Minimizing Costs and Maximizing Efficiency with International Freight Forwarding Services

Minimizing Costs and Maximizing Efficiency with International Freight Forwarding Services

International Freight Forwarding is a specialized service typically provided by logistics companies that involves managing the many hurdles associated with shipping goods from one country to another. Prior to the pandemic, freight forwarders acted very much in the background, but as COVID-19 played havoc on the supply chain, especially as it relates to global transportation, international air freight forwarders played a critical role navigating lockdowns and travel restrictions. Container movement came to a standstill; air freight forwarders had their hands full in coordinating with airlines, handling the increased volume of expedited shipments, and ensuring that essential goods reached their destinations in a timely manner. 

Hiring an International Freight Forwarder: Requirement or Good Business Decision?

Whether or not you hire a freight forwarder will depend on a number of factors, including the quantity and frequency of shipments, supply chain complexity, and your level of experience in international logistics. However, for many if not most companies, the benefits of working with a freight forwarder, such as reduced costs, increased efficiency, and improved visibility into the supply chain, make it a valuable investment.

The benefits of an international freight forwarding company include:

• Cost savings: Cutting costs with freight forwarding services is possible through negotiating better rates with carriers due to their volume of shipments. Freight forwarding companies can also advise clients on the most cost-effective shipping methods.
• Streamlined shipping process: Freight forwarders handle all the logistics of international shipping, from customs clearance and documentation to cargo tracking, simplifying the process.
• Improved transit time: Freight forwarders can plan the most efficient shipping routes, reducing transit times and getting goods to market faster.
• Expertise in handling regulations: They have a deep understanding of international shipping regulations and can handle customs clearance and other compliance requirements, reducing the risk of shipping delays or fines.
• Door-to-door services: Freight forwarders can offer door-to-door shipping services, eliminating the need for businesses to coordinate with multiple carriers and reducing the risk of lost or damaged cargo.
• Additional services: They can also provide value-added services such as warehousing, distribution, and cargo insurance, further streamlining the shipping process.

In addition to helping you save time, reduce costs, and streamline the complex process of international shipping, freight forwarders free up your resources so you can focus on core operations and achieve greater efficiency and competitiveness in the global marketplace.

How Freight Forwarders Help Businesses Streamline the Shipping Process Through End-to-End Optimization

By acting as intermediaries between shippers and transportation companies, international freight forwarders handle the myriad of global trade details. On any given day, international freight forwarders:

• Coordinate the shipping of goods from the point of origin to the final destination, working with various transportation providers such as air freight, ocean freight, and ground transportation.
• Handle all the documentation required for international shipping, including customs declarations, bills of lading, and commercial invoices.
• Plan and optimize the most efficient and cost-effective shipping route for their clients, factoring transit time, cargo insurance, and storage requirements.
• Manage the risk associated with international shipping, such as cargo damage or loss, by arranging insurance coverage and implementing proper packaging and handling procedures.
• Provide ongoing support and customer service, keeping clients informed of the status of their shipments and proactively addressing any issues that may arise.

Freight forwarders help businesses streamline the shipping process by providing a range of services that simplify and optimize the logistics of international shipping. Some of the key ways they help include:

• Optimizing shipping routes: Freight forwarders have extensive knowledge of global shipping routes and can advise businesses on the best and most cost-effective options for their needs.
• Handling customs clearance: They handle all the necessary paperwork and regulations involved in customs clearance, saving businesses the time and effort of navigating the complex regulations themselves.
• Offering value-added services: They can also provide additional services such as cargo insurance, warehousing, and distribution, further streamlining the shipping process for businesses.

Addressing Challenges in Freight Forwarding 

Cross-border expertise must address culture, currency, language, customs, and regulations on the international landscape. Tariffs change, no two policies are the same, and what was approved last year might not pass this year. In discussing cross-border trade challenges, multinational professional services network, KPMG, cites regulations as a significant issue: "Customs declarations, manifests, product licenses, packaging requirements, export evidence, and invoices – cross-border trade involves significant documentation which varies by market. Simply understanding this regulation provides a challenge to most businesses, let alone full compliance."

More than Modes: Speak the Language, Know the Rules

International domain expertise translates to expeditious customs clearance and compliance, reducing the risk of shipping delays and fines. In addition, freight forwarders will arrange cargo insurance to protect goods during transit and minimize the risk of loss or damage. Then there's visibility; the best freight forwarders have invested in the technology that allows them to track shipments, giving you visibility into the status of their goods and helping you manage your supply chain more effectively.

Shippers also benefit from established forwarders that have a presence across the globe. Their reach allows for access to a network of local relationships with the most dependable carriers to select those with a proven track record of safe and secure shipments, including:

• Air freight: Ideal for shipping small, high-value items with tight delivery deadlines.
• Ocean freight: Cost-effective and suitable for large, heavy items, ocean freight is ideal for shipping bulk goods and full container loads.
• Rail freight: A cost-effective alternative, rail freight is ideal for moving bulk goods over long distances within Europe, Asia, and North America.
• Trucking: The go-to for overland moves in Europe and North America, including ecommerce and the final mile. 
• Multimodal: A combination of two or more shipping methods, often rail and trucking, multimodal transportation offers the best variety of speed, cost, and delivery time.
• Parcel: managing the entire process from pick-up at the point of origin to home or business delivery at the final destination.

Choosing an International Freight Forwarding Service Provider

When choosing a freight forwarding company, their experience and expertise, global network and partnerships, cost-effectiveness, customer service, and technology matters. A good freight forwarding company should offer real-time tracking and visibility, allowing you to stay informed about the status of your shipment at all times. Consider the following factors:

1. Experience and expertise: Look for a provider with experience in handling international shipments and a deep understanding of regulations, trade agreements, and global shipping logistics.
2. Network and partnerships: Look for a provider with strong relationships with carriers, customs brokers, and other partners, as this will allow them to offer more cost-effective and efficient shipping options.
3. Cost: Evaluate the cost of shipping and the fees charged by the provider, including any additional charges for value-added services such as warehousing and distribution.
4. Transit time: Consider the shipping time required and the delivery deadlines for your goods, as this will determine the most appropriate shipping method.
5. Certifications: Are they certified in the service and procedures required to support all customer activities in global markets?
6. Customer service: Look for a provider with a reputation for excellent customer service and support, as this will allow you to get the help you need when you need it.
7. Technology and tracking:  A provider offering real-time tracking and visibility into the status of your shipments allows you to stay informed and in control of your supply chain.
8. Reputation: Research the reputation of the provider, including customer reviews and testimonials, to ensure they have a track record of delivering reliable and efficient services.

Your Logistics Partner: Incoterms & Boots On The Ground

Last but not least, using your trusted 3PL for freight forwarding will bring an extra measure of assurance to your shipment(s). First, when disruptions occur, your 3PL can step in and provide warehousing, repacking, optional carriers, and the like. When your goods are stuck in transit, you'll be glad you've partnered with a full-service 3PL, not a standalone forwarder, to pry things loose and get them moving again. 

Secondly, you can call on your international 3PL to review your contract Incoterms. Incoterms, short for International Commercial Terms, are standardized terms that define the roles and duties of both the buyer and seller when transporting goods across borders. They are included in the sales agreement and dictate who is responsible for paying for various elements of the shipping process, such as transportation, insurance, and customs clearance. In short, shippers can enhance their competitiveness in the worldwide market by effectively negotiating favorable Incoterms.  

Working with a professional international freight forwarding company is essential for businesses looking to safely and securely ship goods internationally. By partnering with a reliable and experienced provider, such as SEKO Logistics, businesses gain access to a global network of offices, agents, and partners for more comprehensive and efficient international shipping services. If you'd like to explore the opportunity to improve supply chain efficiency and ensure your goods' safe and secure transportation, contact our offices today.