Article by Patrik Berglund, Co-founder, Xeneta. About the author: Patrik Berglund’s love for logistics and sea freight powered him to venture out to form www.xeneta.com with his colleagues Thomas Sørbø and Vilhelm Vardøy. Their vision is to make the shipping industry more transparent by bringing big data to the table.
For companies that conduct international trade, freight forwarders are one of the most important business relationships you will have. Importing and exporting regulations can be complicated and every country has rules that must be followed in order to conduct trade. Good freight forwarders can simplify this process, handling all of the details of moving your goods into or out of a country. However, not all freight forwarders are equal. In fact, the reality is that anyone can contact a shipping company for a quote and then resell the shipping service to buyers. The benefits provided by great freight forwarders can only be eclipsed by the complications, frustrations, and potentially severe losses resulting from using a substandard one. Therefore it is important to find a serious and reputable freight forwarder in order to ensure that your cargo reaches its destination properly, legally, and safely, and on time. Taking the time to thoroughly learn about different freight forwarders will help you pick the best one for your needs.
What questions should I ask?
Start by learning as much as you can about each prospective company. How long have they been in business? What is the size and experience of their staff? What are their business hours? What is their reputation in the industry and can they provide you with references to verify that reputation? How financially secure are they and can they provide you with documentation to prove it? Are they licensed and insured? What countries do they service? What is their weekly shipping volume? Do they specialize in specific types of cargo? Are they certified to handle hazardous materials? How are their prices calculated and what type of business models can you choose between? What additional charges might you incur? Do they offer any discounts or guarantees? What is their percentage of on-time deliveries? How do they handle customer service? What kind of support services do they offer? Serious freight forwarders will provide this information without hesitation. You should choose an established, financially secure company that has a good reputation and good references. They should be properly licensed and carry liability insurance as well as offering cargo insurance.
Provide them with the necessary information
At the same time, the freight forwarder will need information from you in order to provide the appropriate services. You should be prepared to provide contact information for your company and your buyer/seller, product information including any special handing or other instructions, export/import licensing information, cargo volume, and any documentation or other information specific to your business or cargo.
Make sure they can handle your cargo
Make sure that the freight forwarder can handle the cargo you will be shipping. Many products have specific regulations that must be followed and documentation requirements that must be met in order to import/export them. The freight forwarding company you use should be knowledgeable and experienced in handling your cargo, including all of the regulations and documentation requirements for both the origin and destination countries.
Freight forwarders + shipping companies = true
Serious freight forwarders will have contracts with multiple shipping companies. This allows them to better provide on-time shipping. This is especially important during peak season when ship cargo space is limited - some freight forwarders have slot allotments for such periods and can offer guaranteed space. If your forwarder has more than one option of shipping providers to choose from, then there is a greater chance of getting your cargo on board a ship. They should also have a global network of local agents or local offices at all of your origin and destination ports. This ensures the proper flow of information, allowing you to know where your cargo is at all times and ensuring that you and your suppliers/customers can access the cargo easily and in a timely manner.
At some point in time you may need warehousing facilities, either at the port of origin, port of destination, both or at any other relevant location in your supply chain(s). Serious freight forwarders will be able to provide warehousing as an additional service as well as distribution services - when and where you need it. Make sure the warehouses are bonded, if needed, and ask about the on-site security as well as any other needed facilities.
Communication is key
A high level of communication and customer service is another thing serious freight forwarders should provide. Will you receive personalized attention from a single individual who is handling your cargo or will you have to call and wait on hold for the first available person who may not know anything about you? Your shipping rates should be provided in writing, clearly explaining all charges, discounts, guarantees, and timeframes. If you are unfamiliar with anything on the rate sheet, ask the forwarder. A good company should be happy to explain it. If you are new to the shipping business your freight forwarder should be willing to work with you and help you learn how to properly prepare any necessary paperwork. They should also provide you with regular updates on changes in foreign government regulations which may affect your future shipments.
Remember, freight forwarders are your shipping partners. They should have a genuine interest in ensuring that your cargo is shipped properly, safely, and on time. Before selecting a freight forwarder, make sure to learn all you can about their business. Always remember, if you aren’t completely comfortable and satisfied with your freight forwarder, find a different one.
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