Many companies that import products rely on freight forwarders to reduce the stress and cost of doing business internationally. If you’re looking to diversify suppliers or tackle a new market, someone might have recommended a freight forwarding service as an intelligent partner. But, is that right for you?
In this guide, we’ll look at freight forwarders and the services they offer. Plus, how they can impact your products and what information you might need to know to find a reliable partner.
Whether you ship by air, use a port, or aren’t sure how to move your cargo internationally, freight forwarding can likely help.
Red Stag Fulfillment could help with your international logistics through our freight forwarding partner network, with world-class support for shipping lanes worldwide. With a focus on trans-Pacific freight forwarding, including an in-country team and office in China, suppliers, partners, manufacturers, and customers worldwide are available to you through our supply chain network.
What is freight forwarding?
Freight forwarding is a logistics service or set of services that operate between shippers (like your business) and carriers. The goal is to get your freight from one location to another, regardless of the moves or modes of transit required. These services are commonly associated with international shipments because of the complexity of these moves.
Let’s say you use an overseas manufacturer to create your products. You can use a freight forwarder to manage product delivery from the manufacturer to your domestic warehouses. Here’s an example of what the process can look like.
7 freight forwarding steps
- You submit a purchase order to your manufacturer and use a freight forwarding platform to allocate which warehouse(s) the products will end up at when shipping is completed.
- The manufacturer uses the freight forwarder’s platform to set a pickup and initial movement to fill your purchase order.
- Freight moves to the freight forwarder’s warehouse, checking the items to ensure the order is complete and undamaged.
- Goods are prepared for export customs clearance. Freight forwarders use customs brokers to submit necessary paperwork about the cargo.
- The freight forwarder books the ocean lane and creates an agreement between shipper and consignee to ship your freight via ocean container.
- Shipment arrives in the destination country, and customs officers check the import documents. In many cases, freight forwarders will begin submitting some documentation before the cargo arrives to minimize wait time at the port.
- The freight forwarder sets up shipping with domestic carriers to move your freight to your warehouse location(s). Freight forwarders may first send imports to local warehousing to open containers and ship freight in smaller quantities.
Most freight forwarders work with multiple companies. They may combine cargo or shipments from these companies into a single shipment to make it easier to move goods through customs and reduce expenses.
If you’re moving into new markets, a freight forwarder is an intelligent partner who can help you ensure that shipments meet regulatory requirements all along the way. They’ll help you ship in bulk and keep new customers happy.
One quick item for anyone operating in the EU: Freight forwarders note a significant increase in the amount of work, delays, checks, and verifications being performed due to the United Kingdom’s Brexit. Because the UK now has separate agreements within the EU and multiple reporting requirements, UK goods in transit may need freight forwarding services for every border they cross, even if they’re moving within EU countries.
What services do freight forwarders offer?
What sets a great freight forwarder apart is its network of partners.
A forwarding company’s ability to make your shipment go smoothly depends heavily on its network of insurers, customs agents, advisers, carriers, and related companies.
Red Stag Fulfillment’s freight forwarding partners enable us to provide you with a one-stop shop for managing domestic and international freight moves. By working with us, you manage a single relationship, and we handle all the moving parts to keep your machinery running smoothly. The process doesn’t have to be daunting, and you get access to many of the benefits and services that freight forwarders provide.
9 core services a freight forwarder provides include
- Inbound transportation management. You work with a manufacturer or wholesaler to buy freight. After having the purchase order, you can turn the process over to your freight forwarder, who will manage every step in the process to get your freight from its origin to your door.
- Customs brokerage. Freight forwarders generally have internal customs brokerage experts to facilitate every move your freight makes. Brokerages are responsible for understanding import and export rules across the globe and ensure that they’re followed for your shipment. Thankfully, digital technologies make the process easier and help companies avoid delays while also providing constant, real-time visibility into a supply chain.
- Cargo booking. Freight forwarders can help you find cargo space or book it for you, selecting carriers based on your requirements around price, speed, and how it travels. Initially, they’ll often give you carrier options and, once selected, will perform the booking.
- Freight consolidation. Forwarders can take your shipment or shipments from multiple clients and put them together to create LTL (less than truckload) and FTL (full truckload) freight moves. They also consolidate at the container level, offering LCL and FCL for ocean freight. This will give you access to a better rate for your shipment.
- Freight documentation. Export documentation can be complicated, and a freight forwarder can handle this for you. They’ll manage everything you need and help you with software or tools to generate these documents automatically. A freight forwarder can also manage the bill of lading for all your shipping.
- Carrier rate negotiations. Carriers give better cargo rates to companies that offer them more business, such as Red Stag Fulfillment in our role as a 3PL. Freight forwarders negotiate your freight rates based on the volume they ship from all their clients, giving you added bargaining power for more savings.
- Insurance and tracking. Perhaps best for eCommerce brands is that a freight forwarder can secure the cargo insurance you need plus handle insurance claims for you. Expertise will significantly help here, as it is hard to acquire without having a local presence. A forwarder will help you with the necessary claims and filing needs. There are differences for claims related to air, ports, domestic trade, ocean shipping, rail, and more. You’ll also have the right partner for understanding when each party has responsibility, whether that’s for damage or customs requirements. In all that work is a lot of tracking, so your forwarding partner will also have the tech and expertise needed to track shipments at any point.
- Warehousing and end fulfillment. International freight moves need a destination. Your forwarding company can help you find warehousing space and fulfillment partners to get your goods from production to the end consumer. A freight forwarder may come to Red Stag Fulfillment for U.S. distribution, for example, and we’ll work with them to ensure your freight is safe and customers are delighted as their orders arrive.
- Purchase order guidance. Working with Red Stag Fulfillment as your one-stop-shop provides greater visibility into your supply chain and business as a whole. By looking at past purchase order and fulfillment data, RSF offers guidance on how to optimally allocate inventory between facilities. The goal is to help companies plan inventory with the aim of reducing fulfillment costs and delivery times to improve customer satisfaction.
Freight forwarders offer services from the first movement of cargo through their arrival to the final destination. You can choose from their options to ensure you’re protected while keeping business affordable and customers happy. It’s all about getting the proper process and service mix to provide solutions and fill gaps within your company.
How does freight forwarding work for eCommerce?
Freight forwarders don’t necessarily work any differently for eCommerce fulfillment and shipping needs. What you tend to get is a better partner for moving your goods and meeting international customers. Few eCommerce brands have a local presence in multiple countries. A forwarder’s transportation services give you that “hometown feel” by connecting you with global partners, local warehouses, and everything you need to get goods to their final destination.
Treat them as an extension of your company, designed to help with customs, logistics, shipping, and more to ensure you’re getting the revenue your business needs. If you want to expand, they’re often the simplest way to grow your supply chain to support multiple international shipping activities.
Even better is that today’s freight forwarders are adopting smart tech and automation tools. This turns your shipping efforts into clear and straightforward processes. Forwarders provide the integration you need and can start managing inventory levels and shipments throughout your supply chain. They get the freight you need to regional warehouses to meet growing customer demand.
A note on inventory and optimizing expenditures
Freight forwarding can feel daunting, but the right partner can be a vital piece of controlling your inbound costs and protecting your investments. Inventory is the most significant capital investment for many eCommerce companies, so you want to move it through the import process as quickly as possible while ensuring it is safe and insured.
So, optimize these expenditures by working with a network of connected partners. Their ability to share information about products, transit times, and other supply chain elements can mitigate the impact of any delays or damage. Having established partners with existing carrier relationships will also help protect you against volatile freight costs. You can feel safe about putting significant capital into inventory and avoid spikes in inbound or outbound shipping costs.
Do they have different international shipping advantages?
Freight forwarders come in all shapes and sizes. They offer a mix of services that can be automated or present you with options to select manually. Consider the control you would want over individual shipments plus the time commitment that this may require. It’ll help you understand what level or type of partner might be best for your business.
Red Stag Fulfillment offers an eCommerce focus through our freight forwarding partnerships. Our goal is to take as much of the headache or concern out of international moves as possible. So, we utilize your data to make suggestions and execute moves designed to optimize costs and transit times.
By working with our network, you get access to a freight forwarder and fulfillment partner together, on a unified platform. That’s different from the standard setup where there isn’t much communication between the two parties. A lack of communication can have adverse ripple effects when a delay occurs anywhere in the supply chain. For example, a container arriving late due to a backup at a port may be further delayed at a warehouse if the freight forwarder doesn’t tell the fulfillment company to reschedule labor for the new, correct arrival time.
Creating a single engagement for you minimizes these kinds of risks, protecting your business and ability to fill orders quickly.
Should I use a freight forwarder?
Freight forwarding services help businesses that need help reaching new markets or want a more diverse supply chain. Forwarders are a proven support system for any shipment that will head overseas as import or export. They’re instrumental when you are new to international moves or need broader transportation services as your suppliers expand.
Buying from or selling in new markets is more than just shipping to them. Partnering with a freight forwarder helps your business focus on sales and partnerships, while someone else worries about customs and freight transportation.
You should also review how tight money is for your international work. Freight forwarding services often help optimize routes and reduce pricing based on their relationships and knowledge of the markets. They can generally move your goods faster and keep each shipment safe, minimizing logistics touchpoints. At the same time, they’re a significant help for managing any reverse logistics and returns that you experience, which has a significant potential to increase as the world continues to manage COVID-19 and other events.
If you’re a U.S. company looking to expand, one of the best places to start learning about what you need for your freight and shipping is the government’s International Trade Administration. It’ll help you get started with managing goods and knowing what to ask forwarders. Also important is understanding logistics service requirements, global trade management, and price considerations.
How do I find the right freight forwarding partner?
Red Stag Fulfillment is available to help you find quality freight forwarders for your business. Together, we can discuss your transportation needs and provide some initial steps to help you start the process.
For every company that comes to us, we recommend one essential thing. Find a freight forwarding company that knows your products and your industry.
They should understand your goods and related requirements, plus have helped companies like yours with shipping and logistics services. Ultimately, they should be able to connect you with other companies to help your operations in new markets. Also, they should protect your freight as it moves through the supply chain.
Shipping, especially international moves, can have significant logistics challenges. Choose someone who will protect your goods throughout the shipping process and clearly explains their forwarding steps. Price should not be your first consideration because the right partner will ultimately protect your business more than the cheapest option.
As with any logistics or eCommerce question about your goods, Red Stag Fulfillment welcomes your freight forwarding questions. We’ll work to get you on the right path.