The Basics and Principles of Freight Forwarding

Freight forwarding services are essential not just to trade in Singapore, but also to international trade. They have the same function as a logistics company, albeit one that acts in a person, corporation, or organization’s behalf in the coordination of different transportation firms in order to ship products all over the world.

Roles and Services

Different kinds of products are imported and exported by freight forwarders in conjunction with air freight, sea freight, or even by land transportation services in Singapore every day, and depending on the destination that these products are shipped, more than one shipping company may be involved in moving goods.

Because these companies specialize in coordinating shipments and cargo services, any freight forwarding service should be able to cover the following basic roles:

    • Quote and secure freight costs – Rates for local freight and international freight vary, and one factor that makes one more expensive than the other is the nature (quantity included) of the product being moved.

    • Book cargo with carriers – Booking with a freight master in Singapore should be made as soon as possible in order to ensure that the cargo is placed in an ideal area in the carrier’s vessel that would expose it to the least amount of damage.

    • Prepare the necessary documents for export – Forwarding companies act as liaison to different carriers as well as customs officials in different countries other than Singapore, which requires them to procure the needed documents required by these countries.

    • Plan inland routing – Forwarding companies need to be adept when it comes to their logistics services in order to plan the fastest and most efficient inland routes for cargo delivery (and sometimes assembly).

    • Insurance – Believe it or not, the carriers themselves actually have limited liability. This is because of the different conditions and situations that could take place during the time the cargo is being transported, either by sea or air, but especially by sea.

Here are some of the more advanced roles that forwarding companies need to be able to cover as well:

• Consolidate freight – Also called “assembly service”, where logistics services make large shipments easier to move by breaking them up on land and assembling them once they reach the warehouse to be ready for export.

• Indirect carrier – Of course, forwarding companies themselves don’t operate vehicles. This is why they are otherwise known as NVOCCs (non-vehicle operating common carrier), meaning they contract other carrier companies to transport the goods.

• Interface with EDI (Electronic Data Interchange) – Forwarding companies need to know where the cargo is headed as well as the carrier’s route, which is why they need to keep track of it in real time via the internet, GPS, and satellite imaging.

• Logistics management – With all these roles that forwarding companies have to fulfill, they have the similar function to that of a logistics company, coordinating different services to ensure on-time delivery of the cargo to the destination point.

Freight forwarding is complicated, especially if you’re not familiar with it. If choosing the best from the different freight forwarding services is important for every company in need of a particular product in bulk, a different story could be said for freight forwarding companies. For them, choosing the right shipping company is highly important.

Choosing a shipping company for freight forwarders is also important because they are hired with moving the goods as fast, safe, and efficient as possible to ensure that they reach their destination in an undamaged state.

Insurance

However, there is no guarantee that every shipment arrives safely at the destination point, which is why there is insurance exists to cover or compensate the loss of cargo by air or sea. If the cargo is being transported by sea, the possible reasons for its loss or deterioration upon arrival may include the following:

    • Water damage – Waves will wash overboard and potentially damage delicate cargo, especially if the carrier encounters stormy seas on route to the destination.

    • Jettison – In situations where the ship could be compromised, the captain would have to throw cargo overboard in order to keep the vessel afloat.

    • Fire – Hazardous cargo such as chemicals and fireworks are often only allowed to travel by international waters, which is why carriers store them on the deck.

    • Sinking –In the event of a ship sinking due to engine failure or bad weather, all cargo would be lost and cannot be salvaged.

    • Theft and/or Piracy – Pirates will always ply international waters in search of loot, and there’s no guarantee that the carrier won’t run into them during the voyage.

Some Things to Remember

These are the things you should be familiar with when opting to have your shipment delivered via sea freight:

    • Consolidation – Where a particularly large shipment is broken down into several smaller segments and transported to the forwarder’s warehouse where they are then assembled.

    • LCL (less than container load) – This mode is for when a cargo is consolidated in a warehouse and then shipped along with other cargo.

    • FCL (full container load) – In this mode, the goods are not broken down into separate shipments.

    • RORO (roll-on roll-off) – This mode is generally reserved for drivable cargo that is too big for most containers.

    • Heavy lift/Break-bulk/Project Cargo – Specialized requests for oversized cargo need specific details as well as the starting date in order to be processed and shipped.

The reason why these terms are associated with sea freight rather than air freight is because transporting goods by sea is generally reserved for particularly large quantities of shipments.

When transporting goods by air, all that’s needed is the following:

    • The shipper’s full name and address
    • Full address of cargo location
    • Commodity details (i.e., dimensions, weight, name, description)
    • MSDS (for hazardous cargo)

Conclusion

The biggest factor that companies should consider when looking to ship products, whether it’s importing or exporting, is time, which is what freight forwarders offer. They provide the company with all the documentation needed as well as act on their behalf in coordinating the different transportation services needed to move the cargo.

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