What is freight forwarding and how does it work?

January 6, 2023

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We live in a world of global trade. In 2021, over twenty-eight trillion dollars of goods were shipped all over our planet. But what is involved in making sure that a pallet of paint, box of bananas or container of car-parts arrives in the right place at the right time? Let’s have a look at freight forwarding and the role of a freight forwarder.

What is Freight Forwarding?

Freight forwarding is about planning and executing the logistical tasks involved in shipping goods in an efficient manner, ensuring that all legal and customs requirements are adhered to.

According to the UK Government:

Freight forwarding is a service industry that involves moving goods around the world on behalf of importers and exporters. Freight forwarders specialise in moving cargo. They also arrange customs clearance of goods, maintain all documentation, oversee cargo packing and will at times deal with the movement of dangerous goods.

What is a Freight Forwarder?

Freight forwarders are intermediaries, working on behalf of companies who require goods to be shipped and managing the shipment process. A pure freight forwarding company does not carry the shipments themselves, rather working with trusted logistical partners and 3rd parties (3PL), to provide the necessary transportation. This will cover all transportation types, including sea, rail, air, and road.

Most freight forwarders are also Authorised Economic Operators, allowing them to take advantage of simplified customs clearance, including deferred payment of import duties and charges which might otherwise need to be paid before goods are released.

Freight forwarders provide the logistical knowledge and expertise, on behalf of the organisation wanting the goods to be shipped. Businesses benefit from freight forwarders’ knowledge of the global rules and regulations relating to imports and exports, which reduces costs and simplifies the shipping process.

What does a Freight Forwarder do?

There are many tasks involved in ensuring the safe shipment of goods across the globe, these include:

  • Scheduling of cargo space to ensure delivery dates can be met.
  • Negotiating with carriers for cost-efficient shipping rates.
  • Consolidating freight, to reduce costs where customers do not need an entire container.
  • Advice on packaging, labelling, loading and stowing of goods.
  • Shipment tracking to provide visibility of the goods throughout the delivery process.
  • Warehousing, as required, both before, during or after the shipment process.
  • Customs brokerage, to manage the documentation and payments necessary to complete the import and export process.
  • Problem management when issues such as weather and equipment failure intervene.
  • Cargo insurance, to provide protection if goods are damaged or stolen in transit.
  • Reporting on Key Performance Indicators (KPI) such as shipment times and carbon footprint.

What are the advantages of using a Freight Forwarder?

Shipping goods around the globe is a complex task, requiring specialist knowledge and experience. Most businesses simply cannot justify the expense of establishing and maintaining an in-house, dedicated department to focus on global logistics. 

By partnering with a freight forwarding company, businesses can access all the services they need, at a fraction of the cost of doing it themselves, scaling their usage up and down as required. As a company expands into new product areas or to new markets, they can be sure that the freight forwarder will have the specialist knowledge of the rules and regulations applicable to the goods in their new territory.

About AGI Global Logistics

Founded in 2011 we bring more than three decades of industry experience with a team always ready to go the extra mile to provide outstanding service to every customer. Here at AGI we play an integral role in keeping supply chains flowing. Working closely with procurement and logistics teams across a wide range of diverse sectors, we provide a customised service which is tailored to meet your unique transportation requirements.

Whether you require local, national, European, or international logistics solutions, we have the industry knowledge, complex network, and experience to provide the best service possible. To find out more about our logistics services and how we can help your business, please get in touch. We look forward to hearing from you.