When manufacturing is outsourced overseas, the products must be moved across international boundaries and over longer distances. The paperwork, clearances and shipping services required to do this can make the process complicated at times. Usually, the best way to handle everything is by using a freight forwarder to help things run smoothly.
Requirements when moving goods between countries
- International shipments of manufactured goods can be broken down into the following steps:
- The manufacturer declares the goods are ready for shipment.
- Customs is contacted to clear the goods for export.
- The cargo is picked up and taken to the port of departure.
- The goods are loaded for shipment and given final customs clearance for export.
- The cargo is shipped to the port of entry in the destination country.
- The cargo is unloaded and cleared through customs (the necessary documentation should be prepared prior to arrival)
- The goods are picked up, shipped and delivered to the buyer
What freight forwarders do
With all the steps and paperwork required in shipment, freight forwarders are sometimes referred to as the travel agents of trade, since they make shipment so much easier. They are basically companies or individuals that arrange transportation between countries through regular shipping channels. Some of their functions include:
Freight forwarders help prepare and review paperwork to include the commercial invoice, shipper’s export declaration and the bill of lading. They can also be utilized to insure proper marking and packaging. For smooth shipment, transshipment and customs clearance, all documentation should be prepared early and ready before the goods reach port, and a freight forwarder will help insure everything is done properly.
If the goods are on the other side of the world, it can be difficult to ship without help. A good freight forwarder will help find the best shipping channels to keep everything moving until the goods reach the final destination. They are particularly useful for smaller orders when the quantity ordered is less than a full container (LCL). A freight forwarder can help lower the costs of shipping this way by combining different shipments to make a full container load (FCL).
Freight forwarders can pay taxes, shipping and other expenses on the buyer’s behalf and will consolidate different payments into a single bill.
Freight forwarders are usually able to supply insurance services to cover potential shipping problems.
The right freight forwarder can provide valuable advice and help avoid costly problems on other issues that might arise.
Things to look for in a freight forwarder
Anyone who is in need of freight forwarding services should look around to find the one that best suits them. Some things that should be looked at include the rates, accreditation, experience, global reach in both the country the goods originate from and where they will be shipped to, office location, if they have a single point of contact and their consolidation services if the goods shipped will be LCL.
The final decision on using a freight forwarder will depend on the level of experience of the importer, and the ability of the importer to negotiate with the shipping companies for better terms. The complexity of the shipment, time factors and the possibility that the freight forwarder may be able to negotiate the best shipping rates all need to be considered. While freight forwarders are often the best way to move goods, they may not be in some situations.