Advantages of Using Freight Forwarders

If an organization ships exports products to different countries, what is the best way to get the product there? Is it better and more cost-productive to use an individual carrier? Or is it better to go through a third-party freight forwarder? Any company that has a global presence, if they do not already do so, should consider using a freight forwarding company. While this company does not actually ship the products to the final destination, "it acts as an intermediary between the client and various transportation services" (wisegeek.com).

When a business uses a freight forwarding company to move their merchandise, they are outsourcing many activities that are required in international shipping. These include customs clearing, insurance and documentation. By outsourcing to a freight forwarder, the company is reducing the amount of logistics involved in international shipping.

Freight forwarders have experience in shipping internationally. United Postal Service is an excellent company. They help find the most cost effective way of shipping the products. Since UPS is also shipping other products along with the products of a specific business, this company will combine shipping costs. Therefore, the company can get a discount when the fright forwarder has additional freight. When the company uses an individual carrier, they will pay considerable more to ship freight.

If a company uses an individual company, the business is responsible if anything happens to the freight. However, the freight forwarding company is responsible to replace lost merchandise.

Freight forwarders have experience in knowing the shipping procedures of numerous carrier services. In addition to knowing which ones use ships and barges to ship freight, they also know which ones use air truck and rail services. Having this information, the freight forwarder knows which company to use.

By knowing where the starting and final destination points are, freight forwarders may use a combination of these services to get the freight to where it needs to go at the cheapest cost possible. For example, the company may find that it costs more to just use air transportation, than it is to use a combination of air, sea and rail transportation. However, it may take longer to use this method. The freight forwarder has this information to pass back to the company. The company decides to either use the faster, but more costly way to ship, or to use the slower, but less expensive way.

Reference:
http://www.wisegeek.com/what-is-freight-forwarding.htm