​​Hiring A Freight Forwarder: The Complete Guide

Freight forwarders serve an essential role in the shipping industry. They provide an aggregation of all the necessary services that enable companies to have their products delivered to intended destinations on time with insurance and a high level of care throughout the journey.

As with every business and organization, service quality between freight forwarders can differ greatly. Even two equally well-run freight forwarders might have differences as they will have varying networks of carriers and connections, making one more fit for some specific businesses than the other.

What is a freight forwarder?

A freight forwarder is a company that handles the entire shipping process, from product pickup to distribution. These companies can provide varying service packages as some may help bring goods to market or take care of distribution while others will have a less wide-ranging approach.

Additionally, almost all freight forwarders deal with international trade and look for customers who require moving shipments across borders. As such, a freight forwarding company will clear goods through customs on behalf of the customer, hire numerous carriers, change transportation modes, etc.

Shipping methods across freight forwarders may differ according to the requirements of goods and delivery times. While they will opt for the most cost-effective approach, sometimes the requirements might necessitate, for example, the usage of an air freight carrier even if the route could be completed on land.

Finally, freight forwarders are experts at exporting goods and, as such, often serve an educational role for their customers. They may provide insights into product packaging, customs clearance requirements, or other regulatory aspects of the shipping company should be aware.

Why hire a freight forwarder?

While any company can perform every service offered by freight forwarders, getting the same benefits would be difficult as they often get much better rates for carriers, have established connections within government institutions, and have the required legal knowledge for shipping. As such, a good freight forwarder will net any business many benefits.

Experience

A freight forwarding company takes full control of shipping. Companies that hire them can completely forget the delivery requirements and leave the process to freight forwarders. Additionally, they will communicate with all involved parties, ensuring everyone knows about the current state of affairs

Speed

International freight forwarders have extensive carrier networks and route optimization knowledge. Both lend themselves to much greater delivery speeds than possible without a freight forwarding company

Compliance

As freight forwarders are experts at transporting goods across borders, they have a strong foundation in the regulatory requirements between countries and regions. Any company that hires a freight forwarder can be sure that customs clearance will be effective and quick and that any legal issues will be minimized

Guaranteed delivery

Almost all international freight forwarders work within guaranteed delivery times. While delays inevitably happen, freight forwarding firms could be penalized for failing to meet deadlines. As such, companies can expect consistent delivery times, making inventory management a lot easier.

Versatility

International freight forwarders can handle nearly any supply chain with various goods or combinations. Some may focus more on a certain industry; however, you’ll always be able to find a freight forwarding service that can deliver your goods safely and assuredly

Cost optimization

A freight forwarding company holds an advantage over any other business due to its economies of scale. They can get full loads of carriers at much greater volumes than any other company so they can negotiate better rates. Additionally, they are experts in route optimization, which means they can minimize cost per mile

When to hire a freight forwarder?

While freight forwarders are beneficial to nearly any business that deals with shipping, hiring one may not be necessary in all cases. There are many offshoots of freight forwarding (such as brokerages or shipping agents), which provide similar services, but on a smaller scale.

International shipments

Freight forwarders will not be as beneficial if shipping involves only domestic deliveries. These companies are focused on international shipments, which means the associated costs may make such an approach less viable.

Freight brokers provide shipping services for businesses like freight forwarding companies but only focus on domestic deliveries. As such, they may be a much better choice for companies that do not plan on expanding internationally soon.

Complicated routes

If you could transport goods in straight lines worldwide, a freight forwarding company might not be necessary. Unfortunately, almost all international deliveries will have complicated and long routes with a mix of land, sea, and air transportation.

In these cases, shipping becomes so complex that it necessitates a lot of resources dedicated to the process. Companies focused on producing goods might not want to divert so many resources to shipping, making freight forwarding the perfect choice.

Business expansion

Going off the last point, companies might opt for freight forwarders when they are focused on expanding, especially internationally. Expansions have large upfront costs, which are heavily compounded when international shipping gets involved.

A freight forwarding company can lift all the stress and resource costs off of the business, allowing them to focus on expansion.

Cost optimization

In many cases, international freight forwarders will be more cost-effective than establishing the same networks and services for the business. Unless the company in question is enormous, they won’t be able to fill in as many orders for carriers, meaning rates might be worse.

Additionally, delivery and inventory management throughout the supply chain requires dedicated professionals. Hiring them in-house will raise costs, but they might not be as effective as within a freight forwarding company.

How to hire a freight forwarder?

There are many considerations to take into account before hiring a freight forwarder. For example, the route requirements and transportation mode determine the costs, knowledge, and services. Every freight forwarder won’t fit the bill, especially with more complex cargo.

Freight needs

An essential part is outlining your company’s freight and shipping needs. Fragile or sensitive goods may require specific packaging, carriers, and conditions for proper deliveries. For example, pharmaceutical goods often require specific temperatures, so not every freight forwarder can handle deliveries properly.

Budget

A rather obvious concern is the budget. Freight forwarder prices can fluctuate wildly depending on the services offered, routes, and the company itself. As such, some freight forwarders can be too costly, even with their minimal packages.

Capabilities

Finally, you must ensure that the freight forwarder has the necessary capabilities to perform consistent deliveries within all the requirements. Available transportation modes, established networks, and regulatory understanding are all important aspects of figuring out a freight forwarder.

Why choose Spotos as your digital freight forwarder?

Spotos is an industry innovator that has created a marketplace for shippers and carriers, enabling both to consistently find the necessary service provider. Our features are cutting-edge, allowing both parties to optimize costs and communication.

Financial optimization

Spotos marketplace automatically recommends the best price for the shipper according to the available carriers.

All payments and communication happen purely throughout the Spotos platform, with the company serving as an escrow. Payments are distributed automatically upon completion.

In the case of any issues during deliveries, high-value cargo is insured, and the Spotos team handles all claims. As such, Spotos takes care of all the financial processes associated with shipping.

Verified service providers

All shippers and carriers on the Spotos marketplace are verified. Our teams investigate companies that sign up to ensure they are legitimate and can provide services of acceptable quality.

Additionally, Spotos guarantees cargo safety, regardless of the carrier chosen by the shipper, enabling them to work with peace of mind.

In-depth support

The Spotos team provides in-depth documentation and support throughout all steps in the customer journey. Our marketplace is made to be as accessible and as simple as possible to reduce the complexity of shipping even further.

If any issues arise, the support team can always handle claims and discussions and facilitate communication between involved parties.

Conclusion

Hiring freight forwarders is a fairly common practice in the shipping industry. Picking the correct one is somewhat complicated as the companies can differ greatly. While they are almost always beneficial, costs can be optimized by making the correct choice.

Key takeaways:

• Freight forwarders take complete control of the shipping process
• They provide services such as route and cost optimization, clearance of goods, hiring carriers, and picking the correct modes of transportation
• Freight forwarders should be chosen based on freight needs, available budget, and provided capabilities for shipping
• Spotos is a cutting-edge innovator in the freight forwarding industry that provides an online marketplace and application for shippers and carriers