Tuesday, 29 September 2015

What exactly is freight forwarding? A very quick guide to the essentials

International freight is a complicated business, with lots of different players at every level of operation. As such, it's not always obvious what everybody does, or why what they do is important.

This is especially true for freight forwarders, who are deeply integrated into industry processes but whose role requires a bit of explanation. It's not immediately obvious what it means to 'forward' freight, and how their function differs from the role of carriers.

So let's break it down to the essentials.

What those other words mean

Here's a quick glossary of industry terms that are relevant to freight forwarding:

A supply chain is the entire process involved in supplying a product to a customer, from the acquisition of raw materials, to manufacture, retail, and delivery.

Logistics is the organisation of the supply chain, ensuring the success and efficiency of the entire operation. It's the management of how things flow from one link of the chain to the next. It involves literally moving things around: transportation, materials handling, packaging and storage.

Freight or cargo refers to goods or produce being transported by either aircraft (air freight) or boats and ships (sea freight), and sometimes the word is also used for road transit using vans, trains and trucks/lorries.

Importing and exporting refers to the movement of goods across international borders. This means that the goods are subject to international trade laws and various national jurisdictions, such as customs.

A carrier is the person or company responsible for transporting goods. Carriers are either public (transporting other people's or companies' goods), or private (a company transporting only its own goods). Delivery companies like UPS, TNT, FedEx, DHL and DPD are all public (or 'common') carriers for whom transportation is their primary business.

So where does a freight forwarder fit in?

A freight forwarder is there to simplify the process for the person or company looking to import or export their goods. Freight forwarders will deal with the logistics on your behalf, arranging the storage and shipping of your goods, preparing the necessary documentation and labelling, negotiating lower freight charges with carriers, and filing insurance.

Freight forwarders produce their own house bill of lading or air waybill, which is a document that provides the details or terms and conditions of a shipment, and is signed by the forwarder instead of the carrier. The forwarder and its agents are usually put down as the consignor and consignee (sender and receiver) of the cargo.

International freight forwarders make things much easier for importers and exporters by navigating and negotiating the logistics quagmire of international delivery so that you don't have to.

While the word 'freight' typically refers to heavier cargo, freight forwarders can also help you with the shipment of smaller parcels (express delivery), and most deliveries can be made door-to-door.

Want to find out more about what freight forwarding can do for you? Get a quote with international freight forwarder Transglobal Express, for air freight, sea freight, and express parcel delivery. We negotiate reduced prices with major carriers including UPS, DHL, TNT and DPD.

(Image credits: Bill AbbottHåkan Dahlström)

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