Using a freight forwarding service is a smart way to save money and reduce admin work when shipping goods. Learn all the benefits, as well as what to look out for when selecting a forwarding company in this blog.
Shipping cargo is both time-consuming and complicated. There are containers to source, vessel slots to book, and piles of documents to organize. On top of this, getting the best freight rates without the right industry connections can be a real challenge.
That’s why many shippers choose a freight forwarding service to manage the process for them. A good forwarding company makes sure your goods arrive at their destination on time, in good condition, and for a price that suits you.
If you’re not sure where to find reliable freight forwarding companies to handle your shipments, we’ve got a solution for you.
We’re Container xChange, an online marketplace for buying, selling and leasing shipping containers in over 2,500 locations worldwide. We work with 1,700+ vetted partners, including freight forwarding companies, and so can you.
Curious to find out how you can connect with top freight forwarders in the location you need? Click below to chat with our expert team today, and you’ll be working with trusted names in the industry in no time at all.
What is freight forwarding?
Freight forwarders, or forwarding agents, coordinate imports and exports on behalf of shippers. They work with shipping lines, airlines, rail companies, trucking services, and customs authorities to move goods along the supply chain safely and efficiently.
Forwarding companies handle the following services:
- Documentation and customs clearance
- Carrier selection and slot booking
- Cargo insurance
- Warehousing and distribution
- Risk management
It’s important to note that the shipper can decide how much involvement a freight forwarding company has in the shipping process, as well as which modes of transport are used to move their goods.
From simply organizing trucking to and from ports, to handling the entire process from start to finish, forwarding can be customized to the shipper’s individual needs and budget.
Now, let’s take a look at the different types of forwarding services available to shippers.
Types of freight forwarding services
Freight forwarders can organize shipping via ocean freight, air freight, rail freight, or intermodal transportation. They also work with trucking companies to move container shipments between these modes.
Depending on the destination, a forwarding service can also advise you on the best combination for your budget and delivery deadline.
Let’s learn more about each shipping method below:
Ocean freight forwarding
As the same suggests, ocean freight involves shipping goods in containers via ocean liners. This method is economical if you’ve got large cargo volumes. There are two ways to ship goods via ocean freight:
- What is less than container load? Less than container load (less than container load, LCL) is a shipping term that refers to the delivery of cargo in smaller quantities than a full container load. A f... More or What is less than container load? Less than container load (less than container load, LCL) is a shipping term that refers to the delivery of cargo in smaller quantities than a full container load. A f... More means you share a container with other shippers and only pay for the space you use.
- FCL or Full Container Load means you book an entire container for your cargo and pay a fixed rate. This method works out cheaper per unit than What is less than container load? Less than container load (less than container load, LCL) is a shipping term that refers to the delivery of cargo in smaller quantities than a full container load. A f... More if you’ve got enough cargo to fill an entire container.
Rail freight is the transportation of cargo via rail. It’s ideal for bulk cargo – goods that are transported unpackaged in large quantities. Cargo can also be transported in shipping containers. Rail freight is usually combined with road freight.
Road freight involves the use of trucks or other heavy-duty vehicles and is often used to move containers between rail, ocean and air freight. This type of transport is also used for overland, domestic and cross-border shipping.
This is ideal for smaller cargo volumes, as it’s the most expensive transport mode. Air freight is ideal for time-sensitive shipments, as it’s fast and efficient.
Now, let’s check out the end-to-end freight forwarding process.
How does freight forwarding work?
If you use a freight forwarder to manage the entire shipping process for you, here are the basic steps involved.
Agreement between forwarder and shipper
During the initial stage, the shipper provides the forwarding company with information about the cargo, destination, preferred modes of shipping, and budget.
A quotation is made up, which includes transportation costs, customs fees, insurance and document handling. If the shipper is happy with the quote, the agreement is signed and the process begins.
At the origin handling stage, the forwarder organizes documentation for the shipment.
Documents collected may include:
- Packing lists
- Bill of lading
- Certificate of origin
- Customs compliance forms
Next, an inspection will take place. This checks the quantity and quality of the cargo and ensures the goods match the information provided on the What are shipping documents? In shipping, shipping documents are documents that provide information about the goods being shipped. They may include information such as the origin and destination of th... More. When all is in order, the goods are transported to the shipping port, carrier domain (airfreight), or goods station (rail freight).
Export customs clearance
Export customs clearance is a crucial step in which the forwarder ensures all of the necessary licenses and permits are ready. At this stage, all documentation is submitted on behalf of the shipper, and the forwarder liaises with the customs clearance office to make sure all is in order.
Shipping to destination
Once the cargo has been cleared, it’s shipped to the destination. As part of the service, the forwarding company will negotiate the best rates and slot booking prices (for sea freight), and select the safest and most efficient route for the cargo.
Import customs clearance
The import customs clearance procedure is managed in the same way as the export process, with the forwarder submitting all necessary documents and liaising with the import customs authorities.
Once the goods have been cleared, they’re transported to their final destination, usually in a cargo truck.
Benefits of using a freight forwarding company and its services
Now we know exactly how the freight forwarding process works. Next, let’s check out some important benefits of using a freight forwarder:
Cost-effective and efficient: With a large network of valuable connections, freight forwarders can negotiate the best shipping rates and slot booking prices for your cargo. They’ll also find you the most efficient route, to get your cargo where it needs to go as fast as possible. Because let’s face it, time is money.
Saves you time: One of the most important benefits of using a forwarding service is how much time you’ll save. With documentation, paperwork, customs clearance and insurance sorted for you, you’ll have more time to focus on other aspects of your business.
Helps you to avoid risks: Using a reputable freight forwarder means avoiding many of the risks associated with shipping cargo. They’ll organize comprehensive insurance for your goods, as well as make sure they’re customs-compliant and meet all regulatory requirements. This, in turn, could save you some hefty fines and frustrating hold-ups.
Global hotspots for freight forwarders
Due to their geographical locations, the USA, Europe and China are global shipping hotspots. If you’re moving goods to or from one of these regions, using a freight forwarder can help you navigate high freight costs, port congestion and customs procedures as seamlessly as possible.
The United States: Due to its position and port efficiency, the United States is a major global shipping hub. The Ports of Los Angeles/Long Beach act as an important trade lane between the US and Asia, with many ships entering from the Pacific Rim.
If you’re shipping to this region, you’ll want to use a reputable freight forwarding service to get budget-friendly shipping rates and avoid delays. Check out the top freight forwarders in the USA here.
Northern Europe: In Northern Europe, Rotterdam remains one of the largest and busiest ports in Europe. Due to its centrality, Rotterdam port is a major gateway for cargo entering and leaving the EU. So be sure to make use of a freight forwarder when shipping to or from this region.
China: China is home to some of the world’s largest container hubs, including the Port of Shanghai. This region is a major manufacturing and export hotspot and a strategic location for businesses trying to reach global markets.
Shipping to or from China can be challenging, due to high traffic volumes. Check out our list of top freight forwarders in China to help you manage the process hassle-free.
What to keep in mind when working with freight forwarding companies
Forwarding services offer a host of benefits for your business. However, it’s also important to keep the following in mind before working with one:
- Services offered: Make sure that the company you choose offers all of the services you require. Luckily, on the Container xChange platform you can speak directly to partners to get all of the information you need before signing an agreement. That’s right, no middleman involved!
- Reputation and ratings: When selecting a forwarding company, it’s important to know its track record. On xChange, we make it quick and easy to check out the reviews and ratings for any freight forwarder you’ve decided to work with. Simply type in the company name, and find information on their service offerings, partner ratings, and reviews.
- Licensing and certification: The freight forwarding company you work with should have all the necessary licenses and certificates. Doing background checks can be time-consuming, so we’ve done the admin for you. On xChange, we’ve vetted all 1,700 companies on the platform already, so you don’t have to.
How Container xChange helps you find the right freight forwarding company
If you want to streamline the shipping process, you’ll need an online platform where you can manage everything – including finding the right freight forwarder – in one place. Luckily, Container xChange is your all-in-one logistics solution.
On our platform, you’ll be able to find the reputable freight forwarding companies you need within minutes, and so much more! Check out some of our offerings below:
Get real-time, automated updates on your shipments with the Container Tracking tool. This way, you’ll know the whereabouts of your freight at all times and can preempt delays, plan accordingly, and keep all stakeholders up to date.
100% payment protection
On xChange, all payments are completely safe and secure with the xChange Wallet. Keep track of your transactions in one convenient place, and receive a single invoice each month.
Real-time container price data
With our Insights tool, keep up to date with container prices, leasing rates and the latest industry news, any time, from anywhere. So that you can make smart and informed decisions every time you ship goods.
Ready to connect with top freight forwarding companies on the Container xChange platform? Then it’s time to sign up for your free demo with one of our friendly experts. You’ll get a complete tour of the platform, and a chance to see just how easy it is to find the freight forwarder that suits you. Click below to get started today.
Freight forwarding: Common FAQs
What are the different types of freight forwarding companies?
Freight forwarding companies handle ocean freight, road freight (trucking), intermodal transport and airfreight. The shipper can decide how much involvement the forwarding company has in the process, from simply organizing trucking or customs clearance, to arranging shipping end to end.
Why use a freight forwarder?
Freight forwarders handle all paperwork, admin, insurance and logistics on your behalf. In this way, you can keep shipping costs down, save time and make sure your goods are delivered quickly and efficiently.
What are the benefits of freight forwarding?
Freight forwarders have established relationships with carriers and transport companies, meaning that they can negotiate the best rates and vessel slot prices for your cargo. They also handle all admin and documentation on your behalf, so that you don’t have to.