What Is an International Freight Forwarder? | A Complete Guide

When expanding to new markets, find out how international freight forwarders can help your business. Here are some important factors that you should consider when choosing a partner for the task.

By:
Rob Tillman
eCommerce Strategy
Freight
international trade - Rakuten Super Logistics
international freight forwarder - Rakuten Super Logistics

Businesses considering expansion often look at international markets for new avenues of growth. When physical products are involved, the ease with which goods will be transported is an essential criterion to evaluate before finalizing your business plan. But trying to work out shipping options to improve supply chain solutions can be an overwhelming, labor-intensive, and time-consuming experience. 

International shipping is a complicated process that requires coordination with several different entities and compliance with multiple legalities and regulations. The process can be both documentation and process-heavy. Partnering with an international freight forwarder to shoulder the full responsibility of transporting your goods overseas can be an option worth considering.

International freight forwarding companies work in the highest field of expertise with an established network of transportation partners that they leverage to get the most cost-effective, fast, and reliable routes to transport your goods. Plus, many international freight forwarders can integrate with your business website to create a seamless, end-to-end experience for both the business and the customer. 

In this guide, we will cover:

  • What an international Freight Forwarder Does
  • The Different Types of International Freight Forwarders
  • Why Businesses Should Make Use of International Freight Forwarding Services
  • How the Freight Forwarding Process Works
  • How To Get the Best Rates From International Freight Forwarders
  • How a Company Can Set Up International Freight Forwarding

What Is International Freight Forwarding?

An intercontinental freight forwarder is a person or business that helps companies transport their goods or products to their final destination, which is usually the end consumer. 

Unlike national freight forwarders that manage the transportation of goods within a country, global freight forwarders handle international transportation worldwide. For this reason, they are also known as global or overseas freight forwarding companies. Businesses like FedEx and DHL are examples of some well-known global freight forwarding companies.

Global freight forwarders do not manage the transportation of goods themselves. They build relationships with the transportation service providers who make the movement and delivery of goods possible. In this manner, they function as an intermediary between the business and the transportation network. 

Different Types of International Freight Forwarders

Grouped by mode of transportation, there are typically four different types of global freight forwarders:

  • Air Freight (also known as “Air Cargo”)
  • The shipment of goods using commercial or charter air carriers can be a great option when speed is an essential factor. Transportation by air can also provide a high level of security given the number of controls placed over cargo at most airports.
  • Ocean Freight
  • Ocean freight means shipping goods by sea. Ocean freight can be significantly cheaper than air freight. Unfortunately, it can take far longer than air freight for products to reach customers. Shipping by sea is a cost-effective option as there is a comparable increase in capacity considering the payouts.
  • Rail Freight
  • Rail freight is similarly cost-effective, with the added appeal of being eco-friendly. Trains produce lower CO2 emissions than other forms of transport. They're also seen as safe, fast, and efficient. GPS tracking makes it possible to identify where shipments are at any given stage, protecting against loss or theft. 
  • Road Freight
  • One of the distinct advantages of road freight is access to underserved regional areas. In effect, this gives companies the benefit of door-to-door delivery. Road freight costs can be very competitive, but there is an increased risk of damage to goods over long distances. Plus, delivery speeds can be affected by traffic delays or roadblocks.

Global freight forwarders determine the best possible options by taking into account:

  • How long transportation will take
  • Whether it's the most economical route possible
  • Reliability of the transportation service and service track record

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Why Should Businesses Use International Freight Forwarders?

Intercontinental freight forwarding services can provide many advantages to companies considering overseas shipping. Below we cover supply chain services in more detail.

End-to-End Ownership

Partnering with a global freight forwarder enables businesses to outsource the complete management of product delivery to overseas customers. These services have both the experience and know-how, providing an advantage in terms of reliability. Companies can rest assured that the freight forwarders have found the best possible combination of routes and carriers to optimize costs, enhance the delivery experience, and manage any concerns, delays, or customer complaints that may arise.

Cheaper Costs, Increased Speed, and Enhanced Reliability

Global freight forwarders have established working relationships with key transportation service providers worldwide. They negotiate the best possible rates after carefully narrowing down the most economical routes. The advantage of volume discounts gets passed on to your business. 

Also, the carrying capacity of transportation freighters can change from day-to-day meaning that rates can vary. The freight forwarding partner has already done the legwork of nailing down the most optimal rates for any given route. 

In addition to pricing, global freight forwarders also look at speed and reliability. Speed is of the essence in today’s business ecosystem. Fast delivery times can be a crucial differentiator to customers who have any number of service providers from which to choose. Businesses with short delivery times have a distinct advantage in competitive markets. 

Partnering with a global freight forwarder ensures fast delivery times, reduces costs, and optimizes the overall experience for both businesses and customers.  

Access to an Extensive Global Network of Delivery Partners

Global freight forwarders have existing relationships with an extensive network of global entities that make the seamless transportation of products possible. These can include air freighters, trucking companies, ocean liners, ground handlers, local & global logistics operators, warehouse operators, and customs and financial brokers. 

Being able to leverage an extensive network of global service providers is a distinct advantage for companies looking to expand their markets. 

Ownership of Regulatory Compliance

International trade requires compliance with legal and regulatory standards. These standards can vary from jurisdiction to jurisdiction. Meeting these global trade requirements involves cumbersome administration and documentation processes. 

Errors and oversights can result in challenges with customs clearances. These can ultimately cause delays and increase costs. 

Global freight forwarders take the stress of navigating this complex regulatory environment off of the shoulders of their business partners.

Insurance Coverage

Including insurance can increase costs. However, it can add an extra layer of security when potential complications such as damage, loss, or accidental mishandling are factored in. Additionally, customers may ask for compensation. While insurance may not cover all possible contingencies, an intercontinental freight forwarding company may have relationships that can help businesses protect their investments. 

Warehouse and Fulfilment Services

Global freight forwarders can also manage warehouse and fulfillment services for businesses. Warehouse management is a complex, labor-intensive task that requires additional staffing. Considering everything involved, outsourcing this component makes sense for most businesses.

They can also manage the collection of goods, storage, inventory monitoring, packaging, and timely delivery to customers.

Ease of Doing Business and Improved Customer Experience

Technology makes it possible to connect the business, the intercontinental freight forwarder, and the customer making it easy for all parties to talk to one another. Each has visibility into the parts of the shipping process flow that are relevant to them.

Customers can easily track the location of their shipments at any given time. This aspect enhances their experience, increasing customer satisfaction levels.

How Does the Process Work?

Typically the intercontinental freight forwarding process involves the following steps: 

  • Export Haulage
  • The products or goods are transported from the shipper (business) location to the freight forwarder’s warehouse.
  • Items Check
  • The freight forwarder checks the items to see that they’ve been transported without incident and that everything is in order.
  • Exports Custom Clearance
  • The freight forwarder will liaise with the customs broker to get the necessary permissions to transport the cargo overseas.
  • Imports Custom Clearance
  • The documentation gets verified and cleared at the destination point by the local customs brokerage. This process can often start even before the international shipments arrive.
  • Destination Handling and Delivery
  • The freight forwarder receives the goods and all related documentation and ensures delivery to the end consumer. 

Getting the Best Rates From International Freight Forwarders 

To negotiate the best rates with global freight forwarders, consider the following:

  • Annual Shipment Volumes
  • Large annual shipment volumes can make it easier for the freight forwarder to provide more competitive prices. Freight forwarders typically leverage discounts by negotiating their pricing with transportation carriers based on annual volumes.
  • How Quickly Shipments Need To Arrive at Their Destination
  • Faster delivery times can involve higher costs. Explore business requirements with the freight forwarder as they may be able to provide suitable options that are more cost-effective.
  • Container Types
  • A partially loaded or full container load can vary in pricing. If shipments are infrequent, discuss the possibility of rearranging schedules (if viable), so the freight forwarder can organize shipments in the most cost-effective container model.

international freight forwarding - Rakuten Super Logistics

How To Set Up International Freight Forwarding

Researching options online as well as talking to trusted peers can provide a sense of what is available. But studying and authenticating service providers suitable for individual business needs can be a time-consuming and laborious process. Reach out to the experts at Rakuten Super Logistics instead!

Rakuten Super Logistics (RSL) is a leading eCommerce order fulfillment company that provides the scalability, flexibility, and cost savings retailers demand. We empower our eCommerce partners, regardless of their size, to compete with any online retailer globally. We provide the best shipping costs, efficient delivery services, and responsive in-house client support. Connect with us if you would like further information or if you’d like to request a quote.

Sources

  1. https://www.universalcargo.com/what-does-a-freight-forwarder-do-do-you-need-one/
  2. https://www.asianausa.com/7-reasons-use-international-freight-forwarder/
  3. https://wearedg.com/advantages-to-using-a-freight-forwarder/
  4. https://www.twill.net/knowledge-hub/logistics-know-how/understanding-ocean-freight/
  5. https://blog.greencarrier.com/top-4-benefits-of-rail-freight/
  6. https://blog.anderinger.com/blog/what-is-international-freight-forwarding
  7. https://www.interlogusa.com/answers/blog/get-best-rates-freight-forwarder/
  8. https://www.mach1global.com/what-is-the-freight-forwarding-process/
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