written by | October 31, 2022

Understanding Freight Forwarding: Examples and Types

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Table of Content


Freight forwarders play a crucial role in the transportation and export industry by helping various companies simplify or ease the process of shipping goods. The process of importing and exporting goods can become costly and time-consuming for large-scale manufacturers of goods who have bulk shipping orders for many goods in bulk. This is where Freight forwarders come to the aid of providing their services at lesser costs with increased efficiency in the freight forwarding process. Freight forwarders perform all the required duties assigned to them, like transportation of various goods and commodities across international borders, in a smooth and hassle-free process, on behalf of the shippers. 

Did you know? More than 400 Freight forwarding companies are operating in India and distributed throughout the country involved in the freight forwarding of Goods and commodities. 

Also Read: Import Export Business - Step By Step Guide for Starting An Import Export Business in India

The Concept of Freight Forwarding

Freight forwarding refers to organizing and coordinating the successful transfer of various goods and commodities across the international border on behalf of the shipper and the receiver. Those who are involved in Freight Forwarding are known as Freight Forwarders. Freight forwarders are termed as a person or an entity responsible for the transportation of goods from one particular destination to another. 

Companies involved in Freight Forwarding work to ensure the entire process is smoothly operated and efficiently conducted. Freight forwarders generally function as intermediaries between the manufacturers or the traders who hire them for their services and the transportation facilities that are required to send the products to the overseas market, which involves various carriers, handlers, and customs officials overseeing the entire process. A freight forwarder will be considered responsible for a large variety of activities like negotiations on Freight rates, cargo tracking, customs paperwork, and many other such activities.

Necessities For Processings

  • The custom rules and other protocols should be well known by the person willing to be a freight forwarder. There are different sets of rules and protocols in different countries, and some situations, in different ports too.
  • When the weather is not sound enough for smooth and transparent work, Freight forwarders are expected to be agile in problem-solving. They are expected to cooperate to ensure timely transportation.
  • It is important to ensure network development since the supply chain is considered strong only when the parties involved are strong.

Role of Freight Forwarder 

Freight Forwarding is the planning and coordinating of the movement of commodities across international borders, on behalf of shippers. The list of roles Freight forwarders play is as follows:

Packaging of Goods

Freight forwarders help various kinds of Businesses in packaging products and making them ready for export. The task is considered complex and involves immense concentration and creativity. The complexity of packaging varies depending on the destination. For example, packaging various goods to the US will be simpler than packaging goods to different destinations, which will involve loading and unloading goods multiple times throughout the route. 

Labeling of goods

Freight forwarders help businesses to ensure they have the correct label package and contain the following important information:

  • A list of products in the shipping container
  • Any hazardous item in the product and the country of origin of the product
  • It has correct details of the product's weight, reflected in either pounds or kilograms.
  • It includes details of the port for entry and the country language to which the goods are transported.

Also Read: Top Performing Import-Export Business Ideas In India

Documentation of Goods

The freight forwarder is required to oversee that certain documents are available to ensure the smooth transportation of goods, such as:

Bill of lading

A contract between the owner of goods and the transporting agency, a Bill of lading, is considered proof of ownership of goods that can easily be bought or sold while the goods are still in transit.

Invoice of goods

An invoice of the goods sent for transportation should be presented by the seller to the buyer to ascertain the fair value of the goods after assessing the amount of customs duty

Certificate of Origin

 A signed statement identifies the origin of a good being exported. It refers to the country of origin, that is, the country from which it is being exported. 

Certificate of inspection

The owner needs goods because it is proof that the goods have been tested and the quality is inspected according to the relevant standards.

Export license

It is a government document that authorizes The export of a specific quantity of goods to the relevant destination

Export packing list

It contains the details of packing items details such as usage of packing items, the net weight of the product being exported, and the measurements of the package for the product.

Freight Forwarder Examples

When it comes to Freight forwarder examples, there are some companies that are considered the top freight forwarders in the nation, which are:

  • Meraki Carriers Private Limited, situated in Chennai
  • Greenpark Logistics, located in Mysore Karnataka
  • M and M Shipping Agencies, situated in Ghaziabad
  • Wersel Shipping Agency, located in Coimbatore
  • Welcome Logistics Company, located in Navi Mumbai
  • BDG International Private Limited, located in South Delhi
  • Kankai Total Logistics LLP, located in Mumbai
  • Pan World Shipping Services, located in Kolkata

Types of Freight forwarders

There are various ways or types through which freight forwarding services can be performed to meet the needs of various shipping companies, such as:

Ground Freight Forwarding

This kind of freight forwarding is known for Ground transportation. It involves the door-to-door delivery of goods transported locally within the country's territory. Vehicles such as Trucks for loading and unloading goods and this method of freight forwarding are also considered cost-effective.

Rail Freight Forwarding

If you, as an owner of the goods, have a limited budget and are looking for an option that is environmentally friendly as well, Then Rail freight transportation will be considered the best option since it is an inexpensive option over the other methods. Since there is no traffic or obstacles in the way during the transportation process, it is also considered a safer freight forwarding option to shop goods domestically within the national territory.

Sea Freight Forwarding

It involves transporting goods through the sea route through domestic and international territories, with the help of ferries and ships, to send cargo across oceans. It is considered the oldest freight transport method and the most reliable option for shipping large containers or large quantities of goods across borders. Although it is a bit time-consuming, it is an inexpensive means of transportation of goods.

Air Freight Forwarding

It is the fastest means of freight transportation and is meant for goods with a lower shelf life and those that require immediate transportation and are fragile. Although this may be an expensive method of transportation of goods, it is considered a safer and more reliable option to transport your cargo to domestic and international territories without any issues.

Also Read: Start Export Import Business From Home – Easy Step-By-Step Guide

Conclusion:

The blog focused on the freight forwarding concept, examples of major companies involved in the freight forwarding industry, and the various types of Freight forwarding. Freight forwarders act as an intermediary between the company that makes the shipment and the final destination for the goods. 
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FAQs

Q: State the various types of freight forwarders.

Ans:

The various types of Freight transportation are as follows:

1. Ground Freight Forwarding

2. Rail Freight Forwarding

3. Sea Freight Forwarding

4. Air freight Forwarding

Q: State any four Freight forwarder examples of leading companies.

Ans:

Four Freight Forwarding top companies are

1. Meraki carriers private limited, situated in Chennai

2. Greenpark logistics, situated in Mysore Karnataka

3. M and M shipping agencies, situated in Ghaziabad

4. Wersel shipping agency, situated in Coimbatore

Q: State the documents required during Freight Forwarding.

Ans:

The documents required during Freight Forwarding are 

1. Bill of lading

2. Invoice of goods

3. Certificate of origin

4. Certificate of inspection  

5. Export license

6. Export packing list

Q: What is Freight Forwarding?

Ans:

Freight forwarding refers to the process of organizing, and coordinating the successful transfer of various goods and commodities across the international border on behalf of the shipper and the receiver.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.