The import / export business is ripe with opportunity, and there are plenty of newcomers to the trade eager to get their feet wet. However, most focus on the manufacturing and supply side of the equation without giving much thought to logistics.
The quality and experience of your freight forwarder will make or break the entire deal. With that in mind, we’re going to look at five essential questions that you should ask your potential freight forwarder before signing on the dotted line:
1. Do they have experience with your type of cargo?
There are many different types of cargo – everything from garments or machinery to chemicals or even hazardous waste. It’s essential that the freight forwarder you settle on has experience with the type of goods that you’re exporting. Once your cargo ships, it’s out of your control. That’s why you want your freight forwarder to know how to handle your products, and to be able to anticipate any potential problems along the way.
2. How extensive is their network?
This matters – probably more than you imagine. The best handlers are going to be members of trade associations and freight forwarder. A robust international network is going to facilitate your cargo getting where it needs to go. The biggest companies will have contacts all over the world. Just remember – all you need to focus on is the country you are shipping to. If you’re preparing freight for export to Australia, it doesn’t matter how many contacts a particular forwarder has in, say, China. This may sound painfully obvious, but far too many inexperienced exporters don’t stress the importance of networking.
3. How many containers do they move in an average year?
Experience matters, and asking them how much work they do in a given year cuts to the quick of this issue. Big business and many years of experience means that your forwarder will have seen it all. A variety of unusual situations can occur while your cargo is at sea, so you want to entrust it to a company that knows when and how to react.
To be honest, it’s easy to start a freight forwarding company. What’s difficult is actually running one. If they have years of high-volume experience, they are probably going to be able help you with all of the following:
Avoiding (or smoothing out) customs
Issues with routing
4. Where do their services end?
Some freight forwarders only see to the air or sea portion of your cargo’s journey. You might save a bit of money on their services in this case, but you’ll quickly make up for that in extra charges and headaches when you have to arrange onward shipping once the shipments reaches the destination country. Don’t be afraid to ask if they can arrange the final leg of your cargo’s journey – be it by road or rail.
5. Are they financially strong?
Exporters who are just getting started in the business are prone to overlooking the importance of financials. They assume, understandably, that they themselves will be paying the bills, so it doesn’t really matter. Suppose, for whatever reason, that the forwarder can’t pay the ocean carrier to release your cargo. Delays ensue, charges pile up and everyone loses in the process. If they are financially strong, they’ll be able to act in real time and send you the bill after the fact.
Those five questions will give you a good idea of how reliable a given freight forwarder is. If you’ve taken them all into consideration, you’ll feel much more confident about your choice.
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