A freight forwarder, forwarding agent, or a forwarder, also known as NVOCC (Non-Vessel Operating Common Carrier), is a company or a person that helps in organizing shipments for corporations or individuals to get goods from the manufacturers or producers to a final distribution point (can be a customer’s destination or a market).
forwarders are usually firms that specialize in organizing storage &
shipping for merchandisers on behalf of their shippers. They provide a wide
range of services like:
Preparation of shipping & export
Tracking inland transportations
Booking cargo spaces
Negotiating the freight charges
Filing the insurance claims
A freight forwarder usually ships under its own lading bills or air waybills (also known as house lading bills or house airwaybill). The associates or agents at the destination provide deconsolidation, freight collection, and document delivery services.
In simple words, a freight forwarder is a firm
or a company, which organizes your importing & exporting of goods.
Using a good freight forwarder for importing and exporting your goods can make the entire process less stressful.
What Does A Freight Forwarder Do?
forwarder serves as an intermediate between the shipper and the distribution
point. While a freight forwarder doesn’t really move the freight itself, they help
in arranging or organizing different transportation services like:
Ocean shipping for cargo ships
Expedited shipping via air freight
forwarders have established relationships with different carriers, from
trucking companies, ocean liners to air freighters, for negotiating the best
price to move the shippers’ goods via trade routes.
around several bids and choose the ideal path, which optimizes cost,
reliability, and speed.
handle plenty of logistics to ship goods from one intercontinental destination
to the other.
To adhere to
the shipping requirements and export documentation, many exporters use freight
forwarders to serve as their shipping agents. The forwarders advise and assist customers
on how to ship their goods efficiently from one destination to the other.
The broad knowledge of the forwarders on regulations, documentation requirements, banking practices, and transportation costs help ease the process of exporting for many companies.
In this SellerSPEAK video, Tim reveals why hiring reliable freight forwarders is crucial for consistent shipments. WATCH:
What Do Freight Forwarders Offer?
forwarders play a key role in freight transportation. They advise customers
about the important aspects of the supply chain.
services that freight forwarders provide are:
Tracking the transportation
Ensuring that the cargo picks up and
drops on the scheduled time
Negotiating the freight charges
Getting the shipping & exports
Booking the warehouse
Carrying out the cargo insurance
Collecting the freights
They also take
they help with the carrier documentation, lading bills, warehousing, and
Why Should You Use A Freight
One of the
best things about a freight forwarding service is that they can save your time
and energy by offering reliable transportation of your goods for reasonable
that deals in international transportation consider a freight forwarder as an
important asset. Its services are particularly useful when your in-house
resources aren’t well-versed in international shipping processes.
international freight forwarder helps in maximizing your e-commerce business, predominantly
by providing logistics department for your supply chain. Besides helping you to
save time and money, they are also the best investment.
Benefits Of A Freight Forwarder
with the transport carriers directly is great when for in-city or in-state
deliveries. But the case isn’t the same when you are dealing with international
trading & transport.
a firm that gives different freight-forwarding services can be a big advantage.
A freight forwarder offers paperwork, advice, and the guidance required to get
your shipments delivered to the destination.
what the other benefits of using freight forwarders are:
One of the
best benefits of using freight forwarders is that they give competitive costs depending
on the services a business needs.
They can even
lower the prices by making special arrangements with other companies, which need
goods to be sent through the same transport service and to the same terminus.
forwarders do this by evaluating the company’s goods and further, consolidating
them with the shipments of other businesses in order to develop transport idea
that can handle both in a single load. This strategy also cuts down the freight
addition, cargo transportation rates tend to change, mostly on everyday basis, and
this is especially the case when you are dealing with ocean transport. Unlike carriers that tie you up with a contract, a
freight forwarder offers real-time rates for your shipments.
2. Good knowledge about the customs
forwarders have a good amount of expertise and knowledge on importing and
exporting goods via customs services.
the most updated information about the customs rules of several other countries,
helping you take care of all the obligatory paperwork, tariff payments, and
handling other taxes.
these are taken care of, it prevents a business’s goods from being stuck in the
dock. So, there are no more struggles in filing unfamiliar paperwork.
3. Better control
forwarders usually specialize in any one service area, either market or
transportation mode. This enables a business to select how many services should
a freight forwarder handle, giving them more control over how shipments can be
the company’s product type, the freight forwarders will have a clear knowledge
with whom the transport can be booked, what the suitable routes can be, and which
shipping service can do its best job forward.
How Do Freight Forwarders Charge For
comes to freight forwarder charges, there are multiple factors to look into.
Since various elements go into shipping, calculating the actual cost of any
freight forwarding service is not straightforward.
also come across a few freight forwarders that include certain charges in their
upfront quotation whereas others give them as optional add-ons. In certain
cases, a freight forwarder may not give a specific service at all, leaving those
arrangements to be done from your cost.
is vital to get a complete breakdown of what is included in the quote before engaging
with the freight forwarder’s service.
Keep in mind that a renowned freight forwarder won’t
have any issue in providing you the detailed breakup. This will also help you
to make comparisons with other quotes.
Here is a
breakdown of various shipping elements that are to be paid. Now, whether they
are included in a particular quote or not is something you should confirm with the
forwarder you choose.
1. Carrier Cost
want to have your freights shipped by sea, road, or air, the transportation mode
has to be paid for. Generally, sea freights are the cheapest whereas the air
freights are the costliest.
think that the total distance traveled affects the cost – though it may not be
the case. It is not necessary that a bigger distance equals a bigger expense.
forwarders can always negotiate for low carrier charges on popular routes.
2. Container Cost
shipping through the sea, you will be charged in one of these two ways:
FCL – Full Container Load
LCL – Less than Container Load
LCL might be cheaper, especially when you do not have many goods to occupy a
container, which means that you will be sharing the container with other companies’
case, there will be a cost involved while separating the shipments on the
destination point. Likewise, with air freights, your shipments will be packed
into ULD (Unit Load Device), which can either be in the form of a container or
types cost higher to ship when compared to others. Now, this might be because
they need one-of-a-kind container to ship those goods. It could be because they
are perishable items, dangerous goods, or things that require careful handling.
do not fit into standard containers or that require any specialist equipment
(like a crane) to load and unload will be costly to ship.
4. Cargo Volume & Weight
weight and size can together impact the overall shipping cost. A shipment’s chargeable
weight is estimated by converting the total volume into weight equivalent.
So, the chargeable
weight will be the one that is greater, it could be either:
The computed volumetric weight, or
The actual weight
be times when two shipments can have the same weight. In such cases, the one that
occupies excess space costs higher to ship.
5. Packaging & Palletization
While importing & exporting, the goods need to be palletized as well as packed in a particular way for safety. Also, the wood used for Product packaging is subject to the international legislation.
that a few freight forwarders charge additionally for packaging. This is
because the shipments need to be packed with special things. This also ensures
that your goods adhere to the government rules applicable at the terminus. Oh,
you definitely don’t want your goods to be returned to the origin port for
re-packing, as this can be too costly!
your goods uninsured can be vulnerable. Therefore, it is important to protect
your shipments with cargo insurance.
This facility is something that most freight forwarders will offer as an add-on
opt for the service, ask the forwarder if the insurance is incorporated in the
quotation or it is available only as an add-on.
the forwarder does not offer cargo
insurance, you will have to buy it from a broker or an insurer directly.
7. Documentation Cost
will typically complete the necessary documentation, like import & export paperwork, Bill
of Lading, and invoice for you
admin cost for this service will be usually included in the upfront estimate.
Goods that need special paperwork, like restricted or dangerous items, will incur an extra charge.
8. Destination Cost
comes to destination costs, there are multiple aspects involved in the process.
Terminal handling charges
Charges to clear the goods from the loading
& discharge ports
addition, a port might also levy an extra security surcharge. Besides these, other
possible destination costs comprise of:
Unpacking (the cost to split the LCL
Inland haulage cost (if required)
9. Administration Cost
using the freight forwarder services will save you time and the hassles
involved in coordinating, organizing, and managing various elements of the shipping
process. However, the forwarder does not execute this job for free. There will
be an administration fee, which will be a part of the quote. And this is
something you must pay attention to.
10. Additional Surcharges
A carrier can
apply a fuel surcharge to protect themselves from variations in the fuel costs
– which is also known as BAF (Bunker Adjustment Factor).
Besides BAF, it can also charge something called CAF (Currency Adjustment Factor) to guard them from:
War risk surcharges
Peak season surcharges
Demurrage penalty (if there is a delay
11. Additional Services
freight forwarders provide extra services to handle the entire shipping process
from one end to the other – from product sourcing, packaging to unpacking, organizing,
warehousing, distributing, and delivering them to the right customers.
When you compare the quotes of different freight forwarders, it is vital to understand what exactly is included in the estimate so that you can know which quote offers the best value for money.
How To Choose A Freight Forwarder?
are now aware of the basic process of freight forwarders, you will have a
better clarity on what to talk while choosing the best amazon FBA freight
forwarder for your business.
and list a few best freight forwarding services in a paper or an excel sheet along
with their contact details. Look at every company’s website carefully and see
what they offer.
It is best to have a call with the service
provider and look for the following:
1. Check For Delivery Destinations
the company might advertise itself saying that it ships internationally, it
doesn’t really mean that that will cover all the countries.
forwarder will always include accurate information on the website about where
they pick up & deliver to.
this, check if they offer an all-inclusive delivery service – door-to-door service
offer port-to-port, you will be incurring extra costs while booking for road
transportation to finalize the delivery.
2. Available Insurance Options
forwarding company usually offers a standard insurance plan to cover two
there ate additional options available – especially if your shipments are time
sensitive or valuable.
involving solar panels, pricey machinery, antiques, glass, or fragile items must
be packed professionally for safe export. A few items might be excluded on a
freight forwarder’s liability insurance. Therefore, it is important to check.
3. Experience With Amazon FBA
one of the largest retailers in the world, and they have precise requirements
for the items be packaged, labeled, and stored. Yes, you can do this on your
own, it takes plenty of time and there are risks involved. You might end up doing big mistakes, causing rejections from the Amazon
it is important to work with a forwarder who has good experience in handling
Amazon shipments because they will know its requirements and further, work with
the suppliers to meet the criteria.
4. Tracking System
their support team should be available whenever you
want to talk to, it will be more convenient if you can track your packages
freight forwarder what type of tracking tool they use and check if it updates
you in real time or not.
tracking system provides the following:
Purchase Order management
Digital copies of paperwork
Proofs of delivery – online &
5. Packaging Services
contact the freight forwarder, make sure to ask about their packagingservices. Check if there are additional services for it or it is
included with the plan.
forwarding companies supply sealable bags (plastic) for small products and
labels for bigger boxes.
What Are The Key Phases Of Freight
of freight forwarding is categorized into 6 key stages:
Export haulage: This phase involves transferring the goods from source to the forwarder’s warehouse.
Export customs clearance: This phase involves clearance in leaving its origin country.
Origin handling: This phase involves unloading, examining, and validating the cargos against the booking documentation.
Import customs clearance: This is the phase where authorities check for customs paperwork.
Destination handling: This phase is where your cargo is handled after it reaches the destination office.
Import haulage: This is the phase where your cargo is transferred from the warehouse to the final destination.
What Documents Should A Freight
Freight forwarding involves lots of paperwork, particularly when you are shipping overseas. Make sure that your freight forwarder provides you these important documents:
Bill of Lading (BOL) contract
Certificate of the origin statement
List of export packing
Shipper’s export declaration
you have all the documents mentioned above, your goods will reach your customers
without any delay or issue.
About Amazon Freight Forwarders &
If you use a
hand-carrying or freight forwarding service, it is important to pay attention
to the Amazon’s terms & conditions, which include:
Amazon will not be responsible for any
defect, damage, loss, or material difference that occurs to your goods after they
are delivered. This means that Amazon will not provide any refund or
replacement for the goods delivered to a freight forwarder or you.
The goods lost after you or your
freight forwarder receives, will completely be your responsibility.
The goods that arrive in a damaged
condition can be refused at the time of delivery and further, instruct the
freight forwarder to do the same.
If you (or the freight forwarder you
send to) has a U.S. address, buy goods from amazon.com in order to ship them to
any U.S. location.
You (or the freight forwarder) are considered
as the exporter. Therefore, you are accountable solely for compliance with
export & import rules of the destination country.
Amazon shouldn’t be mentioned on any
of the export documentation (example: invoices, export declarations, air
waybills, packing lists, etc.).
If you (or the freight forwarder) don’t
have a U.S. address, you (or the freight forwarder) cannot export the items
without Amazon’s written authorization.
About Customs, Duties, and Taxes
recipient or the receiver is the importer and should comply with every law and rule
at the destination country.
are shipped outside the U.S. are subject to:
Fee levied by the respective country
of the international shipment might be subject to these charges, which will be
levied after the consignment reaches the receiver’s country.
recipient should fulfill any extra charge incurred during the customs
clearance. Amazon will neither fulfill these charges nor it can predict what
the charges may be.
The customs policies differ widely. Therefore,
it is important to contact with the local customs office for proper information
on clearance procedures and causes in the delay.
The customs offices of certain regions or countries require the importer’s record to give an identification form before they release the shipment.
You might be asked to give your identification number like UIN (Unique Identification Number), Tax ID, or CPF for this purpose.
Regions/countries that ask for identification number include Chile, Brazil, Ecuador, China, Israel, India, Qatar, Peru, South Korea, South Africa, Turkey, and Taiwan.