An Introduction to the Freight Forwarding Industry
The Freight Forwarding Industry – An Introduction
Very simply, freight forwarding is the process of shipping goods from one place to another. A freight forwarder is a company that can help arrange this transport of goods between your desired locations.
This can be from door to door, or any points in between (commonly called the supply chain).
Freight forwarding companies can provide both international and domestic freight services. In the case of SPLS, we provide international freight forwarding services only, unless it is domestic transport as part of an international shipment.
A Short History of Freight Forwarding
Freight forwarding had its origins in Europe, with the movement of cargo predominantly by road freight between countries. International freight forwarding companies have been around since cargo was first carried by ships and aircraft. This only really started to become an industry in Europe in the 1970s, and the rest of the world, including Australia, in the 1980s.
As the world has become closer and tighter in terms of communications and general growth, so has the freight forwarding industry developed. Today, there are a number of global freight forwarders who have offices and staff all over the place, or you can deal with small niche type companies (like us) who can provide you with more focused and personalised services.
We believe that the personal touch and relationship of a smaller company is always a great way to go, however, it is a matter of individual preference.
Dealing With Freight Forwarding Companies
Doing business with a freight forwarding company (also known as a freight forwarding agent) is simply like doing business with any other customer or supplier.
By understanding options, processes and potential pitfalls, the freight forwarder can save you an awful lot of time, headaches and cost. Of course, you can try to arrange this yourself, but you would have to navigate your way around customs, quarantine, trucking, terminal, air or shipping lines, documentary requirements and more. There are these and any number of other complexities that are part of what you pay a freight forwarder to arrange and deal with.
As international business has grown, so has the complexity of the services provided by the freight forwarding industry. And, now, many freight forwarders use the word “logistics” to cover the entire gamut of freight forwarding services. Particularly since every international transaction requires more than one mode of transport.
A typical transaction could be road/air or sea/road. There may be transportation requirements at either end, other than the primary Sea or Air shipping.
Further to that, there are Customs requirements at both ends, terminal or depots both ends, quarantine and documentary issues, and foreign currency transactions. All these are an addition to actually negotiating and arranging the freight itself.
Basically, you need to define your freight requirements, and then find a company who can give you the service that you want.
International Shipping – Items to Consider
It is most important that the freight forwarder you choose is familiar with services and processes at both ends of the supply chain. This way they can appropriately discuss rates and transport options. We have over 30 years experience in the industry and have built connections around the world in order to provide you with a wide range of options for your shipping.
It stands to reason, that the services you require will be commensurate with your customer or supplier requirements. Different costs will relate to different modes of transport.
In Australia, all international freight services will, of course, include some form of air or sea freight.
International courier services are ideal for smaller packages and almost always provide a complete door to door service.
Airfreight is mostly used for urgent cargo where cost becomes a secondary consideration to the overall transaction. Freight forwarders can offer a direct airline service on most days and airlines. Alternatively. they can often offer an airfreight consolidation service on certain routes and days that can be cheaper than a direct airline service.
Sea freight will invariably take longer. There are often direct port to port services, eg Sydney to Singapore. Some origins and destinations are only serviced on a trans-shipment basis. This is where there is no direct service and a shipment will need to be dropped at an intermediary port. This will add to the overall shipment times. In some cases, there is a choice between direct or transshipment services.
The range of shipping options all have different costing structures. You need to discuss these time and cost options with your freight forwarder.
Where to from here?
Bigger ships. Faster Aeroplanes. As technology and infrastructure develops, so will the international freight forwarding service. And, as does this, so will the efficiencies and cost benefits to importers and exporters.
Speak with us for a personalised service arranging your shipping requirements.