Freight Forwarding free essay sample

Blueprinting of Freight Forwarding Talk to executive Get personalized solution Access to new markets The only complete logistics and international trade services provider Customs clearance Global shipping freight forwarding Warehousing distribution Classification duty calculation Delivery of goods The business of forwarding freight is certainly picking up, as complete globalization is not only a prediction of things to come but already a reality that continues to expand. Forwarding freight largely involves international shipping, by way of truck, train, water vessel or airplane. All documentation must be accounted for as any international transaction is subject to governmental supervision and various legalities. Some of these documents (whether paper based or digitally stored) include invoices, shipper’s export declaration, bills of lading and other documents accounting for carriers that are importing or exporting products. Keep in mind that if you work in the United States in the business of forwarding freight then you must be licensed according to each respective authority. For example, an Ocean Transportation Intermediary requires licensing by the Federal Maritime Commission. Similarly, forwarders that work by air will require licensing as a cargo agent for the International Air Transport Association. A freight forwarder is a third party provider that plans the logistics, schedule, details and implementation of shipments from one location to the next. Logistics is the ability to smoothly and effectively organize the complex process of planning the flow, storage and delivery of goods and services from the point of origin to the final destination. A freight forwarder sends goods or services through some form of carrier such as a ship, airplane, truck, train or other vessel. Function 1. International freight forwarders move cargo to overseas destinations for exporters. They help to take care of the complex documentation required to import and export goods. The freight forwarding industry is becoming highly competitive, meaning companies are finding ways to streamline their services to attract and maintain the business of exporters. Features 2. Freight forwarders must know the rules and regulations of countries or other locations where they ship goods. They must have knowledge about the prices, charges, fees and other expenses related to each forwarding process. Some of the documents they handle include commercial invoices, export declarations and the bill of lading. Time Frame 3. In a freight forwarding transaction a sender will contact a freight forwarder to make sure that the designated shipping dates are reasonable. This is to be sure that the goods will arrive at the correct shipping port, airport, or other designated location according to the dates on the shipping contract. Identification 4. Depending on the country where the business is licensed, freight forwarders will be members of either a designated international association or licensed by appropriate communities or intermediary agencies. Significance 5. Other duties of an freight forwarder include arranging for the packaging of goods or putting them in containers. Some actually pack merchandise to avoid against damage during transport. They also reserve space on the appropriate shipping vessels, and review and prepare freight documents such as the letter of credit. In international forwarding, they work with overseas customs brokers to assure that the forwarded goods meet the standards and regulations of the destination to which they are being sent. At the destination, freight forwarders make sure that the goods are delivered to the destination chosen by the sender. Freight forwarding is a service used by companies that deal in international or multi-national import and export. While the freight forwarder doesnt actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden. Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability. A freight forwarding service generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarders bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination. What is Freight Forwarding? What do forwarders do? Freight forwarding is all about the smooth flow of international trade. The freight forwarder is the party who ensures that internationally traded goods move from point of origin to point of destination to arrive: * At the right place, * At the right time, In good order and condition, * At the most economic cost. To accomplish this, expertise is required in a number of different areas: * Logistics Close co-operation is required with transporters in every mode – road, rail, sea and air. Freight forwarders are constantly negotiating freight rates with transport providers, comparing the costs of moving cargo along different routes via different modes and then designing logistics infrastructures which provide the best c ompromise between cost, speed and reliability. Those involved in this aspect derive continuous interest and motivation from the fact that no two operations are the same, given the diversity of the nature of cargoes that are traded and the increasing numbers of doors being opened through the globalisation of world trade. Once a forwarder’s recommendations with regard to cargo routing have been accepted it becomes the responsibility of the forwarder to ensure that the goods concerned are transported and delivered as planned. The process of designing and executing these logistics plans has earned for the forwarder the title Architect of Transport. Statutory compliance A vital ingredient to successful trading on world markets is that every transaction must comply with a myriad of statutory measures and their related procedures, especially those associated with Customs. It is in this area that the specialised skills and knowledge of the freight forwarder come to the fore. Without these, international traders would become hamper ed through being distracted from their core activities-meeting the material needs of world business. * Risk Management To every international trade transaction there is an element of risk and the increased complexity of international trading as compared to local buying and selling requires that these risks are managed with tools which are correspondingly more sophisticated. International traders require that their forwarders be in position to advise and assist them in minimising those risks which are particularly associated with the movement of goods – loss, damage and destruction, although the exposure of forwarders to the international environment in its entirety makes their counsel as regards matters like credit and currency risks very much sought after. Finance and Payment Forwarders are entrusted with goods which are very often dispatched under conditions where buyer and seller are not known to one another. Under these circumstances the forwarder must scrupulously ensure that all requirements of the door to door operation are complied with to the letter, especially as far as the accurate and timely production of documentation is concerned – excellence in this filed leads to prompt settlement for goods purchased and atisfied traders. An especially gratifying aspect of freight forwarding is the facilitation, through consultancy and networking, of the entry of new exporters and importers into the international market. More often than not this involves advice as to the alternative methods of financing of the transactions concerned and the establishment of payment methods that are mutually beneficial to both parties. * Cross functional integration Business in the 21st century will be characterized by an important feature- the way in which suppliers, manufacturers and consumers are being drawn closer and closer together so that, for example, a six pack of Heineken beer purchased in a store in downtown Wichita, Kansas will provide instant input to the Heineken brewery in Holland for the next production to run, the next raw materials purchase order and the next sales forecast. The forwarder is ideally placed to act as the catalyst to maximize the benefit from advances in information technology which are revolutionizing these processes. Furthermore the role of the forwarder will be key because, in adopting cross functional integration strategies, companies are increasingly outsourcing their non core activities. The ability to ensure the efficient and effective door to door movement of goods from country to country from the time an order is placed until finished goods are delivered to the final consumer places the freight forwarder in a position to make a unique contribution to the enhancement of value to the activities of exporters and importers.