Picking the Right Freight Forwarder
Everyone ships, regardless of industry, and your profitability is influenced by the shipping prices you get, which is why it’s incredibly important to find someone reliable that fits your company’s freight needs. But there are thousands of freight forwarding companies out there, so how do you know which one to use?
First, it’s important to look at yourself, as a company.
Do they fit our needs?
What type of company are you? What is the cargo you’re going to ship? Is it always the same?
Packaged the same? Might it be hazardous? There are many types of shipping, and determining which ones your company needs is vital to creating a mutually beneficial partnership between you and your forwarder.
An experienced freight forwarder could help you figure out exactly the services you need, and an honest one would tell you if they can offer you that service or not, but once you figure out the specificities of your forwarding needs, it will be easier for you to decide on who to use.
Research is key, don’t shy away from a company who might have Nike as their client or even a startup offering a new type of service, everyone has their strengths and weaknesses, you just need to be well informed and trust your gut.
Some things to consider:
Is the forwarder big enough to handle your business?
In most cases, a multinational retail giant like Walmart, wouldn’t use a tiny, start-up forwarder because they’re not equipped or don’t have the contacts to handle the business, so they might look to a larger, more established handler. But you never know, every load and shipment is different.
Generally, it’s best to NOT let cheap freight rates be the sole determinate for which forwarder you choose. Freight forwarding is a service and things can go wrong very quickly, so you want someone you can trust, who can help guide you from pick up to delivery.
Do they have service contracts to your destinations?
Shipping dates and transit times might be essential to your business. If so, you want to work with someone, who has the right carrier contracts to get your goods on the vessels and off to their destinations, when you need to. This is especially important for retailers and distributors in peak season (holidays and whatnot), when space on container vessels is more scarce and when strikes usually happen. If a forwarder has more than one carrier option or multiple contracts in place, then the chance of your cargo getting on board and shipped, will be greater. Sometimes unforeseen delays occur, and a good forwarder will always find an alternate option, before or during the course of your shipment, through their various connections and carrier contracts.
Does the forwarder specialize in certain commodities?
It’s not rocket science. If you ship chemicals, you probably want someone who is knowledgeable and experienced shipping the same or similar chemicals. They’ll know exactly how to pack and crate it, what documents need to be processed, what mode of service you need, and so forth.
But companies that deal specifically with one thing might be more expensive, due to their own handling, storage, or personal needs.
Test the Quality of the Customer Service
One thing that is crucial is communication. Even before services kick-in, you want someone courteous and responsive. Someone who will consider all your needs before you do.
A company that makes you sift through a few secretaries before getting to the right person might not make you feel as important as someone from a smaller office, but try to really gauge the level of service you receive, even if it’s just over the phone or through an email. Never settle, because it could mean the difference when something goes wrong later. And in shipping, things go wrong a lot and can escalate very quickly.
Also, be sure to read their terms and conditions, so there are no surprises later.
Some things to consider:
Have the staff been versed in the latest compliance regulations?
Wordy, I know. But super important. All this means is that the staff are knowledgeable of the latest shipping and custom compliance rules, so that you avoid problems at the ports, later. Regulations and laws change often, especially when it comes to shipping, so it’s important for the company you hire to be made aware and have plans in place to tackle these tricky regulations. But a good forwarder has already seen the changes coming and stays up-to-date on all things shipping, all the time. If you get a lot of Ooh’s and Umm’s, maybe they’re not the answer, or at the very least, another thing to consider during your cost-benefit analysis.
Are you getting the information you need and in a timely manner?
This goes back to the idea of being coddled. Wouldn’t you, as the customer or shipper, like to receive regular updates about your shipment, rather than wait and pray that it gets delivered on time? And if things go wrong, such as strikes and shutdowns, rerouting cargo or customs problems, don’t you want to know ASAP, along with possible solutions and costs? Of course, you would. Make sure you’re not just another number on a screen. Attitude reflects treatment.
Nowadays. almost everything is automated, make sure your forwarder provides you tracking and 24/7 support in case things go wrong.
Any affiliations or credentials?
A shipping company that’s not well-connected might have a harder time delivering the services you want. Logistics is about connection and reaching out to the right people. The more resources and agents your forwarder has, the safer your cargo will be. Though too few or too many might be a little fishy. Vet any associations or groups the forwarder might belong to, but usually, the good ones require proving professionalism, legitimacy, efficiency, and financial stability. The ideal forwarder will have all of these.
It can’t hurt to request a copy of the broker’s operating authority. Compare all the company’s information, make sure the motor carrier number and dates are the same as in the FMCSA database. Any discrepancies could speak to their validity. Steer away from legal troubles when possible, and check in advance to see if a broker has a current registration.
Is your forwarder insured?
Every shipping company must have an insurance certificate and you shouldn't hesitate to request a copy. Make sure, again, to verify that everything is correct. If you can contact the insurance company and ask them if the policies are still in effect, it should help to put your mind at ease.
Regulators will hold the exporter responsible (not the forwarder) if information submitted to US Customs for imports or exports are mis-declared or inaccurate. Forwarders rely on and declare based on information they are provided by the exporter or shipper of record. Become familiar with U.S. export regulations and where your company falls under those regulations and what your responsibilities and duties are to the transaction.
Also, many freight forwarders offer reduced rates to customers in the hopes of winning them over at first, then charging hidden fees or hiking up the prices next time. Don’t be fooled. Do your homework, speak to people and references, talk to the staff, get a sense of their professionalism, visit their websites, don’t quit until you feel comfortable trusting these people. This is your business, your baby, you wouldn’t trust it with a stranger, would you?
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