Freight forwarders

What is the point of a freight forwarder? What do they do?

They make bookings for you with freight operators and add on their cut which you have to pay to them, which seems as if they are the bad guys. Obviously, there are good ones and bad ones, but every exporter will need one at some point. Even if you have an export freight budget of hundreds of thousands, you will need a freight forwarder at some point. They can avert disasters for the complete novice and offer solutions to the very experienced exporter due to their wider range of contacts. We will try to give you the information to do it yourself and explanations of export documentation, Incoterms and payment methods are given from the menu on the left but a freight forwarder can check that you have done all this correctly as well as getting you a good price for your freight. Everyone has different needs so this will explain how to use them. 

Logistics chain

  The novice

You may need all the help you can get and, initially at least, choose to allow one freight forwarder to handle all your export transport issues. You need to choose a good one and the biggest are not necessarily the best. You should ask them to check all your invoices and documents, ensure your payment and delivery terms are correct and guarantee that your product is delivered and that you are paid. If they do not offer that, they are just taking commissions on bookings and should be avoided. If you are starting to export, this forwarder should be your biggest friend; it is important to build a strong relationship. The first export for a small company often comes from a far-flung place and you need the forwarder. If you are exporting into the EU or other free trade area, they are merely consolidating freight and could either cost or save you money.

The semi-established exporter

How to transport goods depends entirely on the product to be transported. If a typical order is one or more trailer loads or 40' containers, the section on different modes of transport will help more but you still need forwarders. A 20 tonne order will still need a sample to be sent first to secure it. You may need to ship a small quantity to a strange port. You may transport everything by road and are not familiar with sea freight. A forwarder will help. If there is anything out of the ordinary or with which you are unfamiliar, there are forwarders to help. Manage them properly and they will save you a lot of money; allow them to manage you and they will make that money from you.

The experienced exporter

Once you know your customers, your markets and prevailing freight rates, it may seem that a forwarder is irrelevant. You cannot know everything about everything. It is a good idea to select a small group of forwarders who specialise in certain areas. You might need an air freight specialist based at the airport, a Dangerous Goods specialist, an LCL sea freight consolidator and a European road groupage specialist for smaller quantities. You might believe you have negotiated the best rates possible but keeping in touch with forwarders keeps your finger on the pulse.

It would be foolish to recommend specific companies but the British Institute of Freight Forwarders can be found here.


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