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Considerations for Finding a Freight Forwarder

I hear a lot of new importers asking how they can find a good Freight Forwarder. Before we address the question of how to find a freight forwarder,  the question first must be asked, what exactly is a freight forwarder?

A freight forwarder helps to arrange for your freight to be forwarded from your supplier to you. The basic functions they perform are:

  • Negotiating freight rates with the shipping line (i.e. “the boat”) and book space
  • Helping to arrange your shipment via trucking companies, freighters, railways, and more
  • Storing your goods either for a short period of time or extended period of time as they normally have a warehouse in their local city (and potentially other cities)
  • Preparing bills of Lading and other documents

In the world of UPS that many of us are accustomed to, UPS owns the planes and trucks that they are using to transport their goods. In the rest of the shipping world, for the most part, it does not work like this. The person who owns the freighter does not arrange with the end-customer to arrange the freight. Instead they use very brokers and freight forwarders to fill their ships with containers (in fact the owners of the freighters actually normally rent their boats to other companies, but that’s another topic). You can view a typical freight forwarder job description here.

Almost every major city (and even non-major cities) has countless Freight Forwarders. Often times, these Freight Forwarders will simply be a small office of local Chinese immigrants. Vancouver, Canada alone has dozens of freight forwarders.

Most major cities have dozens of freight forwarding companies.

Most major cities have dozens of freight forwarding companies.

You will almost certainly need to work with a freight forwarder to have your order shipped to you. Whether you choose the freight forwarder or your supplier chooses one is up to you. Most freight forwarders offer fairly similar services, as I’ll discuss below, but there are some things to look for when choosing one.

If you’re having your products shipped via sea from a major Chinese port (which you probably are) to a somewhat sizeable city, then the chances are most Freight Forwarders are going to offer fairly comparable services and prices. Shipping a 20′ container or a small LCL shipment from Guangzhou to Los Angeles is as straight forward as it gets in the world of international freight.

Where the freight forwarder becomes more important is if you are dealing with somewhat unique circumstances. What are these circumstances?

  • You’re shipping something that has unique handling requirements, i.e. refrigerated goods, dangerous goods, etc.
  • You’re shipping a large amount via air
  • You’re having your goods shipped to/from an odd location

If your goods have unique requirements, such as requiring refrigeration, then you are best to find a Freight Forwarder who specializes in such shipments. One of the Freight Forwarders I work with specializes in shipping produce from China (specifically mandarin oranges!). With a shipment like this, there are a number of critical factors, most of which is time.  If you’re shipping a container worth of produce, having any delay can result in the shipment being completely useless. If you’re shipping a container of living room furniture, a small delay will likely have small consequences.

Freight Forwarder Christmas Dinner

Attending a Christmas dinner hosted by one of our freight forwarders. The table gifts included a selection of items from their clients, including oranges, Hello Kitty lamps, and assorted dried fish.

As mentioned, shipping full containers and less than containers (FCL and LCL) normally have little price variance. However, shipping large quantities of product via air can often yield very different rates from different Freight Forwarders. A fellow importer once showed me a picture of his office filled to the brim with boxes of makeup he had shipped via air from China. He paid just a couple of thousand dollars for the shipment but he easily could have paid several thousand more without shopping around for a good air freight rate (try guessing what the rate from UPS would be!). Almost all airlines have a portion of their cargo on passenger routes assigned for commercial use, and a good Freight Forwarder will work with these airlines to secure the best rates, which they hopefully can pass down to you.

Finally, if you’re having your goods shipped to or from a unique location, then choosing a Freight Forwarder who specializes in these routes is important. For the most part, this will not apply to the vast majority of shipments from China to a Western country. However, if you were shipping something from somewhere like Bishkek, Kyrgyzstan to Freetown, Sierra Leone, there’s a small number of companies with experience in shipping to and from such locations and finding a Freight Forward who specializes in such routes becomes more important.

So if you’re dealing with mostly plain-jane ocean shipments of products to a major city, what should you look for in a freight forwarder? The most important thing to look for is customer service and someone you can build a relationship with.

A good freight forwarder should be prompt in responding to your inquiries and rate requests. For me, I expect my freight forwarder to respond to me within a couple of hours of a rate request, either with the rate or a simple acknowledgement that they’re working on it. Having to pull teeth to get a response from your freight forwarder is a waste of everyone’s time.

Ultimately, it is important to be able to build a good relationship with your contact at your your Freight Forwarder- just like it’s important to build good relationships with your Chinese Suppliers! A good relationship with your Freight Forwarder will yield benefits like more priority for your shipments, more favorable payment terms, more promptness in responding to your inquiries, and so on. To give an example, recently I had a shipment arrive and there was some miscommunication between myself, the supplier, and the freight forwarder, and there was a delay in having the shipment released to us (in this case, telex released). The result was that we accumulated over a week’s worth of extra storage fees for the shipment, totaling close to $500. Leveraging my long relationship with my freight forwarder, I asked if they could waive these fees as a courtesy and they agreed.

Over time, the relationship you build with your Freight Forwarder is one of the most valuable assets in your importing business and/or career. Along with other relationships like the one you build with your Supplier(s), Customs Broker, etc., your relationship with your Freight Forwarder will save you time, money, and stress.

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6 Comments

  • Reply
    Peter Karpouzas
    March 23, 2015 at 1:29 am

    I have to say this is probably one of the best written blogs on the freight forwarding industry explaining the ins and out of the transport industry. Well thought out post

  • Reply
    Jason
    May 3, 2015 at 7:20 am

    Thank you for providing great info! It is really helpful when trying to start a new business.

  • Reply
    McCall Hazelton
    January 21, 2016 at 7:47 pm

    I really like how you sum up the whole process of who you should choose for freight forwarding in your last paragraph. The relationship that you build will be one that will stand the test of time, and be best for both of your businesses. Making sure everything you need, or the things you are shipping out are delivered on time, is crucial in the business environment today.

    • Reply
      David Bryant
      January 27, 2016 at 9:19 pm

      Absolutely – out of stockages due to late shipments can cost a lot of money!

  • Reply
    Ms. Huda Y. Mahdi
    March 10, 2016 at 5:50 am

    Hello,

    I’ve about less than one cubic meter of matches and safety flares need to be shipped from Pennsylvania to U.S Embassy in Bishkek, Kyrgyzstan, please let me know if you can ship these items to the mentioned location? Regards,

    Ms. Huda Y Mahdi
    General Manager & Owner
    Noor Almahaba Company
    BBN 165, JCCs ID, 37073
    Code: 9XK88, D.U.N.S# 557731402
    Iraq – Baghdad
    07901712997

    • Reply
      David Bryant
      March 10, 2016 at 9:48 pm

      Hi,

      Unfortunately we don’t do any freight forwarding services ourselves. I had a chance to visit Bishkek a couple years back – nice city :)

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