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What is freight forwarding and how to master it

The shipment of goods is vital to your eCommerce business, from receiving stock for inventory to sending orders out to your customers.

You probably know a lot about logistics, shipping carriers, and fast shipping programs. But how much do you know about freight forwarding?

This blog post covers what you need to know to help you find the best freight forwarder for your business.

What is freight forwarding in shipping?

Freight forwarding is the process of getting a shipment of goods from point A to point B. This can involve the use of one or more carriers and shipping methods, such as rail, air, ocean, and road.

For example, freight forwarding leather handbags from Italy could involve transporting them to the UK by train, shipping them to New York and flying them to Los Angeles.

What does a freight forwarder do?

A freight forwarder arranges the whole shipment process for you, from start to finish. This includes planning the journey, contracting shipping carriers, and complying with local laws. Using a freight forwarder to complete this process brings significant benefits.

1) Provide knowledge and expertise

Freight forwarders are experts in their field, and know the fastest, most reliable, and cheapest method to forward your goods at any point in the year. They also know how to handle emergency situations, such as delays, re-routed shipments, or adverse weather, to least impact your delivery.

2) Ensure compliance

The international movement of goods requires strict adherence to different rules and regulations. A freight forwarder ensures that you are fully compliant with the Harmonized Tariff Schedule, Import Security Filing, local customs documentation, taxes, and any other shipping restrictions. This helps you avoid hefty fines and, in some cases, legal action.

3) Share networks

Freight forwarders also have an international network, working with numerous different carriers and storage providers. This helps them find you the most reliable solution at the best price, as well as other eCommerce businesses who can help you to achieve (and save on) full shipping containers.

4) Support growth

Ultimately, a freight forwarder can make international expansion possible for your eCommerce business, without hiring an international logistics expert. You can reduce your product prices by sourcing items internationally, or increase your reach by breaking into a global market – all with the support, knowledge, and connections of your freight forwarder.

What is the freight forwarding process?

So how do you find the right company to take on such a mammoth task for your business, and what happens next? The freight forwarding process is relatively simple, especially when compared against doing it yourself.

1. Finding a good freight forwarder

First, you need to find a good freight forwarder. In conducting your search, it’s important to look out for:

  • Industry experience – international shipping isn’t easy, so look for someone with extensive freight forwarding experience and ask for eCommerce testimonials
  • Country experience – freight forwarding requires international connections, so ensure that your provider has experience and networks in the country you’re shipping to or from
  • Different services – ensure that your forwarder offers a variety of services to choose from, including air, rail, sea, and ground
  • Locations – ask where you would need to deliver and receive goods, to calculate your own shipping costs
  • Paperwork – check that your forwarder will complete all necessary paperwork, including customs manifests

You can find and connect with potential freight forwarders using Google, searching eCommerce learning resources, attending shipping conferences and events, and asking other sellers.

Common freight forwarders for eCommerce include DHL Supply Chain & Global Forwarding, Kuehne + Nagel, UPS Supply Chain Solutions, DB Schenker Logistics, and Maersk.

2. Shipping your goods to a freight forwarder

Once you have found a freight forwarder and an arrangement is in place, you must send your products to the freight forwarder’s warehouse. This is known as export haulage and may be conducted by yourself, or by using a logistics provider.

3. Documentation

Upon receipt, your goods will be checked and then your freight forwarder will complete and submit the required documentation for customs clearance. In some cases, customs clearance will be obtained before the cargo is shipped.

4. Transportation

Your goods are then physically transported using the chain of carriers arranged by your freight forwarder. Depending on the freight forwarder chosen, you may receive updates at each stage of the journey.

5. Arrival

Upon arrival, your freight forwarder arranges for all outstanding documentation, carrier bills, and duties to be completed.

6. Import

Your shipment is then sent to its final destination – either by your freight forwarder, yourself, or a logistics provider. This is known as import haulage and is the final stage of the freight forwarding process.

What’s the difference between third-party logistics (3PL) and freight forwarding?

So far, so good? What you might be questioning is: what’s the difference between logistics (3PL) and freight forwarding.

Freight forwarding is arranging the chain of shipping services and carriers to move products from one point to another. The freight forwarder is not, at any time, responsible for your products – that responsibility lies between you and the carriers.

Third-party logistics, or 3PL, is the storing and shipping of products to different locations. Logistics providers are responsible for storing your products in their warehouse, picking products for delivery, and successfully delivering them to your customers.

Further reading: 16 important questions to ask before committing to a logistics provider

Which one should you choose? Typically, a freight forwarder is used for importing goods from another country and exporting large quantities of goods to another country (for example, B2B). A logistics company is used for acquiring or selling goods domestically and for transporting goods to and from your freight forwarder. Both can be used to create a successful eCommerce operation.

Freight forwarding – final thoughts

Freight forwarding is an exciting option for any eCommerce business – enabling you to grow profit margins, customers, and brand recognition. And, with these top tips for finding the best freight forwarder for your business, international expansion is truly at your fingertips.

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