Freight forwarding, in simple terms, is a process in which goods are shipped from one place to another using air, sea, rail, and road routes.
Shipment to international markets involves several tasks. That is why manufacturers and businesses hire freight forwarders to manage their shipments in bulk, with access to the best shipping routes. It helps the business owners, especially small business owners, to focus on their core business functions and lets freight forwarding companies ensure that the goods reach the end-user.
Let us understand the freight forwarding process and the crucial steps involved in freight forwarding. So, without further ado, let us get straight to the topic.
Read till the end to get a clear understating of the whole Freight forwarding process.
Determining your freight quotation involves an understanding of freight class. A freight class is a specific code assigned to a particular freight that dictates the quantity and price of the goods. It helps all the intermediaries determine how difficult or costly it will be to carry/transport the goods forward. It can include a variety of goods under a single price point.
The National Motor Freight Classification (NMFC) defines freight classes based on density, ease of handling, and liability.
According to their density on the official NMFA website, there is a list of freight classes to make it easier to estimate pounds per cubic foot. As the freight density increases, the freight class decreases. It helps manage the handling and shipping cost of each freight.
If you want to learn more about the freight classes, simply Google “list of freight classes article,” and you will get the necessary information.
The National Motor Freight Classification (NMFC), created by National Motor Freight Association (NMFA), is the industry shipment standard that carriers and manufacturers use to plan their shipments. It specifies the items’ number and freight class for various goods. You can use it to determine your freight’s weight and price point.
- Start Transporting Your Merchandize
After determining your freight quote, you can start transporting your goods. Begin with bringing all your merchandise to a processing warehouse. It can be a rented warehouse or a custom crating service offered by the freight forwarding company.
The warehouse’s proximity will determine the time it will take for your merchandise to reach its destination. It does not take more than 30 days, or this signals transport inefficiency.
- Clear Your Merchandise through Customs and Excise
For the merchandise to seamlessly clear through customs and excise procedures, the customs agents will determine your goods as exports and levy relevant taxes according to weight and quantity at this checkpoint. Your cargo will go through the exit point of the manufacturing country, where the customs agents will check and clear it for exports.
Before entering the destination country, the country’s customs agents will also check and clear the items/goods and let them pass if no anomaly was found or any product that the country has banned.
If you are transporting weapons, you need to have a valid license according to the rules and laws of the state. Without it, the agents might confiscate your goods.
In the case of drugs, there is no license. If the drugs are illegal, the agents will not allow those to pass through customs. Therefore, check the permitted list of export items before transporting them.
It is better to contact the importer in that country to whom you are sending the items. Make sure you keep a smooth flow of coordination to avoid any miscommunication. The importer might refuse to accept your shipment if you do not have a binding contract to sell and purchase goods.
Freight forwarders typically handle the customs and excise and pay the necessary taxes according to jurisdiction rules. However, do ensure this beforehand and have the relevant documents on board. If the freight company does not offer services at the customs checkpoint, you may need to contact a customs broker and pay the taxes yourself.
The freight forwarders also check your goods to ensure they are not damaged or broken. Their responsibility is to ensure that your goods reach their destination without damage. They do this so that no damage claims raise against them later on.
- Arrival and Handling Process
Once your cargo arrives at its destination port, the freight forwarder completes any pending documents/procedures and deals with any cargo holdups. They take care of all the carrier bills and transfer goods to a storehouse or depot.
It also includes the import-hauling procedure, where the import documents show proof of the imported items received at the destination country. At this point again, the customs agent checks the goods to ensure nothing illegal is shipped, and only the allowed items are getting into the country.
If your cargo contains any illegal objects or banned items, they will confiscate it. In that case, you may have to call back your items, which will add to your cost.
- Arrange for Inland Transportation
After arriving goods at the port, the freight forwarder arranges for inland transportation to deliver the goods to the intended receiver. If the cargo arrives on the ship, they first transfer all the goods to a warehouse.
Then arrange for trucks to carry the load inside the city. However, you must confirm if the freight forwarder offers this service. If not, you must arrange for inland transportation by yourself so that your cargo does not get stuck at the port.
Before hiring a freight forwarding service, you must understand its process to avoid any cargo holdup issues. You must consider all necessary documentation, import and export information, allowed items, excise taxes, handling, and arranging inland transportation. Identify the freight classification of your goods to determine the cost per freight. Keep all these things in mind before availing freight services for exporting goods.
Hope this article provided essential information to you regarding freight forwarding and its process, and it helps you send your goods without any hassle or problem.