What is a Freight Forwarder?
A Freight Forwarder is like a travel agent for your shipments. They work closely with you, your suppliers, and transportation providers to move your imported and exported goods around the world.
As global business opportunities increase, importing and exporting are becoming critical factors to a company’s success. And businesses are relying more on Freight Forwarders to help with the shipment and delivery of their products. But what exactly does a Freight Forwarder do and what are the benefits of using one?
What Does a Freight Forwarder Do?
A Freight Forwarder facilitates and manages the shipment of goods on your behalf. They do not physically move your cargo, but rather acts as an intermediary between the supplier, transport carriers, and other logistics providers. They offer the following services:
- Selecting and booking the best mode(s) of transport for your shipments;
- 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;
- Arranging 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.
What are the Benefits of Hiring a Freight Forwarder?
1. 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 the changing policies and procedures and ensure your goods are shipped in compliance with international shipping laws.
2. Time & Cost Savings
Freight Forwarders offer a single source for arranging the entire shipping process, from booking transport, arranging pick-up, preparing the required documents, customs clearance, and coordinating delivery to the final destination.
They also ensure your shipments are shipped in compliance with international shipping laws. Following the correct processes and providing the right information ensures your shipments arrive on-time and delays that may disrupt your business operations are avoided. Freight Forwarders can also redirect shipments to avoid delays in the event of unexpected circumstances, such as weather or strikes by ports or carriers.
3. 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 Freight Forwarder
1. 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). Freight Forwarding companies may also be certified as Agents through mode-specific industry associations, such as the International Air Transport Association (IATA). Employees 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 transportation mode.
2. Are They Well-Recognized in Their Industry?
Check to see if the Freight Forwarding firm is a reputable member of major industry associations. CIFFA is the leading authority for Freight Forwarding in Canada. Being a member of an industry association allows Freight Forwarders to obtain professional designations, such as Professional Freight Forwarder (PFF).
Freight Forwarding companies also maintain memberships under international industry associations, such as the International Federation of Freight Forwarders Associations (FIATA).
3. 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. For instance, a Freight Forwarder in Canada may request 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.
4. 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.
5. Are They Tech Savvy?
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.
6. 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.