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What Is Freight Forwarding

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18 views

What Is Freight Forwarding

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servicesg
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What Is Freight Forwarding?

Definition, Benefits and Key Stages


Indeed Editorial Team
Updated March 4, 2023

Freight forwarders play an important role in the transportation industry


by helping companies streamline the process of shipping goods.
Importing and exporting can quickly become costly and time-
consuming for manufacturers with bulk shipping needs, and freight
forwarders can help companies decrease costs and increase operation
efficiency. In this article, we discuss what freight forwarders are, the
benefits of working with one, industries that use freight forwarders to
manage their transportation needs and the key stages of freight
forwarding.

What is a freight forwarder?


A freight forwarder is a company that serves as an intermediary
between transportation companies that import and export goods and
the businesses that need them. Freight forwarders manage every
aspect of the transportation process, from storing goods before
shipment to ensuring they make it through customs. They don't handle
the movement of the goods themselves, but they establish
relationships with the companies that do so they can plan each step of
every shipment on a client's behalf. Freight forwarders work with
transportation companies that ship products by road, rail, water and
air.

What does a freight forwarder do?


Freight forwarders prepare for the shipment of a company's
merchandise by making arrangements with storage, transportation and
other logistics companies. By using the services of businesses they
contract with, they give their clients an affordable and reliable way to
send and receive goods both domestically and internationally. Some of
the services freight forwarders provide include:
 Preparing all documents necessary for importing or
exporting goods
 Selecting transportation providers to move the goods to
their destination
 Negotiating freight charges on behalf of their clients
 Consolidating freight for fewer shipments
 Managing inventory during the storage and transportation
processes
 Filing insurance claims when necessary

What are the key stages of freight forwarding?


Here are the steps involved in forwarding freight:

1. Export haulage

Freight forwarders call the first stage of the process export haulage.
This occurs when a transportation company takes products from a
company to the freight forwarder's warehouse. Trucks often handle
this step, but the mode of transportation depends on the material the
company ships and the distance to the warehouse. It could take a few
hours or days for the shipment to arrive.

2. Export customs clearance

Before an international shipment can enter another country, customs


agents in the product's country of origin must approve their departure.
Agents may check both the product and the associated paperwork to
make sure they correlate. They also validate the safety and legality of
the product before allowing it to leave the country. Many freight
forwarders hire customs brokers to handle this step of the process.

3. Items checkpoint

Items checkpoint, also known as origin handling, occurs when the


receiving team unloads the items into the warehouse. They inspect the
products to make sure they arrived without damage and confirm that
they match the booking documents for the order. The freight
forwarding team also checks to ensure that the target location will
accept the shipment. Certain items have restrictions, especially if
they're going to a country other than their country of origin. These
items may include:

 Flammable liquids: Gasoline, lighter fluid, acetone and


even perfume have strict regulations for shipment due to
their potential hazards.
 Drugs: Pharmaceuticals often require climate-controlled
transportation methods, and freight forwarders don't ship
recreational drugs.
 Alcohol: Alcohol laws vary by state and country, so
freight forwarders have specific regulations regarding
their shipment.
 Dangerous items: Products such as knives and other
sharp objects can present a risk to package handlers.
 Perishable items: Fresh food and other perishables
require express shipment to ensure they arrive in optimal
condition.

4. Import customs clearance

When the shipment reaches its country of destination, authorities


check the paperwork provided by freight forwarders to confirm that it
matches the product. They also ensure that the product meets the
legal requirements for entry into the country. Import customs agents
sometimes impose fees, which the freight forwarder covers for the
shipper and bills them for later.

5. Destination arrival and handling

After the shipment clears import customs, a transportation company


arranged by the freight forwarders prepares the product for shipment
to its destination. They receive the paperwork for the shipment, which
may include:

 Invoices
 Bill of Lading certificate
 Export packing list, license and declaration document
 Certificate of origin
 Inspection certificate

After completing an inspection of the product, they load it for transport


and take it to the import warehouse.

6. Import haulage

Freight forwarders call the last stage of the process import haulage.
This step takes place when the product arrives at the final destination
from the import warehouse. Like export haulage, freight forwarders
may choose one or more types of transport based on the product and
the distance between the warehouse and the destination. Mileage and
transportation mode determine how long the import haulage takes, but
the recipient usually receives their shipment anywhere from hours
after it leaves the warehouse to a few days later.

What are the benefits of using a freight


forwarder?
Freight forwarders simplify the process of shipping bulk orders from a
company, particularly those shipped internationally. They provide
storage and warehousing solutions for the shipper, obtain all
necessary insurance and documentation and communicate with their
clients on the progress of each shipment. Freight forwarders make it
easier for companies to manage their freight by providing the company
with a single invoice for all services combined.

Industries that use freight forwarders


Many industries benefit from the services of freight forwarders,
especially those involved in international shipping and distribution.
They include:

 Manufacturing
 Pharmaceuticals
 Medical
 Ecommerce
 Construction

By managing transportation and logistics services for companies,


freight forwarders allow them to focus on increasing their productivity
and revenue.

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