How to choose a freight forwarder

A freight forwarder can make an exporter’s life much easier. So here’s a guide to finding the right freight forwarder to refine your logistics process.

It can be hard to get your head around the logistics of exporting—new and existing exporters alike. Fortunately there are professionals who can take care of these things for you; they’re called freight forwarders.

About freight forwarding
A freight forwarder is a person or organisation that specialises in arranging documentation, terms of carriage and customs clearance for the transport of goods to dispatch to customers. The forwarder acts as an agent on behalf of your business and has the power to negotiate with the carriers on matters such as priority cargo and shipping rates. Freight forwarders aren’t just for exporters; they also work on behalf of importers and on domestic shipments as well.

Freight forwarders work with customs brokers to ensure your shipment makes it out of Australia and safely to its destination. A customs broker is a person or organisation authorised to execute customs clearance procedures for exporters. They may also work with importers, too.

While it’s true that you can probably handle these things within your own company, there are a number of advantages to working with a freight forwarder. “In essence, any company that’s dealing with international freight, a freight forwarder can actually add value to,” says Jo-Ann Murphy, manager of international supply chain at Post Logistics. “A freight forwarder provides the services to facilitate the functions between the different countries and management. The skill set required to do that well is quite unique.”

Unless your business is big enough to have its own logistics division, having someone on staff to manage forwarding is probably not the best use of human resources when specialist freight forwarders can leverage better deals and access certain benefits not available to individual companies. “Larger companies may have enough staff for their own division. Woolworths does, but they’re more anomalies as opposed to the standard,” says Murphy. “If you’re working with a shipping line, for example, they will just give you rack rates unless you’re really large.”

Depending on how you want to transport your cargo, sometimes you won’t have a choice as to whether you need to use a forwarder or not, she notes. “For airfreight you have to be IATA [International Air Transport Association] accredited for all international airlines or else you have to pay full rates. So the airlines will encourage you to operate through freight forwarders. They actively discourage individual interactions.”

Cargo that falls short of a full container load also requires a freight forwarder because a shipping liner won’t take part loads. A freight forwarder can combine your part load with another business’ part load to satisfy the carriage lines.

Add to that the paperwork that comes with export customs compliance processes and you’re better off calling in the professionals. They do cost money, but they can offset their own cost by saving you a packet too. “It’s a direct cost saving and an efficiency cost saving with your staff and your labour and your overhead,” reminds Murphy.