When importing goods from China or another country, the importer often has to use a forwarder’s services. A freight forwarder, or a freight forwarding agent, is mainly involved in organizing goods’ transport. In the article below, we describe what forwarding companies can do for you, when it is worth using their services, and how to find a forwarder that suits your needs.
A forwarding agent is a part of the TSL industry – Transport, Forwarding, Logistics. Transport is the transport of people or cargo; freight forwarding is the organization of safe and effective transportation, and logistics includes planning and managing supply chains. Freight forwarding companies can offer a wide range of TSL services and have their fleet, customs agency, etc. Nonetheless, the forwarding agent may only organize and outsource specific tasks to other companies.
What services does a forwarding agent provide?
Freight forwarders offer services for both companies and individuals. They act as intermediaries between the producer or supplier and the recipient of the goods.
The services provided by freight forwarders include:
- Planning and organization of the necessary means of transport so that the goods reach the destination in the shortest possible time
- Handling of goods that require special storage conditions, e.g., low temperature
- Packing the goods
- Storage of goods
- Completing the necessary documents
- Contracting of insurance
- Carrying out customs clearance
- Product tracking
Note that some freight forwarders will not transport products such as dangerous goods, perishable goods, medicines, alcohol, or batteries. It may be due to the forwarder’s inexperience with such products or the carrier’s decision.
How does the forwarding process look like?
The freight forwarding process can be divided into the following stages:
- Transportation from the production site to the warehouse.
- Export clearance.
- Inspection of goods based on the documentation.
- Shipment to the country of import.
- Import clearance.
- Storing the goods in the warehouse.
- Transport of goods to a designated place.
The first and last stages do not need to be the responsibility of the forwarding agent. Export clearance may also (depending on the Incoterms rule) be the seller’s responsibility, not the freight forwarder.
Incoterms 2020 is a set of International Trade Rules in force from 2020. Incoterms regulate the allocation of costs and responsibilities between the seller and the buyer. The selected rule defines, among others, when the seller’s forwarding agent operates and when the importer’s freight agent handles matters.
To learn more about the Incoterms 2020, get our free Incoterms 2020 PDF now.
The top freight forwarding agents in the world
The top freight forwarding agencies in the TSL industry:
- Kuehne + Nagel is a company that operates in 109 countries, founded in 1890 in Germany.
- DSV is a Danish company, operating in around 80 countries. In 2019, it joined forces with the Swiss Panalpina.
- DHL Supply Chain & Global Forwarding is one of the most recognizable forwarding agents in the world. It was established in 1969 in California. It specializes in international shipping and courier services.
- Expeditors is an American company based in Seattle, Washington. Expeditors provide services all over the world.
- DB Schenker is a German company, operating in about 140 countries.
- Sinotrans is one of the largest logistics companies in China.
- Nippon Express is a Japanese logistics company, operating in approximately 40 countries.
- UPS (United Parcel Service) is an international American company providing parcel delivery services and supply chain management.
- Bolloré Logistics was formerly known as SDV. The company operates in 109 countries and specializes in the African market.
- CEVA Logistics was established as a result of the merger of TNT Logistics and EGL Eagle Global Logistics. CEVA Logistics operates in 160 countries and is a part of the CMA CMG group.
- Hellmann Worldwide Logistics is a German logistics company, operating all over the world.
- GEODIS is part of the French rail company SNFC in charge of international freight forwarding.
- Kerry Logistics Network is a Hong Kong based company. It has 47,000 employees in 55 countries and a fleet of over 10,000 vehicles.
- C.H. Robinson Worldwide is an American company that provides transportation and 3PL services (third-party logistics). C.H. Robinson Worldwide was established in 1905, now it operates in 39 countries on five continents.
- Fr. Meyer’s Sohn is an international freight forwarding company, one of the largest in the world when it comes to ocean freight.
Many forwarding agents are based or have branches in Europe.
When do you need to hire a freight forwarder?
If you operate within one customs territory, for example of the European Community, transporting goods is relatively easy, and you can arrange it by yourself. Nevertheless, hiring a forwarding agent can make the whole process much more manageable. Some companies do not provide international trade services and specialize in services in a given country or within one customs territory. For the most part, these forwarding companies offer only road freight transport.
Importing goods from outside the EU is a slightly more complicated process. There is usually a need for moving cargo by two or more modes of transport (so-called multimodal transport). The customs clearance is also more complex; thus, it is better to use a forwarding agent’s services.
In some situations, e.g., during sea freight or when the importer cannot clear the goods in the country of export, hiring a forwarder is even necessary.
Freight forwarding agent – Where to find a forwarder?
If you want to compare freight rates quickly, it is worth using ShipHub.co. All you need to do is fill out a short form and wait for your requested shipment quote. This way, you can avoid the problem of searching for companies on the Internet and sending dozens of e-mails. After submitting an inquiry, reliable freight forwarders send their offers so you can choose the most suitable for you. On the platform, you can also send questions to the shippers. Requests can be made for sea or rail, LCL, or container (FCL) transport on routes worldwide.