Freight forwarding consists of strategic logistics planning and execution for the international movement
of goods, on behalf of shippers. Specifically, a freight forwarder will carry out freight rate negotiations,
container tracking, customs documentation and freight consolidation, among other tasks.
Importing and exporting creates lucrative opportunities for businesses with the wherewithal to execute
strategic logistics plans.
Defining the Role of Freight Forwarder
The following is a brief breakdown of a day in the life of a forwarder:
Shipment Tracking
Forwarders use a Transportation Management System (TMS) to maintain transparent visibility throughout
each stage of a shipment’s voyage.
Customs Brokerage
This critical piece of forwarding requires special licensure—a customs brokerage license. Licensed
brokers are the only people qualified to manage and submit the extensive documentation necessary to
complete importing/exporting processes.
Warehousing
Some forwarders may have their own warehouses available to harbor shippers’ commodities (or parts of
commodities), but for the most part, the service your forwarder will offer is to arrange storage at a
warehouse owned and operated by a conveniently located affiliate.
Negotiating
Bargaining with carriers for cost-efficient shipping rates is no easy task. The art of this deal entails
appealing to carriers’ interests by balancing the pros and cons of your cargo type, time flexibility, credit
status, space/tonnage requirements, and more.
Cargo Space Scheduling
Savvy coordination and scheduling of cargo space are the more tangible parts of a forwarder’s skill set. If
you hire a freight forwarder to manage logistics, this is where they’ll have the opportunity to display their
chops. It takes a thoughtful planner to determine whether it is profitable to consolidate a shipment, to
secure timely sailings, and to weigh the feasibility of intermodal shipping options. Cargo scheduling is the
logistics of "Logistics."
Consolidating Freight
Forwarders may have several customers who all need to transport shipments that do not necessitate the
use of an entire container. Freight consolidation for less than container load (LCL) shipping is a service
forwarders provide wherein multiple smaller consignments are all booked aboard the same container. In
these instances, the shipping cost is spread amongst all participating customers based on the cargo’s space
requirements.
Supplying Cargo Insurance
Forwarders can provide you with a cargo insurance policy, also known as freight insurance. Cargo
insurance is intended to reimburse the loss payee in the event that goods are damaged or stolen in transit.