Whether you are planning to expand your business or eyeing a new market, finding the right logistics partner is the key.
You might have heard of freight forwarders but are unsure if it is the right solution for you – Fret not, we’ve got you covered. In this article, we’ll explain what a freight forwarder is, how it works, what are some of the best freight forwarders and how to find the right one for your business.
A brief glimpse into the topic
What is Freight Forwarding, and How Does it Work?
Freight forwarding is the process of exporting and importing goods throughout the supply chain. A freight forwarder oversees the seamless transportation of your goods from origin to destination.
In most cases, freight forwarders do not move the cargo, but they use their relationships to negotiate and get the lowest prices to ship the cargo.
The process runs efficiently and takes effective routes, so it’s quick, cost-effective, and reliable.
In general, a freight forwarder offers the following services:
- Air, ocean, rail, and road freight services
- Transportation within the country from origin and/or to destination
- Warehousing and storage services
- Cargo insurance
- Customs Compliance
As an individual or a business, you can decide the extent of involvement you want from the freight forwarder.
Let me explain the whole process with an example.
Say you are a private label seller on Amazon, and a factory in China manufactures your products. You can rely on a freight forwarder to transport your products from the factory warehouse to the nearest port by road freight (or a truck).
At this point, the freight forwarder arranges ocean freight (or air freight). It includes booking cargo space, managing documentation such as the bill of lading, and ensuring that your shipment is moved as per international shipping regulations.
Upon arrival at the US port (destination), the freight forwarder handles customs clearance processes. They help submit the necessary documentation, pay duties and taxes, and ensure the goods meet all regulatory requirements.
They also manage the inland transportation of the products from the port to your warehouse or the Amazon FBA warehouse. This ensures a seamless transit by coordinating with the trucking companies.
The freight forwarder may also handle warehousing, distribution, and risk mitigation services based on your needs.
Throughout the process, they manage the complexities of international shipping, allowing you to focus on your core operations.
Do You Really Need a Freight Forwarder?
It’s not impossible to ship your products without a freight forwarder. Besides, there is more than one way to manage your shipping and logistics needs.
For instance, if you are looking for an outsourcing partner to manage end-to-end logistics needs, including picking, packing, storing, and fulfilling your orders, you can choose a 3PL provider like Amz Prep. Over the years, Amz Prep has built strong relations with shipping carriers, technology partners, and all the key players in the industry and continues to be the best 3pl for Amazon FBA. So we can get you the best prices to save you time and money.
Alternatively, you can hire an in-house team to handle your shipments directly or collaborate with your suppliers and buyers to coordinate and streamline your shipments.
Before you consider whether you need a freight forwarder for your Amazon FBA or other business, consider the following aspects of your business.
a. Volume of Goods
Can you get the best prices based on the volume?
If the answer is no, you should look for a freight forwarder. They will negotiate the best deals with the carriers because they work with high-volume goods.
In general, shipping companies don’t even want to negotiate if you don’t ship in large volumes several times a year. If you ship in large volumes, you’d be able to get reduced rates.
But that’s just one piece of the puzzle.
Let’s say you are shipping overseas. You’ll also need to handle inland transportation once your goods arrive at the other location. You need to find and hire a customs broker and negotiate the price. You can opt for a freight forwarder and get all your tasks done by the expert.
b. Risk Profile
You can always anticipate and be prepared for all the logistics challenges. The truck might break down, or an issue might occur with a new route. You need the right people in the right place to address these issues. You should estimate whether you can afford a lost shipment or handle the consequences.
Also, let’s face it. The likelihood of your products moving from one point to another without a hiccup is slim.
Freight forwarders are usually ready and equipped to face these problems because they’ve dealt with them before. They will have the bandwidth and network to do just that. You don’t have to worry about the goods.
c. In-house Vs. A Partner
Depending on your company size and structure, you can handle shipments yourself or hire in-house employees that you can train to manage your logistics.
However, it doesn’t end there.
You must prepare for constant logistics challenges and troubleshoot steps to resolve them periodically.
It can cost you a fortune.
So, find a freight forwarder who stays on top of ever-changing rules and regulations. It’s a smart move for your business. You can avoid all the storage fees and additional costs and get the job done hassle-free.
d. Global Expansion
If your business wants to expand overseas, you might want to consider a freight forwarder to avoid unnecessary hassle. These forwarders simplify global shipping and easily establish connections in other countries. They leverage people who speak local languages and understand their traditions so you can succeed in expanding your business globally. They can make the job quick and cost-efficient for you.
e. Industry Experience
A partner who knows the shipping operations in your industry is incredibly helpful. With years of experience, the freight forwarder knows the ropes and gives you better solutions. They help you deal with any issues and are well-versed with compliance and regulations across various industries and countries.
How to Choose a 3PL for Your Amazon Business
How to Choose the Right Freight Forwarder for Your Business
Before selecting the right freight forwarder that fits your requirements, here are some parameters you should consider.
Know Your Needs
There are different types of freight forwarders out there. You should find the right freight forwarder that aligns with your objectives.
Here are a few ways to shortlist them:
Industry-specific needs: These forwarders specialize in certain industries like hazardous goods, bulk materials, fresh produce, etc. If your goods require specialized handling or other transportation needs, we suggest you seek out specialized freight forwarding companies.
Type of services: You can begin by understanding the transportation mode you want to choose. Depending on your business needs, you need to filter specific services that you want from your freight forwarder. These include air freight, ocean freight, or other transportation methods.
Find a freight forwarding company that offers a range of services – whether it’s Roll-on, Roll-off (RORO), FCL (Full Container Load), LCL (Less than Container Load), or other specialized services. Along with these services, opt for forwarders who can help you with the paperwork and necessary documentation for international shipping. They should also coordinate with customs to ensure a smooth transportation process. In addition, you should get all the details and updates of your shipment from them.
An accredited freight forwarder complies with and adheres to the industry standards and regulations. This ensures effective communication, appropriate documentation, and timely deliveries of goods.
Global Strategic Network
Networking is one of the crucial aspects of an efficient freight forwarder. These companies strategically place their businesses in the industry and create a collaborative environment that fosters profitable relationships.
When you’re a part of such a network, you can access their partners, who offer you lucrative rates. Moreover, you can seamlessly expand your operational reach without any hiccups.
Undoubtedly, customs clearance is a significant benefit of working with a freight forwarder. With their support, you don’t have to stress about classifications, duties, or taxes because they know the ins and outs of international trade rules. So they will communicate with customs on your behalf.
Each business is unique. Your freight forwarder should be flexible enough to negotiate prices based on your unique business requirements.
Much has been said about the digital era that we live in. Similarly, freight forwarders must adapt to the changing technology and enhance efficiency and visibility. Real-time tracking and data analytics optimize logistics, enabling precise shipment monitoring.
Besides, communication platforms help in seamless collaboration among stakeholders, enabling instant access and transparency to shipment details. So ensure your freight forwarder leverages analytics and technology to expedite the traditionally complex freight forwarding tasks and provide you with more streamlined and reliable services.
This goes without saying. The best freight forwarders in the market generally give you the most competitive shipping prices. You also need a reliable partner who can deliver your shipments without issues. This way, you can minimize your shipping expenses, which, in turn, boosts your company’s profits.
Familiarity with Amazon FBA
If you are an e-commerce brand, chances are high that you’re already selling on Amazon or planning to do so. Selling on Amazon with the FBA model is profitable, but it’s no easy feat. So it’s better if your freight forwarder knows the nitty-gritty of Amazon FBA (Fulfillment by Amazon).
The reason, you ask?
Firstly, Amazon has specific and stringent policies for shipments entering their fulfillment centers. This includes labeling, packaging, documentation, etc. A knowledgeable freight forwarder can comply with Amazon’s standards and avoid delays or issues during the process.
On the other hand, your freight forwarder should know optimized shipping strategies for Amazon FBA. They should factor in inventory placement options and cost-effectiveness and efficiently deliver goods to Amazon warehouses.
Shared Responsibilities With Your Freight Forwarder
A freight forwarder can help you manage your shipments. But you cannot rely on them for everything. There are specific tasks that require collaboration to ensure a seamless process.
The important ones are:
- Export Document Creation: The freight forwarder helps you create the commercial invoice, packing list, and bill of lading. However, you should provide accurate and detailed information about the goods, their value, and their destination.
- AES Filing: AES (Automated Export System) is specific to the US export regulations. While forwarders can handle filing, you should give the shipment details.
- Product classification: Proper classification of products is essential for customs clearance. Their team will assist you in identifying HS codes for your goods. You should ensure accurate classification of the products.
- Compliance: Both you and the freight forwarder must work together to ensure compliance with export and import regulations while handling international shipments.
The 4 Best Freight Forwarders For Your Business
We have compiled a list of the best freight forwarders that can support your Amazon business or any other business for that matter. Here are some of the best freight forwarding companies in the industry.
a. DHL Global
Founded in 1969, DHL is one of the leading companies in the logistics industry. DHL Global Forwarding is a division of DHL Global that oversees freight forwarding services, including air, ocean, rail, and road freight services. They also support cargo insurance, customs clearance, integrated solutions, and e-commerce parcel delivery for small, medium, and large enterprises.
On average, DHL delivers 1.8 billion parcels per year.
Known For: Competitive quotes and fast deliveries
- Global reach
- Sustainable supply chain
- Same-day deliveries
SmarteFreight is a well-known freight forwarder in the US and Canada. They have a team of professionals with decades of supply chain and logistics experience who can manage all aspects of the supply chain, freight management, and more. They offer industry-best rates for dispatching, tracking, booking, and administration requirements.
Known For: Competitive rates, comprehensive services, and efficiency
- Wide range of transportation services
- Warehousing and distribution
- Great customer support
Flexport is one of the best freight forwarders that gained popularity with its innovative approach to international logistics. They provide an online dashboard where you can easily understand, purchase, and manage all the services. Their real-time tracking and visibility of shipments ensure a transparent and efficient experience for their clients.
Known For: Global network and enterprise solutions
- Custom solutions
- Collaboration tools
- Compliance management
UniCargo offers end-to-end freight solutions, including international freight, customs clearance, and warehousing. Besides, they provide digital freight solutions that combine technology with logistics to streamline the shipping process, which makes them one of the best freight forwarders.
Known For: Online businesses and custom solutions
- International Freight
- Customs clearance
- Cargo insurance and other support
Frequently Asked Questions on Freight Forwarders
Freight forwarding is a tailored service, so unlike off-the-shelf products, you can’t get a fixed pricing. The prices often vary based on the shipment origin and destination, transportation mode, volume of goods, and additional services you may require.
While both play crucial roles in shipping, Amazon freight forwarders offer broader logistics services than shipping agents. Amazon freight forwarder provides extensive solutions that include managing shipping processes and coordinating transportation, documentation, and customs clearance. On the other hand, a shipping agent typically focuses on vessel-related activities like booking cargo space and overseeing port operations.
A 3PL (Third-Party Logistics) provider offers various logistics services, including warehousing, distribution, and supply chain management. While Amazon freight forwarders are often specific to shipping, a 3PL like Amz Prep provides all-inclusive logistics solutions.
A customs broker helps you in the clearance of goods through customs, ensuring compliance with customs regulations and handling relevant paperwork. While an Amazon freight forwarder handles overall logistics, providing the shipment of goods from origin to destination, paperwork, and more, a customs broker focuses solely on the customs clearance aspect of international trade.
They ensure safety by implementing secure packaging practices, minimizing the risk of damage during transit. They also collaborate with trusted carriers and track the shipments in real-time. They often provide insurance offers that can protect goods against potential losses.
Yes, many Amazon freight forwarders offer customs brokerage services, assisting businesses in navigating customs regulations and ensuring smooth clearance of goods.
Look for industry certifications, read customer testimonials, and check their experience, global network, and reliability in handling shipments similar to yours.
Most Amazon freight forwarders can typically manage shipments of different sizes, from small parcels to large containers. However, we suggest you communicate your requirements and preferences with your Amazon freight forwarder and get a custom quote before you proceed further.
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