Freight forwarders are silently impacting the supply chain industry by increasing its efficiency and reducing costs. Freight Forwarders is a name that is often associated with a shipping company, but it doesn't mean freight forwarders are limited to shipping companies only.
Freight is one of the most important parts of trade and supply chain management. Freight forwarders are playing a crucial part in the supply chain industry. They play an important role in the commodities trading business and other services that involve the movement of goods across international borders. Freight forwarders are considered to have a pivotal role within the logistics industry, as they create flexibility for trades across industries and nations.
What is Freight Forwarding?
Freight forwarding is a process of transporting goods from their source to the end consumers by using various means of transportation such as airplanes, sea, trains, and road transport. The industry has grown tremendously over the years because it helps in reducing costs as there is no need for storage facilities or warehousing.
The Role Of Freight Forwarders In Supply Chain
The role of freight forwarders in the supply chain industry is to provide a service to importers and exporters, who are looking to import or export goods. Freight forwarders can be considered as one of the most important players in supply chain, which is an industry worth over $15 billion. They have a very critical role in ensuring the smooth flow of goods from one country to another.
Also, according to ProcurementTactics, “The Transportation Management System (TMS) is expected to have a compound annual growth of 11.7% from 2021 to 2028. There was an increase from a market value of $120.70 billion in 2021 to a predicted $261.89 billion in 2028.
Furthermore, The Global Logistics Automation Market has the highest CAGR of any supply chain market and is expected to grow above $82 billion by 2026.
Aside from logistics, freight Forwarders are also responsible for ensuring that all the documents required for importing or exporting goods are prepared, authenticated, and delivered on time. They also ensure that proper documentation regarding insurance and customs clearance is provided for all shipments. The freight forwarders also ensure that there are no delays in delivery due to any reason whatsoever.
It is important to note that there are several types of freight forwarders, such as large-scale commercial forwarders and small-scale commercial forwarders. Large-scale commercial forwarders are capable of handling large quantities of cargo at a time while small-scale commercial forwarders work with smaller amounts of cargo but within a short time frame.
6 Key Roles of Freight Forwarders in Supply Chain
When you're looking for a freight forwarder, you probably want to know what they do. In general, freight forwarders play an important role in supply chain management. They take care of the physical aspects of moving goods from one place to another.
Here are five key roles that freight forwarders play in supply chain:
Import & Export Documents
The freight forwarder is responsible for importing/exporting documents such as visas, permits, permits, and other documentation related to importing and exporting goods across international borders.
They ensure that these documents are valid at all times and that they have been updated with the latest changes by respective government authorities concerned with the import/export of said goods so that they can act as an interface between buyer and seller on behalf of the buyer and seller respectively when required.
Customs Brokerage
This is one of the most important and vital roles played by freight forwarders. The nature of their business requires them to deal with all types of documents, including customs, foreign trade, and import documents.
Freight forwarders are also required to manage and keep up with the changing laws related to import/export in order to help their clients comply with the relevant regulations and make sure that there are no delays in the importation process.
Insurance and Risk Management
Insurance and risk management are two key areas where the role of a freight forwarder can make a significant difference. Many companies have limited resources, and they don't have the time or expertise to manage their own insurance needs. They may also feel that their current carrier is not providing them with all the coverage they need.
A freight forwarder can take on this responsibility, providing you with an alternative carrier that can handle your entire insurance portfolio. The added convenience of having one carrier handle everything is often enough for companies to switch providers for this purpose alone.
Networking and Scheduling
Freight forwarding companies can help you find the lowest cost, most efficient method of transporting your cargo to its final destination. They can also help you schedule your shipments by matching them with the most appropriate carriers and vehicles, as well as helping you make sure that they meet all of your legal requirements. Freight forwarding companies will provide you with the best alternative transportation options if necessary, such as road, rail, or air freight.
Consolidation
Many businesses will use a freight forwarder to consolidate multiple shipments into one container or box for easier handling and transport. This is especially useful when sending smaller cargo from one location to another, but it’s not limited to just that – you can also consolidate shipments from different locations within the same country so that they are shipped together in one container rather than having to be sent separately on different vessels or planes.
Warehousing
Freight forwarders may offer warehousing services for those who want their products stored in warehouses near their customers' facilities so that they can be delivered quickly when needed. This type of service is useful for companies with large inventories or ones that sell a wide range of products in multiple locations around the world but do not have any warehouses of their own nearby. This can include warehousing goods while they're en route, or storing them at a facility close by until someone needs them.
Customer Service
Customer service is another key role played by freight forwarders in supply chain management activities such as receiving requests from customers for shipments, managing customer complaints, and handling complaints from customers regarding delays in shipping services, etc... These services help ensure that your customer's needs are met efficiently without any hassles or delays.
Conclusion
Freight forwarders are a vital link in the supply chain of any company that is concerned with efficiency, cost-effectiveness, and security. They provide companies with a wide range of services, help them to reduce their costs, and allow them to focus on their core business activities by handling all aspects of complex transport. Freight forwarding companies are more than just a way to get products from place to place; their services can be an invaluable tool for companies that rely on international supplies.
