Whether you are just starting out or have been established with your eCommerce store, you may be wondering 'Should I use a Freight Forwarder for my ecommerce business?' In this Freight Forwarding 101 blog post, we go through why you should go with a freight forwarder or courier in the context of an ecommerce business.
The answer to what you need or don't need is often very dependent on your own business situation. Are you just starting out? Then read over whether you need a freight forwarder at all. Do you already know what you are shipping, how much, and how often? Then keep reading.
Ship a lot, inside the country?
Going straight to a carrier can be a good idea if you ship a lot. And, I mean A LOT. Like, dozens of shipments a day. You’ll most likely get the best contract rates this way. However, a carrier usually specializes in a set of services, type of equipment and region. So, by signing a contract with just one carrier you are limited. If you require a variety of freight services and plan ship to a variety of different places and choose to go the carrier route, I would recommend finding 2–5 carriers you’d like to work with.
In Australia and don't know which courier to choose? Read this blog post for our run-down on a number of couriers in Australia.
Ship internationally and need storage options?
Using a freight forwarder is a good option if you import and export goods and need someone to arrange storage of your products or materials. A freight forwarder acts as the “middle-man” between a shipper and various carriers. It has the ability to negotiate great prices with those carriers. A freight forwarder, like a carrier, is obligated to process claims since they are fully responsible for any loss or damage to the shipment.
Ship internationally to multiple different countries?
To more advanced ecommerce players, you may be looking at wanting to expand to multiple countries. For example, many set up their own distribution centre to avoid consumers having to pay hefty duty and tax. In this case, a freight forwarder will be better as they can have a tailor-made solution for your own supply chain, and whether you need any special requirements, door to door service, longer credit, single window service (one point of contact). They will also be able to bundle services and offer better rates.
Don’t require storage options, but would like more ecommerce-specific logistics services?
If you don’t need assistance storing your products or materials, you should consider working with a 3PL, or third-party logistics company. A 3PL works as a freight broker, but offers additional technology-related logistics tools for businesses. It’s similar to a freight forwarder in that it has a large network of carriers that it contracts to ship its customers’ freight. However, a 3PL is usually non-asset based and therefore never handles or stores the freight itself.
See our blog post on the difference between a freight forwarder and a 3PL. Keep in mind that gradually these roles are blending and a 3PL and freight forwarder may only differ in what they choose to call themselves.
If you are an ecommerce business looking to expand or simply have further questions, contact one of our friendly Customer Success Managers for an obligation-free discussion. Whale not only specialises in sea freight, air freight, and customs clearance, but has helped multiple of our ecommerce clients grow $100k+/month businesses. We have warehousing solutions including warehouses in Shanghai, China and Sydney, Australia. We also work with our clients to help pick, pack, and deliver with major couriers in Australia.
Are you thinking of setting up via Amazon FBA? Stay tuned as we will have a blog post on this - or feel free to contact us and chat with our freight specialist.
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