Logistics, or transportation, started out as just animals and people slowly moving products from one place to another. In today’s world, supply chains are faster and more complex, necessitating the need for a middleman. For companies which involved into international export & import businesses, an international freight forwarder is a must.
What is a freight forwarder?
We’d like to share this YouTube video to help you learn more what is transportation and logistics (or freight forwarding).
This is the 4th installment in Arizona State University‘s twelve-part introduction to supply chain management video series developed by Eddie Davila, Jeff Hough, Randy Cates, Dawn Feldman, Dan Ichikawa, Ian Schmoel, and Matt Hardy.
The simplest definition is a travel agent for cargo. Like an agent that plans your entire vacation from door to door, freight forwarders can take care of every detail of getting your goods from the factory to your warehouse.
Freight forwarder job description
Let’s define it from the view of job description.
Freight forwarders arrange the best means of transport, taking into account the type of goods and the customers’ delivery requirements. They use the services of shipping lines, airlines and road and rail freight operators. In some cases, the freight forwarding company itself provides the service.
Companies vary in size and type, from those operating on a national and international basis to smaller, more specialized firms, who deal with particular types of goods or operate within particular geographical areas.
- investigating and planning the most appropriate route for a shipment, taking account of the perishable or hazardous nature of the goods, cost, transit time and security;
- arranging appropriate packing, taking account of climate, terrain, weight, nature of goods and cost, and the delivery and warehousing of goods at their final destination;
- negotiating contracts, transportation and handling costs;
- obtaining, checking and preparing documentation to meet customs and insurance requirements, packing specifications, and compliance with overseas countries’ regulations and fiscal regimes;
- offering consolidation services by air, sea and road, ensuring cost-effective and secure solutions to small shippers who have insufficient cargo to require their own dedicated units;
- liaising with third parties to move goods (by road, rail, air or sea) in accordance with customer requirements;
- arranging insurance and assisting the client in the event of a claim;
- offering tailored IT solutions and electronic data interchange (EDI) connections;
- arranging payment and other charges or collection of payment on behalf of the client;
- utilizing e-commerce, internet technology and satellite systems to enable real-time tracking of goods;
- arranging air transport for urgent and high-value cargo and managing the risk door to door;
- arranging charters for large volume, out-of-gauge or project movements by air and sea;
- acting as broker in customs negotiations worldwide to guide the freight efficiently through complex procedures;
- dealing with special arrangements for transporting delicate cargoes, such as livestock, food and medical supplies;
- arranging courier and specialist hand-carry services;
- working closely with customers, colleagues and third parties to ensure smooth operations to deadlines;
- maintaining communication and control through all phases of the journey, including the production of management reports and statistical and unit cost analysis;
- acting as a consultant in customs matters;
- maintaining current knowledge of relevant legislation, political situations and other factors that could affect the movement of shipments.
Logistics management: cheaper, greener, and more efficient
Logistics management, or freight management, concentrated on lowering shipping costs, but some are also aware of environmental impacts, and through green initiatives, try to minimize harmful effects. With these goals in mind, cargo agents carry out specific responsibilities to make the transportation process stress-free for the shipping companies.
A lot of effort goes into reducing overall freight transport. This is achieved by lowering product volumes and getting rid of any unnecessary packaging.
Nowadays, a shipping agent has been leveraging IT, or information technology. Electronic Data Interchange (EDI) is used for supply chain management software that can automate routing, scheduling, carrier selection, load planning, import, export, and consolidation. This significantly speeds up the transportation procedures, and save shipping cost during the transportation.
Many other aspects of logistics management are carried out with similar objectives. Although some cargo must be delivered by truck, freight forwarders encourage rail and water shipping pathways because these modes of transportation use much less energy and keep more people safe from road accidents.
Energy efficiency is an important feature of transportation which contributes to the green movement. The carriers, like MAERSK Line, are building more energy-saving container ships.
For more efficient
Companies that regularly need to make large shipments require the expertise and efficiency of a professional supplier. With the services and technological capabilities a forwarder provides, transportation can be a simple and smooth process for the firm. While the freight forwarders hassle with the dirty details, the companies can focus on doing what they do best.
It is not just about making the journey of the cargo smooth; it is about making the route as efficient as it can possibly.