Why is freight forwarding important? And how does it work?

Why is freight forwarding important and How does it work ?

There are various means of shipping commodities from one location to another like rail, air, highway, or waterway. Freight forwarding is quite popular in almost all countries. According to the Canadian International Freight Forwarders Association (CIFFA), Global trade has been increased rapidly since 1948 to ensure the timely and organized flow of goods across the world through freight forwarding. There are 40,000 forwarding and logistics firms in 150 countries involved in this business.

What Do You Understand from Freight Forwarding?

Freight Forwarding

Transporting goods and cargo to-and-fro is known as freight forwarding. Companies, which are involved in coordinating the export and import of goods and cargo. They often provide an entire range of services, including warehousing, packing, customs clearance, and transportation. Freight Forwarders or called as freight forwarding firms also cater extra freight forwarding facilities like providing freight consolidation.

Following are the criteria to execute strategic logistics plans

With the assistance of import and export, businesses can easily execute prudent logistics plans.

  1. You must need an expert knowledge of customs protocols, which vary as the port or country changes.
  2. Robust problem-solving skills to tackle emergency circumstances like obstructions created by weather, technology, or human nature in catering timely travel.
  3. Good network building is essential as parties are the only thing that makes the supply chain robust.
  4. Licence is also required.

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Freight Forwarder’s Role

Shipment Tracking


They use a Transportation Management System (TMS) to keep track of a shipment's progress at all times.


Custom Brokerage

It is necessary to have licensure if you want to involve yourself in customs brokerage, which is also called a Customs Brokerage Licence. This enables the brokers to manage and submit detailed documentation in order to complete importing/exporting processes.



Some forwarders own warehouses, if not they arrange the same, which is operated by a nearby affiliate, for the product storage. A process of storing products in the warehouse is called warehousing.





Bargaining with carriers for affordable shipping rates is the most complicated task as the pros and cons of the cargo type, space needs, time flexibility, credit status, and more are considered the basis of the negotiation.



Cargo Space Scheduling

If you are a forwarder, you will need to have excellent coordination skills. When you employ a freight forwarder, deliberate preparation is critical for observing the profitability of a shipment so that you can secure punctual sailing and prioritize the possible intermodal shipping choices.

Consolidating Freight


Most of the time, the forwarders have to do business with the people who need to deliver cargo that does not fill a whole container. Some freight-forwarding customers do not have sufficient goods that do not utilize the entire container, freight consolidation takes place here that includes Less than Container Load or LCL shipping service. In which multiple and smaller consignments are booked aboard a single container. As per the requirement of space for the cargo, the shipping cost is allotted to all the participating clients.

Providing Cargo Insurance

Cargo Insurance

Forwarders can also offer a cargo insurance policy to their customer, called freight insurance, to compensate the loss of payee for damaged or stolen goods during the transit.

Why is freight forwarding so important?

Freight forwarding makes the import and export process easier. Specialized services in freight forwarding provide efficient and stress-free dealing in context to transportation of commodities.

Extremely Knowledgeable

Freight forwarders are experts in the supply chain who have the potential to accomplish tight deadlines and are able to build an organized system for the timely delivery of goods to avoid unexpected difficulties like delayed goods or rerouted services. They do all the necessary paperwork, pay the required tariffs, and handle other taxes.

Excellent Customer Services

Customer service

They provide excellent customer service and build relationships with global agents in order to ensure a streamlined process.

Activities involved in customer service

It entails offering assistance to both potential and existing customers. In addition to answering client inquiries via in-person, phone, email, chat, and social media interactions, these experts may also be in charge of developing documentation for self-service support.

Cost Savings

Cost savings

If there are high-volume goods to be transported, then there are 90% chances that freight forwarders will negotiate on lower terms. After getting agreed on lower terms, they consolidate smaller shipments with other shipments from various businesses to save your money as well as to create a full load.

Insurance Filing

Freight forwarders possess expertise in getting coverage for shipments as well as providing insurance whenever anything goes wrong with a shipment.


Freight forwarders do not work on contracts, which means it is easier for the businesses to get more flexibility in transporting goods. Firms having the freedom to choose carriers also ensures higher levels of high-standard customer service. Quality freight forwarding services guarantee the timely transfer of goods across borders. They provide a huge benefit to international companies by reducing mental fatigue while offering reliable transportation at reasonable rates.


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How Does Freight Forwarding Work?

Following are the stages in the freight-forwarding process:


This is the process of transporting things from a shipper's location to a freight forwarder's facility via truck or train. The time taken for transportation of commodities depending on distance, and geographical location. The duration of transportation in this stage varies from hours to weeks.


When the products are delivered to freight forwarders, they inspect each item at the item checkpoint to confirm that everything has arrived safely.


Shipped goods are cleared in this stage by customs brokers, who are liable for submitting cargo information and related documents. The shipper and recipient must agree on signing an agreement. Nevertheless, an inability to provide this service generates a requirement for the third-party customs broker.


When the cargo has arrived, custom documents are checked by the authorities in the destination country. As soon as the cargo arrives, a freight forwarder or a nominated customs broker is accountable to clear the cargo.


Various processes are implemented during this stage comprising obtaining, and checking all the required documents of the cargo, evaluation of outstanding documentation carrier bills, and more.


Similar to export haulage stage, this stage includes the transportation of all the commodities from the warehouse to the receiver's location, and it is proffered by the freight-forwarder.

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