The constantly growing trade and the related development of transport resulted in the separation of freight forwarding as an independent economic activity. Thus, companies are established that deal with the movement of goods at the request of clients, with the help of other entities specializing in the logistics industry.
Therefore, what is forwarding?
Freight forwarding is defined as organizing the movement of goods with the fulfillment of all related obligations, but excluding the transport itself. The entity performing shipping activities does it for profit, therefore it receives remuneration for its work from the client with whom it has established cooperation in this area.
The criteria for the classification of freight forwarding differ, although they are most often distinguished due to:
»Type of means of transport used: car, sea, rail, inland water, air.
»The area of services provided: urban, rural, railway station, border, port.
»The phase of the transport process: sending, receiving, moving.
»Type of cargo being moved: bulk, general cargo etc.
»Size of the area served: local, district, national, international.
»The scope of services provided: public, private.
The forwarder himself organizes the transport process, ensuring its proper course. The very good organization of this process is distinguished by the completion of all shipping activities by all participants taking part in it. In addition, they must be implemented in a pre-determined sequence and manner that was specified at the time of planning, resulting in the best possible quality of the service provided at the lowest possible cost. A forwarder is nothing more than an advisor and coordinator of transport processes, whose task is to find a solution suitable for his client. It is important that it may use other subcontractors to perform its activities and provide services:
»Forwarding, transport, logistics companies, etc.
»Customs agencies.
»Insurance companies.
Entities cooperating with forwarding are able to achieve many benefits. The most common are certainly:
»Providing professional advice and selection of optimal solutions, taking into account the time and costs as well as the type of risk associated with the transport of a given cargo. What’s more, the forwarding advises on packaging and insurance.
»Forwarding deals with the preparation, completion and distribution of documentation intended for the proper implementation of the transport process.
»Consolidation of smaller loads from various senders, thus completing full truck loads and the organization of return loads. All these activities contribute to reducing the company’s costs in the area of transport.
»Organization of customs clearance and ensuring its correct course. Involvement of financial resources, thanks to which the duration of the means of transport’s stay at customs clearance points is shortened.
»Freight forwarding contacts allow for more efficient transport of goods.
»Negotiating rates with subcontractors and ordering means of transport.
»Contacting all participants of the transport and commercial process. It is also connected with the lack of problems on the transport route, because the forwarding does everything to solve this problem in such a way as to involve the client as little as possible.
»Preparation of quotations helpful in determining the final price of the product, including delivery costs.
Forwarding companies cooperate not only with entities commissioning the organization and transport of goods. It is very important to cooperate with transport companies. Thus, carriers also gain many benefits from cooperation with forwarding.
»The carrier does not have to worry about collecting debts from many customers. What’s more, constant cooperation ensures short payment terms.
»The carrier does not have to employ employees who have adequate knowledge of transport, commercial law, customs regulations, etc.
»There is a reduced damage resulting from a better organization of the transport process.
»The downtime of the means of transport at loading and unloading points is shortening.
»Reliable, well-planned work due to a lack of customer network.