5 Essential Questions to Ask Your Freight Forwarder
The import / export business is ripe with opportunity, and there are plenty of newcomers to the trade eager to get their feet wet. However, most focus on the manufacturing and supply side of the equation without giving much thought to logistics.
The quality and experience of your freight forwarder will make or break the entire deal. With that in mind, we’re going to look at five essential questions that you should ask your potential freight forwarder before signing on the dotted line:
1. Do they have experience with your type of cargo?
There are many different types of cargo – everything from garments or machinery to chemicals or even hazardous waste. It’s essential that the freight forwarder you settle on has experience with the type of goods that you’re exporting. Once your cargo ships, it’s out of your control. That’s why you want your freight forwarder to know how to handle your products, and to be able to anticipate any potential problems along the way.
2. How extensive is their network?
This matters – probably more than you imagine. The best handlers are going to be members of trade associations and freight forwarder networks. A robust international network is going to facilitate your cargo getting where it needs to go. The biggest companies will have contacts all over the world. Just remember – all you need to focus on is the country you are shipping to. If you’re preparing freight for export to Australia, it doesn’t matter how many contacts a particular forwarder has in, say, China. This may sound painfully obvious, but far too many inexperienced exporters don’t stress the importance of networking.
3. How many containers do they move in an average year?
Experience matters, and asking them how much work they do in a given year cuts to the quick of this issue. Big business and many years of experience means that your forwarder will have seen it all. A variety of unusual situations can occur while your cargo is at sea, so you want to entrust it to a company that knows when and how to react.
To be honest, it’s easy to start a freight forwarding company. What’s difficult is actually running one. If they have years of high-volume experience, they are probably going to be able help you with all of the following:
- Dockworker strikes
- Avoiding (or smoothing out) customs
- Issues with routing
- Port shutdowns
4. Where do their services end?
Some freight forwarders only see to the air or sea portion of your cargo’s journey. You might save a bit of money on their services in this case, but you’ll quickly make up for that in extra charges and headaches when you have to arrange onward shipping once the shipments reaches the destination country. Don’t be afraid to ask if they can arrange the final leg of your cargo’s journey – be it by road or rail.
5. Are they financially strong?
Exporters who are just getting started in the business are prone to overlooking the importance of financials. They assume, understandably, that they themselves will be paying the bills, so it doesn’t really matter. Suppose, for whatever reason, that the forwarder can’t pay the ocean carrier to release your cargo. Delays ensue, charges pile up and everyone loses in the process. If they are financially strong, they’ll be able to act in real time and send you the bill after the fact.
Those five questions will give you a good idea of how reliable a given freight forwarder is. If you’ve taken them all into consideration, you’ll feel much more confident about your choice.
What questions would you ask a freight forwarder before appointing them to handle your shipments..??
Jason Webber is a freelance writer for Felton Global Logistics, one of the leading providers of freight, warehousing, and distribution services. They have more than 40 years of experience in the industry.
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I totally agree with the above questions for identifying the right freight forwarder. I always prefer to choose reputed, experienced people so that any potential problems can be avoided during forwarding.
I couldn’t agree more about the specialisms of some freight forwarders. For example, we specialize in car shipping and have decades of experience in this department. Many freight forwarders would still agree to ship a car overseas but without some specialist knowledge I’d be quite concerned about the odds of your pride and joy reaching its destination in one piece.
All the 5 points sugessted by you are much appropriate for the smooth operations.
Article No. 1 applies on special cargo only not on General cargo. Forwarders deal with different kinds of commodity every year which make them able to handle any general cargo. however Special cargo needs specilaized forwarder.
All the five questions raised in the article are very relevant for selecting the right forwarder for shipment. Experience, honesty, capability to perform assigned responsibility, business reputation, good informal relationship with shipping lines/agencies- all these qualification are to be checked thoroughly before appointing a freight forwarder to arrange export of any consignment. Thanks.
While I agree with all the points, this sounds more like a check list for a logistics manager who doesn’t have any authority to make decision in his company. However more than this its important to know if the person who is going to handle your shipments has enough experience to handle the shipments.
I started off in 2006 after working for the biggest listed logistics company in India. Frankly we only had point no.1. Rest is all built over a period of time. Now we are 200+ team with a healthy growth rate.
If any startup ( Forwarder ) reading this article, they need not get discouraged as I face remaining 4 questions even today. That can’t stop us from taking on Bigger MNC Forwarders who have rest 4 points but not point no.1.
Unfortunately most of the shippers are looking mainly for point No.5 , that is
1) Will you pick up my shipment lower than the cost ?
2) Don’t ask me to pay you even if I breach agreed terms of payment. Else there’s a guy outside my door with deeper pockets.
This is one of the big five questions I used to ask when I was working at as a shipping controller.
Another question that I normally ask is about their clearing charges/rates as they do not normally mark up the landside charges.
Most of the freight forwarders bill almost the same charges, well that is what I have noticed but the difference is mostly on their agency fee which is charged based on total disbursements and/or certain percentage.
The service is also very important as well however good service from the freight forwarders sometimes comes with a price.
i have problem in pricing ,when i want for offer from lines , the same offer will be sent to client so i loss business coz i cant make profit