Freight Forwarding: Breaking Down The Process

Optimized supply chain management is a game-changer for any business. While the task of transporting goods from one place to another can seem daunting and costly, the right strategy can turn this challenge into a smooth operation that boosts your business performance.

A common and effective strategy is to leverage logistics services. By entrusting the complexities of freight shipping to third-party logistics services, you can significantly alleviate stress and focus on your core business activities.

Freight forwarding, a critical aspect of supply chain management, is all about transporting and delivering your shipments. To appreciate how it can elevate your business, let’s explore the fundamentals of freight forwarding and its potential to drive your success.

Demystifying Freight Forwarding

Given the complexity of the shipping process, freight planning becomes a pivotal part of your supply chain. Freight forwarders are specialists in this domain, helping companies optimize distribution operations through air, ocean, road, and railway freight.

In essence, freight forwarders act as intermediaries, negotiating the most efficient and cost-effective methods to transfer goods between shippers and transportation services. They manage everything from planning to paperwork, ensuring the global supply chain operates seamlessly.

Freight forwarding, a pillar of global trade, was first recognized in Canada in 1948 with the establishment of the Canadian International Freight Forwarders Association (CIFFA). This organization was designed to regulate best practices efficiently and promptly, whether crossing borders or oceans.

While using freight forwarders is not obligatory, they offer a superior alternative to shipping goods independently. They provide the necessary space, assist with documentation and insurance, and facilitate customs clearance. By using freight forwarders, you can concentrate on your business operations, leaving the complexities of cargo shipping to the experts.

Freight Forwarding in the United States

In the U.S., freight forwarders adhere to numerous rules and regulations. Domestic freight on roads must be registered with the Federal Motor Carrier Safety Administration (FMCSA). Registered freight forwarders act as carriers that accept and are liable for the delivery of freight, operating under their own bill of lading.

For international ocean freight, freight forwarders arrange shipments to and from the U.S. They must register with the Federal Maritime Commission and are classified as Ocean Transportation Intermediaries. These intermediaries can be either ocean freight forwarders or non-vessel-operating common carriers (NVOCCs).

An ocean freight forwarding company arranges shipment space for shippers. NVOCCs, on the other hand, publicly provide transportation services on the ocean. They have their own bill of lading but do not operate or own the vessels transporting the cargo.

Key Stages of Freight Forwarding

Freight forwarders are logistics management experts, which is why many companies rely on them in the global shipping market. They are responsible for several key stages of the supply chain to keep the world’s goods moving:

• Export Haulage: The initial stage where items move from your location to the freight forwarder’s warehouse, typically via truck or train.
• Checkpoint: Upon receiving the goods, freight forwarders verify the shipment’s completeness and condition.
• Export Customs Clearance: For international shipping, goods must clear export customs. Customs brokers handle this process by submitting cargo details and providing necessary customs documentation.
• Import Customs Clearance: Upon arrival at the destination, the shipment undergoes import customs clearance as per the destination country’s regulations.
• Destination Arrival and Handling: Once the cargo arrives, freight forwarders handle all the cargo documents and manage the freight shipment handling.

• Import Haulage: Similar to export haulage, the cargo is transported from the import warehouse to the receiver’s final destination.

Industries Benefiting from Freight Forwarding Services

A wide range of industries significantly benefit from freight forwarding services, including:

• Construction
• Manufacturing
• Medical
• Pharmaceuticals
• E-Commerce
• Consumer Electronics

Services Managed by Freight Forwarders

Freight forwarders typically offer a comprehensive suite of services, including:

• Document preparation forthe import and export of goods
• Selection of transportation providers for goods delivery
• Negotiation of freight charges
• Freight consolidation
• Inventory management in storage
• Assistance with necessary insurance, such as cargo insurance

Freight Forwarders and Supply Chain Management

Freight forwarders are the lifeblood of the global supply chain, enhancing your network for more consistent worldwide cargo shipping. In the post-pandemic world, many freight forwarders have also become customs brokers, adept at managing logistics strategies, adhering to compliance, and preparing packaging even as international laws evolve.

Moreover, freight forwarders offer a robust network that can expedite your shipments, reduce costs, and enhance your company’s value. While you may excel at running your business, navigating the world by air, sea, and land is crucial for successful goods distribution. This is the essence of freight shipping, which takes various forms.

Methods of Freight Shipping

The transportation method you choose depends on your shipment’s destination and other factors. Here are the most common transportation methods in freight shipping:

• Trucking: Trucks deliver supplies by land and are a vital part of the freight shipping process.
• Railroad: Rail freight is an efficient, convenient, and environmentally friendly way to transport freight.
• Sea: Most cargo shipments are sent via the ocean, the primary method for transporting international shipments.
• Air: Air freight is the fastest way to ship products and is ideal for high-value or time-sensitive cargo.

Benefits of Using Freight Forwarding Services

Freight forwarders simplify the shipping process and assume the responsibility of shipping your product. They are invaluable assets, helping you make the best shipping choice at the right price. They can negotiate cargo space and help you determine the best way to deliver your goods.

Freight forwarders offer numerous benefits, including:

• Accountability and Experience: They help resolve shipment issues, especially concerning international transportation.
• Global Access: Freight forwarders connect you to global partners and assist with importing or exporting your items.

• Cost-Effectiveness: They can negotiate discounted rates from multiple carriers for your international shipment.
• Proper Documentation: They know what customs require and can help oversee your product’s transport to and from anywhere in the world.
• Compliance: They ensure your shipment follows the regulations for the import and export haulage of your goods.
• Tracking: They can track your cargo from one transportation company to another.
• Flexible Shipping Options: They offer more flexibility for your shipments.

Choosing the Right Freight Forwarding Service

When you partner with Dedola Global Logistics, the transportation process becomes smoother. Our over 45 years of industry experience and dedication to excellence means that as a client of DGL, you’ll have access to the best shipping solutions for your global shipments. Contact our ocean and air freight services experts to find out more about how we can make this process seamless for you and your business.