Freight forwarders are a cornerstone in the export shipping process. And with more than 40,000 forwarding and logistics firms employing around 8 to 10 million people in 150 countries around the globe, finding the best freight forwarders may seem like finding a needle in a haystack.
Where do you begin?
Well, you should start by researching and investigating your options. This article will help by explaining what to look for when choosing a freight forwarder. You should also network with other exporters and learn who they trust with their goods.
Based on conversations with forwarders, representatives from the Minnesota District Export Council (DEC), and the U.S. Commercial Service, I’ve put together this list of four qualifications the best freight forwarders share. I’ve also included several questions to ask freight forwarders when you interview them. Their answers will help you understand if they are a qualified partner for you.
1. Experience and Credentials
Check with prospective forwarders to see if they are licensed with the FMC (for ocean freight forwarders) and IATA and TSA (for air freight forwarders). The best freight forwarders will be able to tell you about their company history, their freight forwarder network and partnerships, and their licensing. They should also be able to share testimonials from exporters who trust them.
Questions to Ask
- How many years has your company been in business?
- How many people are on your staff? How many years have they been working with your company?
- What is your freight forwarder network like? What global partnerships do you have?
- How much experience do you have with types of payment, including letters of credit?
- Are you a non-vessel operating common carrier (NVOCC)? Do you have the appropriate licenses to be an NVOCC?
2. Services That Match Your Needs
The best freight forwarders know your industry and have a willingness to help you export goods. They should be your partners in every sense of the word, handling your export business efficiently and accurately.
Questions to Ask
- Is your company a full-service freight forwarder?
- Do you specialize in certain commodities and shipping methods?
- Do you understand my industry?
- Do you have warehouse facilities in the U.S. and in other countries as well?
3. An Understandable and Reliable Fee and Pricing Structure
The best freight forwarders will not only help you understand their pricing structure, they will also strategize with you on how to decrease your international shipping costs.
Questions to Ask
- What types of insurance do you offer, and what are the prices?
- How do you determine price—flat rate, volume discount?
- Do I have to make a certain commitment to get a certain price?
- Do your rates fluctuate seasonally?
- Do your rates include incidental charges like faxing?
- How much do you charge for document preparation/AES filing?
4. A Track Record of Compliance
This is the key component when looking for a freight forwarder. But while a compliance-focused partner is good, you need to understand your own role first.
Consider this: You are the manager, the boss and the person who is liable.
Your freight forwarder is your representative, but they are not you. You know your business best. The documents you provide them must be accurate. Their role is to arrange and manage the transportation of goods—not to serve as your company's compliance officers.
Ultimately, compliance is your responsibility.
Take control of export compliance by choosing your freight forwarder wisely and maintaining control of and responsibility for your exports. Remember, you can’t outsource liability.
Questions to Ask
- How do I need to provide export information to you?
- How will we work together to be in compliance with export regulations?
- Do you have experience in my product, shipment method and destination country?
- How is your staff trained?
- What do you, as the forwarder, expect of me?
- What are the expectations around communication, and how will you meet that expectation?
Learn more about freight forwarder compliance in our article If You’re Relying on Your Freight Forwarder for Export Compliance, You’ve Probably Already Violated the Law.
Freight Forwarder and Exporter: A Partnership
The best freight forwarders are partners in your exporting transactions. They don’t—and shouldn’t—do it all. By working closely with your freight forwarder you can minimize entry errors, enhance compliance and ultimately deliver your goods faster and get paid on time.
We have a couple more blog articles you can check out on the topic:
- How to Choose the Right Customs Broker and Freight Forwarder
- 4 Steps for Ensuring a Good Relationship with Your Freight Forwarder
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