What is a Freight Forwarder?

As opportunities for doing business internationally increase, importing and exporting are becoming critical factors to a company’s success. However, many businesses do not have the in-house resources to manage all of the activities associated with shipping internationally. Therefore, they rely on a Freight Forwarder to arrange for the shipment of their products to the final customer. But what is Freight Forwarding? And what does a Freight Forwarder do?

In essence, Freight Forwarding is the coordination and movement of shipments around the world via air, ocean, and land transportation. Think of a Freight Forwarder as like a travel agent for your goods. Working closely with clients, suppliers, carriers, and other logistics providers, a Freight Forwarder plans and arranges the safe and efficient transportation of goods from the supplier to the customer or final destination.

In this post, we look at the roles and responsibilities of a Freight Forwarder and the benefits of hiring one to assist with your international shipping.

What Does a Freight Forwarder Do?

Overall, the role of a Freight Forwarder is to facilitate and manage the shipment of goods on your behalf, including:

  • Selecting and booking best transport modes (air, ocean, ground) to ensure on-time and cost-effective delivery;
  • Negotiating freight rates with carriers;
  • Consolidating shipments;
  • Arranging for packaging for the protection and safe handling of your goods;
  • Reviewing, preparing, and submitting shipping and export documents;
  • Arranging special transport, such as charters for time-sensitive or over-dimensional shipments, and on-board couriers (hand-carries) for urgent packages;
  • Coordinating cargo surveys;
  • Arranging for cargo insurance and damage claims inspections;
  • Tracking the shipments and providing updates to clients;
  • Providing integrated logistics services, such as export packing, customs clearance, warehousing, and local transport to final destination.

It is important to note that a Freight Forwarder does not physically move your cargo; they act as an intermediary between the supplier, carriers, and other logistics providers to deliver the goods to the buyer.

What are the Benefits of Hiring a Freight Forwarder?

In-Depth Knowledge and Expertise

International shipments often involve more than one mode of transport. Multimodal and intermodal shipping require an understanding of the various transport modes (ocean, air, ground) and the rules and regulations applicable to each mode.

Freight Forwarders are knowledgeable in the legislation related to each shipping mode and type of shipment (e.g. Dangerous Goods) and experienced in selecting the most efficient and economical routes. They stay on top of changing policies and procedures and ensure your goods are shipped in compliance with international shipping laws.

Time & Cost Savings

Many importers and exporters do not have the in-house resources to manage all the activities associated with shipping internationally. Freight Forwarders offer a single source for arranging the entire shipping process, from negotiating rates with carriers, booking transport, arranging pick-up, preparing and submitting required documents, reporting to customs, and coordinating delivery to the final destination. Outsourcing your shipping process can free up time and resources, allowing you to focus on your core business.

Freight Forwarders also ensure your shipments are imported and exported in compliance with international shipping laws and the rules and regulations of the origin and destination countries (e.g. customs, documentation, and packaging requirements, etc.). Following the correct processes and providing complete and accurate information ensure your shipments arrive on-time and delays that may disrupt your business operations are avoided. A Freight Forwarder can also redirect shipments to avoid delays in the event of unexpected circumstances, such as weather or strikes by ports or carriers.

Due to the large volume of cargo they handle, Freight Forwarding companies have contracts with carriers and other transportation providers that allow them to negotiate better freight rates on your behalf.

Streamlined Supply Chain

In addition to forwarding, many Freight Forwarders offer a full suite of international trade and logistics services. Companies that provide integrated services – such as customs brokerage, warehousing, local trucking, etc. – offer expertise in all areas of international trade and can provide efficiencies all along the supply chain.

How to Select a Forwarder

Are they licensed?

In Canada, there are no licensing requirements to set up a Freight Forwarding business. However, Freight Forwarders are generally members of the Canadian International Freight Forwarders Association (CIFFA). To become a member, the company must be well established within the freight forwarding industry and demonstrate they meet a number of conditions. Employees of Freight Forwarding companies who handle specific types of goods (e.g. Dangerous Goods) must be adequately trained and maintain certifications under Canada’s Transportation of Dangerous Goods (TDG) Act and Regulations for each mode of transport.

Freight Forwarding firms may also be certified as Agents through mode-specific industry associations, such as the International Air Transport Association (IATA), verifying that they have met professional standards to handle international cargo.

Are they well recognized in their industry?

Check to see if the Freight Forwarding firm is a reputable member of and in good standing with the major industry associations. CIFFA is the leading authority for Freight Forwarding in Canada. Being a member of an industry association like CIFFA allows Freight Forwarders to remain current on international transportation topics and trends and maintain professional designations, including Professional Freight Forwarder (PFF) – the highest designation in the industry.

Freight Forwarding companies also maintain memberships under international industry associations, such as the International Federation of Freight Forwarders Associations (FIATA), and hold designations under transport-specific organizations, such as being an Agent under the International Air Transport Association (IATA).

Do they have a strong network of international agents?

Freight Forwarding companies rely on a worldwide network of agents to assist with international processes and procedures, language, and cultural differences. For instance, a Freight Forwarder in Canada may require the help of an agent in Germany to arrange for the unloading of an ocean shipment arriving in Hamburg. When choosing a Freight Forwarder, ensure they have solid representation by approved agents and suppliers in the countries to which you are shipping.

Do they have experience?

International shipping is complex. Ensure your Forwarder is an established business with experience in providing the services you require. Ask if they have experience with the goods you will be shipping.

Are they tech savvy?

In a world where everything is going digital and sustainability is key, it is important that the Freight Forwarder you select uses the latest technology. Current logistics software allows the freight forwarder to communicate with clients, carriers, and other logistics providers to provide shipment tracking and real-time reports on the status of the shipment. Some forwarders also maintain an Electronic Data Management System (EDMS) that allow for better reporting and quick access to your shipping documents, records, and invoices.

Do they offer integrated logistics or value-added services?

Freight Forwarders that offer integrated services, such as export packing, customs clearance, and warehousing, understand all facets of the supply chain and provide added value through increased efficiencies, decreased costs, and a single point of contact for all of your international shipping needs.

Choose PF Collins

Learn more about our Freight Forwarding and Project Logistics services or contact a PF Collins office today for assistance with your international shipping needs or to request a quote.