Using freight forwarding networks and services can take business and cargo to the next level while coordinating goods from one destination to another. Through knowledge and expertise, freight forwarding services can ensure the proper delivery of the goods while saving the company money and offering more services. The benefits of using a freight forwarder and additional services provided below will allow for a better understanding of how this happens and its impact on your ability to deliver a better experience to your e-commerce customers.
What Are Freight Forwarding Services?
A freight forwarder transports goods from one destination to another as a third party, most often in the international space, specializing in arranging the entire process for shippers. While they are similar to freight brokers, forwarders take on additional specialized services that help to facilitate trade between carriers, brokers, and even other forwarders. Additionally, a forwarder has extensive knowledge of document requirements, regulations, transportation costs, and banking practices to ease the exporting process for shippers. The services forwarders provided include:
- Tracking inland transportation
- Preparation of shipping and export documents
- Booking cargo space
- Freight consolidation
- Cargo Insurance
- Filing insurance claims
An example to show when freight forwarding services are needed is when a seller wants to get goods or products to a fulfillment center. Instead of trying to manage the whole process, shippers can hire freight forwarders to handle all the hassle of pickup by carriers from the manufacturers to customs processing to delivery at an inland distribution center.
What About NVOCCs Versus Forwarders
A non-vessel-operating common carrier (NVOCC) is an ocean carrier that transports goods within their own House Bill of Lading or equal documentation without operating ocean transportation vessels. An NVOCC’s activities may include booking space and arranging to ship with mainline, paying transportation freight or other transportation charges, issuing documents, and conducting contracts of international carriage of goods with the shippers as carriers.
Like freight forwarders, an NVOCC enters into volume-based ocean freight arrangements with the various shipping lines operating across the different trade lanes at a basic level. Furthermore, NVOCCs then create their own tariff to sell space on such liner services to various clients. Internationally, a freight forwarder and NVOCC tend to have the same job description, except for the legal distinction between the two. NVOCCs operate by negotiating space from common carriers to contract out to freight forwarders and shippers and have the master bill of lading. Meanwhile, forwarders may operate well beyond the boundaries of NOVCCs
Types of Freight Forwarding Services Provided
For importing and exporting goods, freight forwarding services can provide expertise in documentation, regulations, and customs clearance varies from country to country. Many of the most successful importers and exporters use freight forwarding services to boost throughput. Using a freight forwarder can provide a seamless operation while providing helpful assistance to grow the efficiency and visibility of the company. In fact, let’s consider the top types of freight forwarder services in demand in today’s world. These include the following:
Every load of cargo that gets exported or imported must go through the destination country’s customs clearance process. To pass customs clearance, rules, laws, and regulations must be met and vary for each country and even between each port. Freight forwarding services can assist with import documentation, payment of duties or other costs, resulting in time-efficient shipping to make the customs clearance process seamless.
Additionally, documentation may include sales invoices, certificate of origin, the buyer’s purchase order, supplier invoice, the bill of entry, lading, and packing list. A freight forwarder can deal with customers’ agents and submit the proper paperwork to relevant authorities, so one less issue for shippers to address. This is especially helpful since a problem with the documentation or the cargo with the documentation can delay the delivery, harming the business. When a delay occurs, and the shipment sits in the warehouse longer, the company usually carries responsibility for the additional warehouse and storage fees. Forwarders ultimately help avoid any costly delays using the resources and networks available to them as forwarding entities to abide by the correct rules for a specific region.
With global trade increasing, freight forwarders continue to expand their network around the world. But, sailing in the uncertain waters comes with a host of possibilities and uncertainties. Having insurance during operations can become more of a necessity than an option, especially during unexpected circumstances and accidents leading to damages and financial losses. Freight forwarders liability insurance can assist with cargo that has damages from mishandling, natural calamity, abandonment, vessel rerouting, late custom release, and more. The insurance can cover losses and ease the financial strain that can acquire from mishaps with cargo. It’s that simple, and it’s that difference that will provide the needed reassurance for operating in the global world of e-commerce.
Labeling and Packing
Freight forwarders can also help clients prepare and package products properly for shipping. Overseas shipping has different complexities with requiring shipments in large containers and loading-unloading multiple times during transit. For a package to properly ship, the labeling has details that must also be included to pass customs clearance. The bill of lading, certificate of origin, commercial invoice, export license, inspection certificate, export packing list, and shipper’s export declaration must be on the label for shipments. Using a freight forwarder for these services can save stress and provide reliable logistics on industry expertise and assistance with international shipping.
A professional freight forwarder can further provide customers with warehouse space in the country of origin and the destination. This is a marked advantage for those operating in markets with tight or limited container capacity. For reference, per diem fees occur when equipment is kept away from port for too long, such as during movement from the ship to an inland warehouse. However, nearby storage through freight forwarders will allow for the goods to be covered by insurance and housed in a secure area, while effectively lowering the turnaround time for trucks. As a result, the risk of per diem fees declines. From the packing and warehouse stages to the customs procedure through the final delivery, freight forwarders can take the hassle on their shoulders and provide extra services to ensure there’s nothing for the customer to handle.
An e-commerce platform helps gain control over the inventory flow, reallocating freight when needed, and forecasting demand based on ordering trends. But again, inventory management all depends on replenishment logistics, including shipping and storage prior to arrival at your warehouse. This is where freight forwarders can again add value. Furthermore, inventory management goes a long way in waste reduction and tracking inventory levels, orders, sales, and deliveries, and since forwarders’ whole businesses are managing the logistics of other companies, they naturally are experts in inventory management and planning. Moreover, working with freight forwarding services can help shippers achieve better visibility through the chain network and promote timely inventory planning.
Digital Document Management
A comprehensive and easy-to-use freight platform in the tech stack allows for everything together within a digital, connected document storage and retrieval system. This freight forwarding system can eliminate the worries of tracking down paperwork and enhance communication with other freight management parties and customers alike. Documents, such as invoices, payment records, delivery confirmations, bills of lading, and customs documentation, can be recorded, filed, managed, and accessed digitally. This is essential to meeting all IOR and EOR requirements as well.
Looking at e-commerce and the trajectory for the continued growth, The International Air Cargo Association (TIACA) found a few strong statistics, “1.45 billion people shopped online globally (up 9% from 2017), and e-commerce sales reached USD 25.6 trillion (up 8% from 2017). B2B was valued at USD 21 trillion, representing 83% of all e-commerce.” From the past buying habits of customers to now, online shopping has grown immensely, resulting in businesses adapting to provide digital solutions to stay competitive. It’s in this space where freight forwarders have continued to optimize paperless trade and technology usage to stay up to date with the new business models. Additionally, that includes building integrations between forwarding systems, like Cargologik, and major e-commerce platforms, such as Shopify, WooCommerce, Magento and even Amazon FBA.
A Visibility System for Real-Time Shipment Status
Accountability and transparency with real-time tracking and monitoring systems used through digital freight networks allow freight forwarders to visualize cargo flow better. And real-time visibility alleviates many of the issues that arise from outdated data and misinformation. Having improved data-driven technology and automation allows for end-to-end communication and visibility in freight forwarding services, which amounts to keep freight management parties and customers apprised of current shipment status and avoiding unnecessary check calls. Further, to reduce the risk of lost shipments, automation combined with user-friendly communication through alerts, emails, and notifications can allow close collaboration and true management by exception. Using freight forwarding platforms, client data, documentation, predictive analytics, and real-time data can provide clear visibility while also deriving actionable insights, as detailed below.
With the best freight forwarding analytics technology, getting ahead of the competition and providing customers excellent service and results became a lot easier. Using analytics can help achieve improved cost management, end-to-end visibility and efficiency throughout the supply chain network, and using software-as-a-service (SaaS) can increase collaboration and supply chain visibility at a fraction of the cost of traditional, in-house-developed systems. Integrating analytics and SaaS data can provide intuitive, easy-to-understand reports of supply chain operations, allowing for improved efficiency and centralized focus. And utilizing big data and analytics can give managers the visibility and insights to maintain partnerships and efficiency across the network, leading back to the value-added benefits of world-class freight forwarding services too.
Choose a World-Class Freight Forwarding Platform to Provide These Services to Your Clients.
Access to a freight forwarding platform can help your business gain a competitive advantage while promoting efficiency and visibility. A simplified, easy-to-understand, and intuitive freight management software platform can help improve resolution time, win over more quotes, encourage communication, and improve organizational performance—all of the benefits and services at the convenience of a user-friendly digital dashboard. Additionally, the value added by choosing the right freight forwarder is simply too great to ignore, and shippers need to know what to expect from a world-class freight forwarding services provider.
Sign up for Cargologik to Get Started.
As a shipper, having e-commerce capability and visibility can allow access to the data needed to help see what can boost the industry’s efficiency. Advanced freight forwarders make that a reality by leveraging world-class software that’s ready to deploy in e-commerce fulfillment like Cargologik. Get a demo of Cargologik today to see improvements in your operation.