When you ship your goods from one place to another either in the same or different country, this comes under the process of freight forwarding. A freight forwarder plans & manages the whole journey. Freight forwarders handle paperwork, like customs forms and insurance.
Whether you transport your products by air, sea, or land, they know the best routes and methods. In this article, we will talk about all the important freight forwarding procedures in detail.
8 Steps of Freight Forwarding Procedure
The freight forwarding process involves several steps to ensure the safe delivery of your cargo. Let’s discuss the stepwise procedure for cargo transport.
Step 1: Export Document Preparation
The first step involved in the freight exporting process is the preparation of necessary documents. Different documents are required for freight forwarding, you have to prepare these on time. Different countries require different papers and certificates but the information required is almost the same.
The difference usually occurs in the document format according to the requirements of different countries. Some of the paperwork is also necessary to get further things done. The following documents are necessary for cargo export:
- Commercial or business invoice
- Shipment packing details
- Shipping bill
- Cargo lading bill
- Airway bill
- Origin certificate
- Certificate of Insurance
- Commercial credit letter
- Certificate of inspection
- Hazardous cargo declaration document
Step 2: Export Haulage
It is the transport of items from the manufacturer’s location (shipper’s place) to the freight forwarding location (warehouse or storage facility). Local carriers are needed to transport the product to the required destination. Therefore, freight forwarders reach out to the carriers for cargo pickup and conveyance.
This transport is usually done via road using trucks or rail. It may take from hours to days or weeks for export haulage. The timing depends on factors like the location, the distance between the two points, traffic conditions, and product type.
Step 3: Items Inspection
After the export haulage has been done, the items are reached to the freight forwarder, which is basically the checkpoint for the transported products. Now your forwarder will inspect the items received in terms of their condition and quantity to ensure smooth transport without any issues.
They will also make sure the number of items is the same by matching them with the order booked. In addition, packing and labeling will also be inspected. The inspection is done with the help of advanced scanners and modern sensors.
Step 4: Origin Cargo Handling
It involves proper handling including securely unloading the received cargo items from shippers. During this stage, the freight forwarders verify the product to make sure it does not have limitations in the target country.
Some countries have restrictions on the import of hazardous or flammable products. Therefore, it is necessary to obtain information about these products before export. These items include:
- Alcohol or alcoholic products
- Flammable liquids ( e.g., kerosene, xylene, etc.)
- Perishable products
- Drugs (e.g., anabolic steroids, cocaine, methamphetamine, heroin)
- Sharp-edged items
Step 5: Export Customs Clearance
Now it’s time to submit all the documents to customs authorities required for the clearance of product export. These documents have all the necessary information about the product and your legal license required for the export.
Now, online portals for custom clearance have been developed in some countries to speed up the process.
Usually, custom brokers handle the documentation process and submit them to customs. Freight forwarding companies also provide this service.
The custom agent also checks the items and their packaging to ensure that the export product meets the legal requirements. They evaluate the product value and calculate tariffs or taxes that should be paid before the exportation.
After the verification of documents and submission of the taxes, your shipment is ready to leave the origin country.
Step 6: Import Customs Clearance
In this step, the required documents must be submitted to the customs authorities of the destination country for the import of cargo. These documents are usually the same as those required for export clearance. The freight forwarders or customs brokers compile and submit all the papers to the official authorities.
Note: This process usually starts before the shipment arrives in the destination country to ensure smooth import of goods.
Step 7: Destination Cargo Handling
After the shipment has arrived in the target country, the proper unloading of the cargo is necessary to ensure no harm to the product. The freight coordinators here also inspect the cargo for any damage. They will also cross-check the number of items with the cargo invoice. They will also check the other import documents.
After that, the shipment will be kept in the warehouse before leaving for the final destination.
Step 8: Import Haulage
It is the transport of the shipment from the storage facility to the buyer’s place. This process corresponds to the export haulage but occurs in the import country. The freight forwarders assist the process by contacting the carriers for shipment transport.
The carriers deliver the goods to the delivery location via road using a train or truck. In addition, sometimes the consignees prefer to do this step by themselves. The freight forwarders have a tracking system to track the location of product for secure delivery.
Challenges Faced In Freight Forwarding
The following are the challenges mostly faced by freight forwarders during the process.
- Legal Compliance: Different countries have different rules for international trade and they are changing on a regular basis. The requirements for customs clearance and paperwork are also varying across countries.
- Rising Transportation Costs: Fuel prices are increasing day by day due to global economic conditions leading to increased shipping rates.
- Customs Delays: The delay in customs clearance will happen due to providing incorrect information or outstanding documentation.
- Capacity Issues & Cargo Damage: The limited capacity of ships due to some unforeseen reasons will cause an increase in shipment costs or slow down the process. There are also chances of cargo damage.
- Technological Integration: Some companies find it difficult to keep up with the advanced systems. It is difficult for them to use software for email management or cargo tracking.
- Supply Chain Disruptions: The most common challenges faced during freight forwarding are bad weather conditions and natural disasters. These conditions will also cause a delay in shipment.
- Coordinated Communications: Another thing is communicating with multiple parties like brokers, carriers, or customs simultaneously. It may cause miscommunication that will lead to further challenges in logistics.
FAQs
What Are Operations In Freight Forwarding?
Operations involve the whole process of transporting goods from the shipper to the recipient. It consists of several steps that include export haulage, items inspection, origin handling, export customs clearance, import customs clearance, destination handling, and import haulage.
What Is LCL In Freight Forwarding?
LCL refers to “Less than a Container Load”. It is the mode of transporting cargo via ships. It means that one container is not only filled with one customer’s goods but also with several other goods from different customers.
What Is COD In Freight Forwarding?
COD is the “Cash On Delivery” option for carriers to get their payment for the transport of shipments from the recipient of the goods. It is also known as “Collect On Delivery”.
What Are The Different Kinds of Freight Forwarding?
There are 4 basic types of freight forwarding. These are classified based on the route via which the freight is transported. These include maritime transport (ocean or sea shipping), road transport, air freight, and rail freight.
What Is Meant By FAK In Logistics?
FAK refers to the “Freight All Kinds”. It is a simple pricing approach where the transportation of all types of cargo is done with only one rate. It means that only a single rate applies regardless of the product type. This approach commonly applies to ocean freight.
Final Thoughts
We conclude freight forwarding involves multiple steps to ensure that your cargo is transported efficiently from the origin to the destination. Some of the most essential procedures in freight forwarding are document preparation, export and import haulage, inspection, handling & customs clearance.
If you want to send your products from China to anywhere in this world, BanSar is here to give you the best assistance at highly affordable rates. Get a free quick quote now!
