So you might be thinking, why would I need the help of a freight forwarder when I have 10+ years experience in supply chain myself? In this post, part of our 'Freight Forwarding Basics' series, we explore 10 ways that freight forwarders add value to your supply chain.
#1 Specialized Expertise
Moving goods from A to B is no easy task – especially moving goods internationally. A specialist freight forwarder will make the process far simpler for all types of user, from novice importers to global businesses.
So it makes sense to utilise the years of experience that a freight forwarder has. Just as many companies now outsource functions like IT and marketing, there is value in contracting a freight forwarding agent to take on this role on your behalf over having to recruit internally.
#2 Buying power for freight charges
Freight forwarders are independent of any carriers. A key part of their role is finding and negotiating the best value freight charges on behalf of their clients.
Freight forwarders are therefore experts who through their contacts and experience are set up to arrange the best rates available.
Because of all the business they can put a carrier’s way through numerous different clients, freight forwarders are in a strong buying position to drive down prices. Left to negotiate their own rates, very few shippers would have the same leverage, and would end up paying higher rates than an agent could negotiate on their behalf.
A freight forwarder will be able to advise of the most cost effective shipping method as well as helping its client to balance both cost and value. Whichever mode of transportation you choose, it’s likely that you’ll benefit from the freight forwarder’s good relationships and connections when it comes to the bottom line.
#3 End-to-end service
Freight forwarders have a global network of partners which cover the full range of services required in the transportation of goods.
Relationships with other freight forwarders, with carriers, with ground handlers and warehouse operators, with customs and financial brokers and local logistics services, are all part and parcel of what freight forwarders offer. The result is a truly end-to-end service, taking responsibility for delivering seamless movement of goods from door to door.
#4 Global network benefits
Carriers have very different commercial objectives to freight forwarders. They will operate the most profitable routes, and aim to attract as much business as they can for those routes.
Freight forwarders have to take a much broader view. Rather than focusing on a particular number of routes, it makes sense for them to be able to provide services wherever a customer may need them. Therefore they establish global networks of contacts so they are able to facilitate the movement of goods wherever the client requires.
As well as offering cost-effective transportation choices, freight forwarders also connect buyers to suppliers, and facilitate buying and selling in large quantities, which leads to lower prices along the supply chain and cheaper goods for the end buyer.
A reputable freight forwarder has built its business on moving goods in a reliable and timely manner, so shippers can rest assured that delivering excellent service matters. And if an issue does crop up, a freight forwarder is likely to have contingency plans in place to counter it, therefore minimising the effect on the client and their business.
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Shippers always want need to know two things: “Where are my goods?” and “What does it cost me to get them to my customers?”.
Freight forwarders answer these questions daily, and the ones who can answer accurately are the most valuable to their customers. Tracking & tracing, price forecasting and the timely delivery of such information is crucial to shippers and receivers. Great freight forwarders make this transparency a core part of their service offering to clients.
Freight forwarders utilise the very best technology to ensure the reliability and transparency that’s important to their customers. Tracking technology, for example, is crucial, as it enables the client to keep their customer or end user informed.
Time is money, and utilising the services of a freight forwarder can save a business both. Taking care of the entire process of moving goods is time-consuming, meaning additional work hours that a business has to pay for. A freight forwarder frees its clients from the time, stress and hassle involved, and outsourcing to an expert can often be more cost effective than trying to struggle through the process yourself.
The technology and streamlined systems utilised by freight forwarders mean that the shipping companies, ports and other service providers that they deal with also benefit from quick, efficient transactions.
Freight forwarders also help businesses react faster to changing business needs. With value-added operations close to the end customer, shippers can delay product configuration until the last possible minute to respond more accurately to customer demand.
#8 Valuable Link Between Buyers and Sellers
Moving goods around the world can be complicated, so having a specialist facilitator to make it easier for buyers and sellers to trade is important and valuable. A freight forwarder helps to unlock a global market contributing to strong economies and making goods more accessible.
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#9 Accountability and visibility
A lot of freight intermediaries will focus on “personalized service” as their competitive advantage. But what exactly does that mean? Customers don’t care about the “person” per se.
What they are looking for is an understanding of their business needs and a solution to their problems. Successful freight intermediaries are the ones who realize this and proactively solve problems like price changes, capacity contractions, trouble spots and above all hold themselves and their vendors accountable for the results a customer needs to succeed in international business.
The common thread to all of these attributes is visibility. It takes visibility to recognize the value of each mode of transport. It takes visibility into market conditions to make the call between price and cost. It takes visibility to understand client business goals and to be responsive to those needs.
Finally, the complexity of international shipping should not be taken lightly. Documentation and administration is a key part of the process, with the need to meet legal and regulatory requirements across different jurisdictions. Shipping and export documents, bills of lading, document delivery, letters of credit and customs declarations are all critical.
Getting something wrong on the paperwork can lead to punitive additional costs or even fines.
For peace of mind, it makes sense to employ qualified, experienced professionals who understand the precise requirements in every jurisdiction. Getting things right first time saves a lot of hassle and money in the long run.
Want to know more about how freight forwarders add value to your supply chain? Don't hesitate to contact one of our friendly consultants who can answer any questions you may have.
Whale Logistics are Australia’s leading Freight Forwarder and Logistics company located in Sydney and Melbourne. We deliver digital services such as Australian customs parcel tracking, parcel delivery box, and comprehensive ocean, air and road freight solutions.