What is a Freight Forwarder?
Freight forwarder is a company that works as an intermediary between the shipping companies and businesses that need shipping services. Freight forwarders do not ship the consignment themselves, but they make all the necessary arrangements for the successful shipment of consignment from the source to destination.
Freight Forwarders are responsible for making arrangements like strategic logistics planning, execution and movement of consignment across international borders on behalf of the shipper. The most important responsibilities of a freight forwarder are warehousing goods, freight charges negotiations, custom clearance and documentation, consignment tracking etc.
What does a Freight Forwarder do?
Freight forwarders are specialized logistics intermediaries who perform several tasks to ship goods from the point of origin to the destination. Freight forwarders help shippers navigate the often complex world of international shipping by handling tasks like booking cargo space, preparing documentation, and ensuring compliance with customs regulations.
They act as intermediaries between shippers and carriers or shipping companies. They are adept at selecting the most efficient transportation methods, whether by sea, air, road, or rail, to ensure goods reach their destination in a timely and cost-effective manner.
Process of Freight Forwarding in Logistics
Preparing Export Documentation
Step 1: Preparing Export Documentation
The first step in forwarding shipment from the point of origin to the destination is preparing documents required for the export of goods. The necessary export documents are a Bill of Lading, Commercial Invoice, Bill of Export issued by ICEGATE, Proforma Invoice, Purchase Order, Certificate of Origin, Bill of Exchange, Letter of Credit, Quality check certificate, and Import Export Certificate(IEC) and declaration of hazardous goods.
Export Haulage
Step 2: Export Haulage
The next step is to transport goods from the shipper’s location to the freight forwarder’s facility. The time taken in completing this step depends on the type of goods, location and distance between the shipper and freight forwarder. Generally the goods are transported to the forwarding facility via road transport.
Quality Check & Inspection
Step 3: Quality Check & Inspection
In the next step, the goods will be received at the freight forwarder’s facility for inspection and quality check, and then final confirmation is given for the safety of the consignment.
Custom Clearance
Step 4: Custom Clearance
Before the cargo ship leaves the country with the consignment, it is very important to receive custom clearance from the place of origin. The process of custom clearance is generally carried out by the custom house agents. This part of freight forwarding procedure is also sometimes initiated by freight providers at times.
Origin Handling
Step 5: Origin Handling
The freight forwarder may perform a range of duties during the initial handling phase of the operation. This process commences with the arrival and unloading of the shipment. Furthermore, the cargo undergoes a verification process against the booking details before it is provided with a cargo receipt from the forwarder.
Import Customs Clearance
Step 6: Import Customs Clearance
Customs authorities in the receiving country need to authenticate the import documentation once the cargo reaches its destination. The process of import custom clearance can start off even before reaching the consignment in the destination country. When the shipment finally reaches its destination, the freight forwarder or the appointed customs broker must have already wrapped up the clearance process.
Destination Handling
Step 7: Destination Handling
Destination handling encompasses a series of tasks carried out at the freight forwarder’s destination office. This process commences with the reception of documents from the origin office or agent of the freight forwarder, followed by a meticulous examination of these documents. Subsequently, the original carrier bill of lading is submitted to the shipping line.
Import Haulage
Step 8: Import Haulage
In this step, the consignment is transported from the warehouse to the final location or the desired destination of the ultimate consignee. The goods may be transported by the freight forwarding company or it may directly be collected by the consignee.