5 Tips on How to Choose a Proper Freight Forwarder (Part 1)
Posted on Tuesday, July 8th
In the field of overseas freight forwarding and shipping, the choice of a freight forwarder is just as important as that of a supplier or an accountant. In this modern era where businesses aim at supply chain optimization, cost effectiveness, punctuality and solid services, everyone who is part of the supply chain needs reliable freight forwarders to handle their logistics in order for their business to flourish. So here are five tips on choosing a proper freight forwarder, as well as a number of questions you should answer in advance.
How do importers and exporters find the suitable freight forwarder for their logistics needs?
First of all, it is important to remember that the choice of a freight forwarder does not depend on the size of a business, but on its shipping volume, staff and revenues. A lot of big businesses work with small freight forwarders, just like many small ones work with big freight forwarders. So you need to answer a number of questions and consider a number of criteria in order to make the right choice for your business.
Questions to answer before choosing an overseas freight forwarder
1) What do the incoterms between you and your client or supplier stipulate? What are the liability terms?
2) What kind of service suits you best: a port to port service, a port to door one, a door to port one or a door to door one?
3) What are the start and end destinations of the cargo?
4) What are the cargo size, weight and value?
5) Is your cargo out of gauge or oversize?
6) Depending on the shipping mode, what type of container best suits the size of your cargo?
7) What type of packaging do you use? Are extra packing services or loading services required?
8) Does your cargo contain hazardous goods? If it does, do you have a PSDS to show to your freight forwarder?
9) Does your cargo require any import or export license depending on its end destination and commodity? If it does, how can you obtain it?
10) Do you need any additional services like documentary services, drop and pull ones (in the event of overnight storage), customs clearance and duties paid, commodity classifications, consolidation or deconsolidation services, additional licenses, notices, annual import bonds, in-bond entries, CBP/FDA/USDA exam processing or the like?
11) Do you need repacking, labelling or other services in order to deliver to a fulfilment centre like Amazon.com?
12) Do you prefer ocean freight shipping, RORO shipping, breakbulk shipping, air freight shipping or other shipping services? Are intermodal shipping services more suitable in your case?
5 tips on choosing a proper freight forwarder
1) Identify your needs.
Only begin your search of a freight forwarder after you have done this. Check out what additional services you need, what form of transport best suits your needs and calculate your shipping volume before you approach a freight forwarder. Be prepared when you approach them.
2) Do some prior research on their industry.
You should know what exactly to approach your freight forwarder for, what their responsibilities are and what your responsibilities are. Check out blogs, provisions, industry terms and other materials on the type of shipping you are interested in. What kind of logistics do you need help with?
3) Check whether they can provide assistance with multiple types of shipping.
Let us say that your first shipment is an ocean freight import from China, but your next one is an air freight one from Vietnam or a RORO or breakbulk export to Dubai. You should choose a freight forwarder that has the experience needed and the business partners to assist you with these shipments.
4) Be sure they have the necessary experience.
There are a lot of aspects to consider with international shipping, starting with modes of transport, regulations, commodities or start and end destinations. Therefore, the freight forwarder you choose should have the necessary experience to handle various combinations. Asking them whether they have handled the particular type of shipment you are interested in for another customer is recommended.
5) Check whether they are part of any trade association or profile network.
Freight forwarding associations only accept financially strong, efficient, reliable companies as partners. Therefore, you want a freight forwarder who is part of such an association to assist you with your shipments. Their membership also proves their financial strength because this is one of the requirements of being accepted as a member of freight forwarding networks.
Export conformity
As mentioned earlier, the freight forwarder you choose should have the necessary experience to assist you with your shipments. However, they cannot be held responsible for any conformity issues. It is you who declares the cargo and needs to check whether any export licenses are required. The Simplified Network Application Process Redesign (SNAP-R), for instance, is needed to submit export license and re-export applications, commodity classification requests, exception notices or supporting paperwork to the Bureau of Industry and Security. You should also be familiar with the regulations applicable to your shipments. Otherwise, you might find yourself violating them, which leads to serious consequences.
Tips on export conformity
Remember that the exporter or importer is held responsible for any misdeclared or inaccurate information submitted to US customs even after their shipment has left their dock, being considered the US principal party of interest. The freight forwarder only submits the information provided by them. Declaration related issues can be avoided by providing the freight forwarder with a legitimate shipper's letter of instruction. Familiarise yourself with the regulations applicable to your shipments, as well as with your responsibilities and duties. Shipping novices can find assistance at Common Export Documents.
You should also remember that it is your responsibility to check whether your shipment requires any licenses, authorisations or certificates. Commodity classifications are also your responsibility as well and not your freight forwarder's responsibility.
To conclude, the logistics of your business can only be successful if you choose your business partners properly and comply with export controls. Therefore, it is essential that you do proper research in order for your business to thrive.
