A freight forwarder is an individual or company that outsources its services to buyers and sellers and offers shipping solutions to businesses that export goods internationally. Being a third-party logistics provider, freight forwarders have a well-built network with shipping companies, transport agencies, and customs departments to organise the shipping process for the exporters seamlessly. Let us delve into the requirements of becoming a freight forwarder.
What is a 3PL service provider?
Various aspects of the supply chain require supervision and a management party that takes the burden of import and export away from shippers. In the trade industry, a 3PL or third-party logistics provider is an individual or company that offers outsourced logistics and supply chain management services to shippers or businesses involved in shipping. These outsourced providers help streamline the supply chain from transportation to distribution processes. The 3PL services cover various functions within the global supply chain and logistics, including transportation, warehousing, inventory management, shipping goods, and collaborating with distributors. 3PL providers are scalable and capable of helping businesses save time and money and improve their operational efficiency. They have access to expertise and resources that companies may not have, so businesses choose to outsource.
What is a freight forwarder?
In the ever-changing dynamics of the shipping business, it is difficult for exporters and importers to keep track of new trends in the shipping industry and have a vast network with different shipping parties. Freight forwarders are 3PL service providers that can be individuals or companies. They act as an intermediary between shippers and logistics and transportation companies. Freight forwarders assist the movement of goods from one point to another to reach the destination. They offer cost-effective solutions by building a solid network with different companies involved in the shipping business. They are experts and specialise in the arrangement of cargo on behalf of exporters, and provide:
- Various services related to the shipping process, including freight shipment bookings.
- Assisting documentation.
- Handling custom clearances.
- Ensuring safe delivery to the consignee.
What are the benefits of a freight forwarder?
- Coordinates transportation– In the cases of intermodal transportation, it becomes challenging for shippers to coordinate with multiple transport agents and find the best deals. Freight forwarders mediate transportation between shippers and carriers and help shippers choose the most suitable and cost-effective transportation method and routes for their cargo.
- Preparing documents– It is hectic for exporters and importers to work on complex documents such as bills of lading, bills of entry, permits, and much more. Freight forwarders help businesses handle the complicated and extensive paperwork associated with international shipping.
- Getting customs clearances– The trade guidelines may differ between importing countries. Therefore, it is necessary to ensure that all shipment documentation is accurate and complies with international regulations. Freight forwarders are aware of guidelines and can handle custom clearances seamlessly.
- Warehousing and distributing goods– Certain freight forwarders take a step ahead by offering temporary storage services for goods until cargo distribution.
Requirements for becoming a freight forwarder
To become a licensed freight forwarder, the following steps are necessary-
- Theoretical knowledge– Relevant degrees or certifications always add to the understanding of individuals or companies who are willing to become licensed freight forwarders. Any related degree in logistics, supply chain management, business, or a similar field can be beneficial in knowing and understanding the complexities of the trade industry.
- Practical knowledge about the industry– Some multiple rules and regulations revolve around trade relations. A deep understanding of customs procedures, shipping methods, and logistics management, or undergoing training in logistics companies is always a plus point.
- Building contacts– Whichever industry you choose, i.e., road, rail, air, ocean, you must establish relationships with shipping companies, carriers, customs brokers, and other industry partners. Connections help you to get the best rates for your clients.
- Getting a licence– By checking your country or state’s specific licensing and registration requirements, freight forwarders may apply for legal licences from concerned authorities. Freight forwarding licences help in building credibility. Freight forwarders dealing with ocean freight may apply to the Federal Maritime Commission, air freight forwarders to the International Air Transport Association (IATA), and road and rail freight forwarders to the Federal Motor Carrier Safety Administration, respectively.
These are a few requirements to which a freight forwarder can excel in expanding their business and establishing credibility in the global shipping business.
LOTUS Containers is a globally established shipping container company that offers shipping solutions such as buying and leasing different types of cargo containers to suit the client’s needs.