From pain points to the nuances of your shipments, freight forwarders are in the industry of being the middle-men that can either make your business run smoothly or halt it to a standstill.
It’s no wonder that choosing a forwarder can feel like a daunting task, and that’s why we’re here to help.
The commercial activity of freight forwarding is the transportation of goods from points of origin to destinations through multiple carriers over land, air, and sea.
Shippers are generally unable to handle the logistics behind shipping cargo and require freight forwarders to provide 3PL services. This is why it’s essential to find a freight forwarder who can take care of your needs.
1. Make Sure They’re Reputable
Building a good reputation takes years and can be destroyed in seconds. For freight forwarders, their reputation and connections are what drive their business.
If you’re concerned about a forwarder’s reputation and trustworthiness, then make sure to check if they are a WCA approved member. This logistics partnership network is a good benchmark to verify if a freight forwarder can be trusted. You can also use FreightDeadbeats to check if a freight forwarder provided inadequate services.
If you’re unable to find any background information, then simply ask forwarders for references. This shouldn’t be an issue for any reputable forwarder. Likewise, you can also review their financial statements online, unless they are a privately held company.
2. Find a Forwarder with the Right Experience
When it comes to a freight forwarder’s experience, there are a few things to be aware of. For example, if you’re dealing with import and export customs, you need to know if your partner has the industry knowledge to navigate laws and regulations in both the country of origin and destination.
You also need to think about whether you need to work with a specialist, particularly one that deals with your cargo type. Whether you’re exporting perishable goods and require a reefer container or if you’re shipping recycled plastics, having a freight forwarder that knows the best practices for transporting your goods is paramount.
3. Ensure They Have a Good Network
A freight forwarders’ industry relationships are nothing short of vital. Connections in the shipping industry are the difference between success and failure.
These connections are what allow forwarders to leverage NVOCCs and carriers for better rates, and also help them to ensure that paperwork and local authorities can be navigated more efficiently.
If you’re interested in learning more about your forwarder’s network, make sure to ask them for references, or ask them who they work with.
4. Pick a Forwarder with the Right Services for Your Shipments
It’s important to know if your freight forwarder can provide the following document management and 3PL services:
Document services
Make sure to find someone that understands what document management you require. The last thing you want is to discover that your freight forwarder is unable to provide any of the following services:
- Notarizing invoices on behalf of shippers
- Making amendments to document mistakes
- Obtaining certificates (insurance, inspection, etc.)
- Preparing and reviewing documentation
- Helping with customs clearance
Shipping logistics services
You also need to ensure that your forwarder can offer the following 3PL services:
- Negotiating freight rates for air, sea, and road
- Offering export and import quotations
- Finding appropriate shipment routes for a shipment
- Arranging for packing and loading
- Finding appropriate freight insurance
- Making payments on your behalf
These services and the aforementioned document management duties are only a fraction of what a freight forwarder can help organize. It’s critical that you understand what a potential forwarder can and cannot provide.
5. Choose Someone with a Transparent Pricing Structure
Just imagine this scenario. You request a rate quote. It takes three days to hear a response, and after booking your space, you find out later that the price was higher than initially negotiated. This can be due to GRIs or PSS adjustments, but it can also come down to a lack of transparency of pricing structures.
You may find that the total freight rate offered is not transparent and that costs are being combined. Freight forwarders can charge you for fuel surcharges or brokerage fees, and you may not even know it. Find a forwarder with a transparent pricing structure that doesn’t cause ambiguity.
6. Make Sure They Offer Cargo Insurance
So you’ve found a forwarder with transparent pricing, the 3PL services you require, and you have mutual trust. However, you now need to think about one last issue, and that’s cargo insurance.
If you want peace of mind and risk-reduction, then it’s essential to purchase cargo insurance that provides coverage for shipping by land, sea, or air against the possibility of loss or damage to your shipment.
You may also need to think about finding a forwarder that can offer specific cargo insurance, depending on your shipping needs. As there are various types of cargo insurance, working with a forwarder that can effectively cover your cargo is key.
Forwarders act as intermediaries for 3PL services and are not responsible for shipping delays. A freight forwarder’s estimated date of delivery is only considered a forecast, and if delays occur, they aren’t generally held accountable.
Despite not being responsible for shipping delays, forwarders can assist in preventing delays or resolving issues that cause hold-ups.
Maintaining Good Relationships is Important
Freight forwarders owe a lot of their success on their ability to forge good relationships. The same can be said about the relationship between you and your forwarder. There are a few things you can do to ensure you keep a good relationship with your freight forwarder, and here are the two most important in our opinion:
- Make bookings with advance notice: Requesting a last-minute booking too often can deter forwarders from trusting you as a valued customer. Bookings with little advance notice can be inevitable, but as long as you communicate with your forwarder and minimize bookings close to departure dates, you can maintain a solid relationship
- Manage your documentation: Keep your cargo documentation organized and accessible for your forwarder. This will allow for efficient bookings and shipping
Accept that Complications are Part of the Shipping Industry
Freight forwarders might be able to ship your cargo efficiently, but they can’t perform miracles. Having a good relationship also includes being able to accept and work through issues. Problems will inevitably arise, and how you communicate in a crisis will determine the future course of your relationship with a freight forwarder.
When assessing problems, you need to ask yourself, “have any of these complications been caused by my freight forwarder?” If the answer is “yes,” and it occurs often, then it may be time to outsource your 3PL services to someone else.
Find a New Freight Forwarder if Your Current One is Consistently Negligent
While freight forwarders are not legally responsible for cargo delays, you can choose whether or not to continue to work with them if they’re unable to make your shipping smooth. There are two places you can begin your search:
- With 40,000 members, The FITA (The International Federation of Freight Forwarders Associations) is an excellent place to start your search.
- The WCA has a massive directory of approved freight forwarders that can be trusted.
Once you find a potential forwarder, repeat the above six steps, and ensure they are up to the challenge.
A final step that shippers generally overlook when searching for a freight forwarder is how to send payments. You need to ask yourself, “do I need a better way to pay my freight forwarder?” BlueX Pay is an online payments platform that allows you to send payments across borders with the click of a button. It’s a lower-cost, time-saving alternative to many other payment methods, with transactions costing as low as $2.
In addition, BlueX Pay-it-Later offers shippers and freight forwarders up to $1M with 30 days to pay.
Interested in learning more? Contact us at sales@bluextrade.com.