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Home » General » An introduction to the Freight Forwarding industry

An introduction to the Freight Forwarding industry

Very simply, a freight forwarder can arrange the transport of freight from one point to another.
This can be from door to door, or any points in between ( commonly called the supply chain).

Freight forwarding can apply to both international and domestic freight.

Freight forwarding had its origins in Europe, with the movement of cargo predominantly by road freight between countries. International freight forwarding has been around since cargo was first carried by ships and aircraft, but this only really started to become an industry in Europe in the 70s, and the rest of the world, including Australia, in the 80s.
As the world has become closer and tighter in terms of communications and general growth, so has the freight forwarding industry developed. Today, you can deal with a number of global freight forwarders who have offices and staff all over the place, or you can deal with small niche type companies who theortically can provide you with a more focuused and personalised service.
There is no right or wrong with this. Some companies want to align themselves with these large forwarding companies for many reasons including the wider variety of in house services, whilst others may like the closer, personal relationship of a smaller company.

It really is a matter of personal and company preference.

Doing business with a freight forwarding company is simply like doing business with any other customer or supplier. It is all a matter of need and cost benefits. 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 any number of other complexities that are just part of what you pay a freight forwarder to do.

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 gammut of freight forwarding services. Particularly since every international transaction requires more than one mode of transport.

A typical transaction would be road/air or sea/road, and amongst that there are Customs requirements both ends, terminal or depots both ends, quarantine and documentary issues, foreign currency transactions; not to mention negotiating and arranging the actual freight.

Basically, you need to define your freight requirements, and then find a company who can give you the service that you want.

It is most important that the freight forwarder you choose is familiar with services and processes at both ends of the supply chain, and can discuss rates and transport sea freight

It stands to reason, that the services you require will be commensurate with your customer or supplier requirements, and different costs will relate to different modes of transport.

Since we are here in Australia, all international freight services will 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, or they can often offer an airfreight consolidation service on certain routes and days that is usually quite a bit cheaper than a direct airline service.

Seafreight 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 transhipment basis, where there is no direct service, and in some cases, there is a choice between direct or transhipment services.

The options all have different costing structures, and 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.