Freight logistics is the overseeing and management of a cost effective operation and the delivery of goods. It combines logistics experience, human resources and knowledge to ensure the smooth journey of goods between carriers and shippers.
Freight logistic activities in their most basic form include:
- Making contact, selecting and engaging carriers and transport companies.
- Negotiating terms and conditions and rates for the transportation of goods.
- Preparing the labelling and appropriate paperwork that is associated with the transportation of shipments.
- Scheduling shipments to be picked up by carriers at desired times.
- Planning to optimise the best mode of transport, routing and load balance.
- Tracking the movement of shipments through the Supply Chain.
- Working with Customs brokers to ensure compliance.
- Ensuring the necessary insurances are in place to ensure goods are insured whilst in transit.
- Handling freight claims.
- Managing the receipt and payment of invoices associated with the shipment of goods.
- Constantly looking for optimal methods to improve delivery performance, reduce time and cost and lower environmental impact.
This long list of tasks can be very much underestimated and underappreciated when it comes to freight logistics. Without a proper Freight Management Company most company operations would cease.
The Role of Freight Forwarders
A freight forwarder assists companies in the process of transporting goods from one place to another. They use the most cost-effective methods with a suitable shipping company to ensure that every point of the journey goes smoothly.
Freight forwarders contract with a number of companies covering sea, air or road to transport goods on behalf of their clients. Although some freight forwarders have their own warehouses and vehicles, they aren’t necessarily the ones to carry out the transportation. Usually, they are the experts that are able to lead on the logistics and arrangements that will enable a smooth process giving companies piece of mind that their goods will be delivered.
What Can you Expect from a Freight Forwarder?
A freight forwarder will be able to listen to the shipping needs of your business and be able to tailor those to a logistically sound plan at every step of the way. From your budget and time requirements they will able to recommend you the best method of transportation, whether by road, air or sea. As well as this a Freight Forwarder will be able to make recommendations on:
- Customs Clearance – From origin to destination, forwarders should be able to deal with all customs processes. This includes handling all paperwork and fees on your company’s behalf.
- Shipping Documentation – Forwarders should be able to deal with all shipping documentation including Bills of Lading, Certificates of Origin, letters of credit or any documents required by banks before payment is released.
- Insurance – A reputable freight forwarder will be able to recommend insurance services that will cover a shipment for loss or damage.
- Logistics and Supply-Chain Management – Which can include but is not limited to fulfilment, customs consultancy and contract logistics services.
Logistics collaborates with several departments in an organisation, among those; operations, manufacturing and marketing. These interactions influence finance, production, engineering, marketing, transport, warehousing, purchasing and inventory management. When the responsibility of communication is passed to a reputable logistics provider, related costs are reduced as they minimise the amount of connections needed to link a variety of economic players all working towards the same goal.
Tracking Your Shipment
Freight forwarders typically use specialised software called a Transport Management Systme (TMS) to track shipments, making any freight’s journey transparent to the freight forwarder and to the company instructing them. This helps logistics management to save money, develop more efficient procedures and improve customer service.
A TMS provides important data regarding carrier performance, costs and market trends. This enables freight forwarders to constantly stay cost effective. Additionally, the TMS enables forwarders to pick up on potential delays earlier enabling them to notify customers quicker.
Warehousing and Distribution
Diligent procedures in the warehousing and distribution area of freight logistics can pay dividends within the supply chain. Many costly mistakes can be made in this area. Consistent warehousing and distribution procedures help logistics earn trust within the industry and strengthen relationships between partners.
Several value added warehousing and distribution services include:
- Cargo Packing and Crating
- Pick and Pack (where individual components of an order are gathered together and placed into a box.)
- Vendor Assembly and Consolidation
- Kitting (where individual items that are related packed together into one unit)
- Visual Inspection Services
When goods enter or leave the country, customs brokers provide documentation for the shipper to prove that the required procedures have been carried out and that the goods are cleared for shipment. This is easier said than done. Goods are warehoused whilst going through customs clearance and if procedures aren’t complied with and mistakes are made, the fees can accumulate to hundreds and thousands of pounds.
The paperwork for customs clearance can be extensive and can differ from country to country and even port to port. Without the proper attention from a licensed customs broker, errors can be made when importing or exporting freight which can cost time, money and trust.
Some of the documentation required for importing and exporting cargo are:
- Purchase Order from Buyer
- Sales Invoice
- Packing List
- Shipping Bill
- Bill of Lading
- Bill of Entry
- Certificate of Origin
When shopping around for a freight forwarder, it is important to research their experience in dealing with customs brokerage. If not consider hiring a customs broker independent from your forwarder.
According to experts, the theft of cargo is a $30 billion a year business. Alongside this there are other threats that could happen to your cargo along the way which include:
- Long Voyages
- Extensive moving of cargo
- Bad weather
The protection of your cargo from any of this is extremely important. Some forwarders will provide a range of insurance options. Check with yours to see if there is an appropriate premium to suit your needs.