting it to the final destination predefined by the shippers. This involves temporary storage of the cargo in the dockyard before loading it to the ship and temporary storage before it is set out for the last mile delivery. To counter this problem many forwarders provide warehousing facilities to the customers. Many a time they have their own warehouses otherwise they make necessary arrangements to keep the cargo.

2. Documentation Assistance:
   Freight forwarding involves international logistics and thus requires numerous documentation like landing bill, bill of freight, customs clearance documents, insurance, certificate of origin, commercial invoices etc. It is a tedious task for the shippers to arrange these documents. Hence the freight forwarders assist the shippers to complete the documentation and ease the process of cargo service.

3. Tracking of Shipping Containers:
   Freight Forwarders and logistics companies make use of ultra-modern technologies and software like freight forwarding ERP software, telematics, navigation, container terminal management systems etc. It helps in keeping track of the shipping containers at any given point in time. It gives us detailed information about our shipment's location and position. It aids in determining the expected time of arrival, weather condition and potential delays. Tracking of shipments increases transparency and customer satisfaction.

4. Consolidating Freight and Space Management:
   Many a time shippers have less cargo than entire containers. Hence transportation becomes a costly affair. However, freight forwarders have many such customers with less than container freight. They collect all these small consignments and consolidate them into single containers. Expert freight forwards uses software for managing the space on shipping containers and optimising the available space.

5. Assistance During Insurance Claim Settlement:
   Freight forwarders provide insurance policies to the shippers in case of damage or theft of cargo during transit. Also, they help in claim settlement and documentation in case of any unforeseen events.

6. Negotiation:
   Bargaining for shipping operators for cost, shipping rates, taxes and cesses is a wearisome task for the customers. Here the professionalism and expertise of freight forwarders come in handy. Freight forwarders negotiate on behalf of the shippers and give the best deal keeping in mind the constraints like expected delivery time, space requirements, credit status etc.

There are many freight forwarding services available in the market. One should be very keen while selecting one for your shipping requirements.

How Can I Choose a Freight Forwarder?

Freight Forwarders are companies that specialize in arranging the shipping and logistics of goods from the start to the finish of the supply chain. Because the International supply chain involves so many different processes and parties in different countries, freight forwarders specialize in connecting services to streamline freight movements around the world. Freight forwarding companies are experts that have industry experience and understanding of all of the complex transport and logistics arrangements involved in global trade. They will act on the behalf of shippers to arrange services ranging from export documentation, international sea freight charges, customs clearance procedures, import duties/taxes, port handling fees, local trucking, and marine insurance.

Some Key Considerations in Choosing a Forwarder For Freight

• What level of freight transport coverage is offered?
  A reputable freight forwarder will have extensive coverage to a vast number of destinations, with a wide range of carriers. Through these contacts, the forwarder will be able to provide you with a variety of high-quality service options and prices to meet your supply chain needs, whether you are moving full loads to Europe or part loads to China.

• Does the freight forwarder have a strong network of international freight agents?
  When looking to import or export goods, having access to a network of international logistics enables you to overcome a number of barriers to business that may otherwise cause you difficulties in conducting trade. The freight forwarders overseas agents will provide the local knowledge required, through their understanding of local business customs, languages, and cultural barriers.

• Is the freight forwarder a member of trade bodies or do they hold any accreditations?
  Look for a freight forwarder who is a member of trade bodies. Membership in associations such as FIATA (International Federation of Freight Forwarders Associations), BIFA (British International Freight Association), or IATA (The International Air Transport Association) is a strong indication that the company operates in an ethical manner, and is compliant with the applicable legal requirements. An AEO (Authorized Economic Operator) accredited forwarder brings the added benefits of being able to take advantage of certain simplified customs procedures. An internationally recognized accreditation issued by customs, holders of the AEO status is used to offer secure and efficient supply chain security standards.

• Knowledge and experience is key
  The rules and regulations associated with shipping can be a real minefield. And as for the terminology! Luckily, for a reputable, experienced freight forwarder, understanding and being able to provide the relevant information is second nature, and they will be able to advise you on all of this. Whether working out the best incoterm under which to make your shipment, advising on commodity codes, or confirming all the relevant documentation is in place to ensure a smooth shipment of your goods, your chosen cargo service provider will be on hand to help. If the goods that you are transporting are a little more complex, such as cold chain, hazardous or dangerous goods, look for a forwarder who has specialist experience in these markets. After all, as Einstein once said ‘the only source of knowledge is experience.

• Can the freight forwarder offer flexibility?
  Through knowledge and experience, and a strong network of agents and carriers, your chosen freight forwarder should be able to offer flexibility for your shipments. Whether there is a need to plan shipments around the impact of Chinese New Year or other cultural festivals and holidays, or if suddenly presented with unexpected circumstances such as port strikes, your ideal forwarder will have the capability to offer alternative solutions to enable the smooth transit of your goods.

• Can the freight forwarder offer the provision of value-added services?
  If you’re looking for complete supply chain management, wouldn’t it be favorable to have a ‘one-stop shop for all of your freight and logistics needs? Whilst most freight forwarders are able to handle air and sea freight, rail, and road haulage, are they in the position to be able to provide you with other services such as Customs compliance or 3PL? Being able to utilize the same company, not only for moving your goods from A to B but to the point of delivery to your end user, enables a fluid and unified approach. It also offers you peace of mind, in that, at any stage of the supply chain process, you will know who to go to for any questions or queries that you may have.

• Customer service levels
  Whilst anyone can offer a service, a good company takes time to build relationships and truly understand your business needs. Freight forwarders offer you a dedicated Client Relationship Manager (CRM), providing you with one point of contact who is responsible for handling the whole supply chain process on your behalf. By having a dedicated point of contact there is complete visibility throughout the supply chain. As such, the CRM will have the awareness of any issues that, on the odd occasion arise, and will be able to act upon these, offering solutions to avoid hold-ups in your supply chain, and associated additional costs. When choosing a forwarder you want to be assured that if there is anything that you don’t understand, you can just ask and that you will receive an honest, non-jargon-ridden response. In the dynamic industry of supply chain management, it is imperative to have answers quickly so you need to ensure that your chosen partner is not the type to keep you hanging on for a response.

• What technology is available?
  If you want real-time visibility of your supply chain, employ the services of a freight forwarder who is able to offer real-time online freight tracking systems. A digital freight tracking system provides you access to a wealth of information at the click of a button, 24/7. In addition to providing details of all job bookings, such systems offer a record of key milestones including arrival dates of shipments, dates delivered into the warehouse, and POD for goods delivered to clients.

Conclusion-

Unfortunately, there’s no specific way to know in advance if a chosen freight forwarder will prove an ideal partner. You can (and should) do research online, paying special attention to geographical coverage. If you do most of your shipping between the US and Europe, for example, a forwarder that particularly touts its service to and from South America is probably not the right fit. Nor is a forwarder that promotes its global service without an emphasis on any particular region. Of course, you should also ask other shippers for recommendations and interview likely candidates. But in the end, the proof is in the shipping. The only way to find out if a forwarder offers the right expertise and personalized service is to use that provider once and see how things turn out.