4 Tips You Should Understand Before Choosing a Freight Forwarder
Today’s supply chains move quickly, and often involve many different pieces from different locations that need to be brought together and delivered on time. This means the freight forwarder you select should be able to pull a lot of different parts together in a way that will optimize processes, reduce costs, and provide consistent service.
These tips will help you choose the freight forwarder that best suits your business.
Rates Are Not Everything
There is a common misconception that there are rates that are a lot cheaper than what you are paying, but all freight forwarding providers are using the same steamship lines. There are less than 20 major steamship lines in the Transpacific Trade. Rate variation from freight forwarder to freight forwarder is very slim, the difference between a 10,000 x 40’ contract and a 1,000 x 40’ contract is sometimes less than $25 per 40 ft. So, there are no especially low rates if you are shipping standard 20' or 40' (or HC) containers.
Moving Freight Is Complicated
In today’s world, a large number of complicated government regulations are a major obstacle to importing and global commerce. Dealing with each country’s customs issues is very complex. It requires a lot of knowledge and expertise when importing and exporting goods, dealing with customs, Advanced Manifest Systems (AMS) filing, Customs Trade Partnership Against Terrorism (C-TPAT), Import Security Filing (ISF) etc. Regulatory mistakes can not only result in painful and costly fines for your company, but as the Logistics Executive you could even face jail time for violating the regulations.
You Need Liability Insurance
Just because a freight forwarder has liability insurance does not mean your shipment is protected.The insurance protects the freight forwarder, not the shipper. If you ship a container worth $500,000 with any freight forwarder or carrier and something happens to it, you not will receive $500,000 in compensation. Most freight forwarders never explain it to their clients until something “happens.” First, as explained earlier, avoid freight forwarders that don’t have insurance. The law limits the liability of a freight forwarder acting as a carrier (ocean or air) to $500 per freight unit e.g. a container. So, if you ship expensive items like electronics, you should protect yourself by acquiring the appropriate cargo insurance to protect your interests and should be considered as an expense on top of the freight forwarder’s rates.
Not every freight forwarder can handle every single freight service. For example, if you want sushi, you go to a Japanese restaurant, not an Italian one, right? In fact, each company’s set-up could be different from country to country. For example, Transmodal has been handling cargo from China and Hong Kong for more than 20 years and is therefore an expert in this market. But if someone wanted us to handle cargo from Namibia, then we would rather recommend using other freight forwarders because Transmodal’s expertise in Namibia is limited (although we could handle that freight). To find the right freight forwarder for your cargo you should check references and give trial shipments before committing.
In the end, when choosing a freight forwarder, you should find one that is a trusted partner for your logistics needs and will help your business grow.