What is Freight Forwarding?: Everything You Need to Know

Ulhas Sukhare Ulhas Sukhare · Updated January 16, 2024

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Most businesses that ship overseas need someone with import and export knowhow. It’s a complex world that attracts bright freight forwarders with first-hand experience of the regulations involved. It’s also a world of huge sums of money and major cargo that needs a responsible eye on the rules and regulations.

That’s why experienced shippers have a big advantage. They are already familiar with these kinds of concerns. With a good eye for detail and a cool attitude towards directing major shipments, freight forwarding is one of the most rewarding careers for knowledgeable freight forwarders.

Maybe you’ve never heard of freight forwarding service before! Is it another name for what shipping companies do? Is it distribution management? Does it relate to import and export regulation?

In a sense, all those guesses are right – in part. A freight forwarder is involved in all aspects of the above, and takes on their responsibilities. The key definition is: a broker for business-to-business shipping.

Some people are put off by what they perceive as the harsh bureaucracy of the business. But they don’t account for how vital a freight forwarder is.

Any job as in-demand as freight forwarding is worth filling out a few forms for, or providing a few surety bonds: the rewards certainly match the responsibility, and then some.

If you’re new to the enterprise, we’ve got you covered too. First of all let’s get to grips with what a freight forwarder is.

What is freight forwarding?

The US Census Bureau has some helpful guidance on this topic.

In essence, a freight forwarder is someone who acts on behalf of importers and exporters to facilitate the safe and cost-effective ferrying of goods, usually across borders.

It’s a role that suits an IT-literate shipper who knows a thing or two about the costs and processes involved in transportation. But it’s suitable for graduates and less experienced folks too, who are prepared to put in the legwork to get to grips with import/export regulations. Social skills are also a plus, since liaising between shipping companies is a key aspect of the role.

Note: Becoming a freight forwarder does not hinge on being a transporter or having experience in that role. Excelling in the role means relieving the weight of research off the clients. How much does it cost to import from Japan? What insurance is needed to export to Europe? These are the questions that a freight forwarder is paid to solve. 

What is the process of freight forwarding?

Simply put, the process of freight forwarding is arranging transportation handovers between different businesses, mainly in relation to import and export. You are the go-to person for solutions and answers to do with shipping freights from overseas or between states.

A freight forwarder acts as an intermediary between a freight forwarding service and other transportation services like ocean cargo shipping or shipping by air or rail. It is a freight forwarder’s responsibility to negotiate the best deal and the most economical route between destinations. The task is to understand the logistics of international transport and free the transporters of the burden of knowing all the cross-border regulations for themselves.

In basic terms, the process is:

  1. Gain information from the importer/exporter: how much freight, what kind of freight (which may impact on potential customs charges) destination, origin and timeframe.
  2. Research and propose the best shipping service for the importer/exporters needs (ie time, budget, etc).
  3. Broker an agreement between them as an intermediary.
  4. Stay in touch with both businesses to ensure no mishaps occur that will affect time, cost or legality. If they do occur, help arrange a solution and keep either business in the loop.

If you have a mind for logistics, and can guarantee an organisational, problem-solving attitude to all queries related to import and export, then freight forwarding is the ideal career for you.

If you don’t want to become a freight forwarder, but want to know how to use one, the following information is for you.

Why use a freight forwarder?

Okay, a freight forwarder isn’t necessary for every import and export. But the daunting volume of bureaucracy that comes with import/export can put anyone off doin it themselves, even huge companies. Customs law is a gauntlet, and those who can navigate the different regulations are handsomely remunerated. Freight forwarding is a skill based upon knowledge, or at least being proactive enough to acquire it.

Documentation and customs law are the two main fields that freight forwarders are paid to untangle. A freight forwarder is an asset to almost any company dealing in international transportation of cargo, and is especially helpful when in-house resources are not versed in international shipping procedures.

What qualifies as freight shipping?

Freight forwarding is the movement of shipments larger than 30 inches by 30 inches by 30 inches, or that weigh over 150 pounds. (Shipments under these dimensions would typically be more cost-effective to ship via parcel.)

Freight forwarding: Why it works?

For any firm, the weight of the cargo matters to shipping costs. A freight forwarder will take care of cargo from “dock to door”. This includes:

  • the correct filing of export documentation
  • arrangements with carriers
  • packing, crating and storage needs.

Small and medium-sized exporters lack the acumen to deal with import permits and other documentation, so they regularly rely on freight forwarders to manage it for them. Freight forwarders have access to shipping discounts, which is a big plus to potential importers or exporters. For them, freight forwarding is a wise investment.

How do I get there?

The logistics of becoming a freight forwarder can be intimidating – especially to your wallet.

If shipping is more your interest, and the costs of becoming a freight forwarder are out of your price range right now, you can start funding this career move by transporting goods first. There are profitable options open to you that naturally lead to the role of freight forwarding, plus you learn the necessary regulations through experience. So don’t waste time second-guessing a dream. Get involved with CitizenShipper and earn what you need to reach it.

Featured image Credit: www.qafila.com