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Freight Forwarding Explained & Role of a Freight Forwarder

Moving goods between countries involves various export and import regulations of the concerned countries and requires complex logistical support by using various transportation modes by land, air, and sea to ensure safe goods and timely delivery. Moving commodities requires a lot of coordination of the movements throughout the journey across international borders. A specialized job that requires a thorough knowledge about export and import regulations and customs procedures and protocols and access to various types of material handling, warehousing, and transportation resources that only a freight forwarding company like https://starconcord.com.sg/sea-air-freight-forwarder-singapore/ can offer.  

What is freight forwarding?

A freight forwarding company is responsible for strategic planning of movement of goods across international borders on behalf of shippers by choosing the shortest travel route with deft logistics planning. The freight forwarder will recommend the shipper the safest and the most affordable transportation solution by understanding the nature of the goods and the mode of handling and transportation. The nature of transportation depends on the type of cargo, its weight or volume, delivery time, transportation cost, and the availability of the chosen mode of transport.  

The role of a freight forwarder

To discharge their responsibility of goods transportation between two countries, the freight forwarder undertakes various tasks like: 

Shipment tracking – As soon as the freight forwarder books the shipment, they keep tracking its movement through the various stages of the journey by using TMS (Transport Management System) software that transparently displays the goods’ status at any point in time while in transit.

Customs documentation – Freight forwarders must possess a customs brokerage license that enables them to submit and manage customs documents while navigating the complex documentation procedure to comply with the specific countries’ customs laws.

Warehousing – Since the goods might require intermediary storage while in transit, the freight forwarder will arrange for proper storage of the goods in warehouses whenever necessary by using their network of logistical resources and partners who offer services in various countries.

Negotiation with carriers – To ensure cost-effective means of transportation, the freight forwarder negotiates with various carriers to obtain the best rates according to the nature of goods, delivery timeline, space/ tonnage requirements, credit status, etc.

Scheduling cargo space – To optimize costs, freight forwarders are experts in scheduling cargo space by considering its size or volume to derive maximum cost benefits. They weigh the options of sending the cargo along with other goods, known as consolidation, that offers a profitable solution by considering factors like timely delivery and using multimodal transport. 

Freight consolidation – Freight forwarders allocate spaces within a container to different clients to make up for the entire container, and clients pay the freight on a pro-rata basis, which makes it most affordable. Booking several consignments within one container helps balance individual shippers’ space requirements while lowering the freight charges.

Cargo insurance policy– Freight forwarders can arrange for a marine insurance policy known as freight insurance. It covers the cost of goods in case of any loss or damage in transit.

A freight forwarder’s performance depends on efficient services that ensure the cost-effective and safe delivery of goods within the agreed timelines from one country to another.

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