The best freight forwarders have these 3 qualities
Shipping a product from a factory to a fulfillment or distribution center is often one of the last to-do’s business owners have when sourcing their products. Entrepreneurs are often so focused on making sure everything is in place to sell the product, that the supply chain setup can be overlooked.
Overseas transportation from factory to fulfillment center can be costly — especially when shipping with parcel delivery companies. In reality, these parcel services are only price-competitive up to about 150 kgs (in chargeable weight). For anything bigger, it’s more cost-effective to work with a freight forwarder.
Many business owners will understandably gravitate towards the forwarder who offers the lowest initial price. However, these Amazon sellers and entrepreneurs find out the hard way with hidden charges and uncertainty around the location of their goods. This ends up costing more time, energy, and money than if they had chosen a service-based freight forwarder who offers honest, up-front pricing and real-time shipment visibility.
In addition to price, entrepreneurs should consider the following three attributes when selecting a freight forwarder:
E-commerce is a chaotic business environment, prone to last-minute changes ranging from adjusting carton dimensions to the forecasted velocity at which in-stock products sell.
A forwarder who communicates clearly and effectively will save businesses money. A prime example is to make sure the same company partners with you across multiple time zones. When selecting a freight forwarder, ask them about their physical presence and/or capabilities in both the country of origin and destination.
Communication doesn’t have a tangible price tag, but it delivers an incredible value (and peace of mind) while you focus on growing your business.
Prior to confirming an upcoming shipment, pay attention to how your forwarder communicates with you. This will tell you a lot about their level of customer service and might reveal communication challenges.
The first time you receive a quote from your freight forwarder can be confusing. And this is where “transparency” becomes an invaluable aspect of the process. To have control of your shipment, your forwarder needs to be able to clearly explain what you’re being charged for, and to what extent you can include or exclude features you don’t judge necessary.
Before booking your next shipment, make sure you understand customs duties and Incoterms. This way, you’ll have a clearer understanding of what’s included in your shipment and how to avoid unexpected charges along the way.
At origin, factories often partner with freight forwarders who work through an agent model. These shipping agents do not have a global presence and there is often a lack of visibility. It can, however, add value to know exactly what’s going on with your shipments and plan around the arrival of your cargo across different time zones.
With so many advances in technology, one might wonder why many freight forwarders still manage shipments through outdated methods. When shipping goods around the globe, exceptions are bound to occur. Nonetheless, you should be informed as they happen — giving you the valuable opportunity to react.
Ask your forwarder how they handle pricing, billing, and shipment tracking to be sure they’re providing the level of transparency you need.
Familiarity With Your Type of Business
Online shopping is clearly the future of retail. Surprisingly, many logistics companies haven’t embraced this change. Partnering with a freight forwarder that is familiar with e-commerce is essential as you aim to quickly grow your business.
Let’s take for example Fulfillment by Amazon (FBA)’s strict guidelines around deliveries and packaging. As a seller, your hands are tied following their strict rules and regulations. Freight forwarders who understand this side of the business will easily navigate you through Amazon’s unique fulfillment requirements.
The best piece of advice we can give you: ask your freight forwarder how they approach optimizing your door-to-door Amazon FBA costs opposed to just port-to-port. Tremendous cost savings can be achieved using the right partner for the last-mile delivery, which can’t be quoted up front.
Final Thoughts on Choosing a Freight Forwarder
Don’t just go with the cheapest option offered. With so many hidden costs and your responsibilities as an importer, forwarders who offer a premium service, in combination with a competitive rate, could end up saving you hundreds (or even thousands) of dollars on the backend.
Make sure the provider you choose offers transparent quoting, a clear and collaborative communication tool, and readily available updates on the status of your shipment.
Additionally, don’t underestimate the value of in-house customs brokerage services that can drastically reduce transit times. Furthermore, keep in mind that you can’t freely pick and choose your tariff codes, which are regulated by government entities. If someone tells you that they can get you a better code for cheaper duties, they may be cutting corners and putting your business at a compliance risk.
This piece is the first in a series of articles written by Flexport in collaboration with The Selling Guys. Flexport is a technology-driven freight forwarder whose teams specialize in compliantly shipping goods around the globe for e-commerce and startup-based companies. If you want to learn more about what Flexports specialists partner teams can offer you please click here.