The role of the freight forwarder is to move cargo from the factory floor, to your warehouse or basement. When importing from Asia, the freight forwarder can be part of what make – or break – your business.
1. Is the forwarder primarily based in your market, or in China?
As said, the role of a freight forwarder is to move cargo from point A to point B. To do so, the forwarder needs local representation in both the country of origin and destination. Assuming that the forwarder did everything from the pickup, to shipment, unloading, customs clearance – and final delivery – there would probably only be a few forwarders in the entire world, given the huge resources an end to end supply chain requires.
But that’s not how the shipping industry works. Instead, the forwarder is part of a large network. In most cases, it is easier to work directly with a freight forwarder based in your own country. Getting cargo out of China is normally less complicated than getting the cargo into your country. As such, you want to work with a freight forwarder that is experienced with local importing and customs procedures.
In addition, you have somebody speaking your language, that is held accountable to the regulations in your country. If you work with a Chinese forwarder, they’ll use a forwarder in your country, that is part of their network. Still, you will for the most part communicate with the forwarder in China. freight forwarder
2. Do they have their own employees in China?
Some larger freight forwarders are represented on both sides, for example, in Shanghai and Los Angeles. While this is less important than having a local contact, it does give you more control and transparency in your supply chain. With direct access to your forwarders staff in their China offices, you can issue orders and request information directly from the source.
This can save time, and reduce risks, when coordinating the delivery between your manufacturer and the forwarder in the port of loading (i.e., Shanghai or Shenzhen).
3. Are they licensed to act as your customs broker? (US only)
US based importers must hold a customs bond, that is either valid for a period of time (i.e., 12 months) or a single shipment. The customs bond normally costs around $300 per year, and can be purchased via a Customs broker. The Customs broker can also be tasked with filing all the other customs clearance paperwork on behalf of the importer, thus helping you to save time and money.
However, it is not mandatory. When importing from China to the United States, it is critical that the freight forwarder is licensed as a customs broker in the US. If you are an American importer, you should only work with forwarders with local representation in the United States.
4. Do they have customer references?
There are a lot of shady companies in the logistics industry – and I’m not specifically referring to Chinese forwarders now. I have worked with a handful of forwarders in China over the years, and the European owned companies have been worse than the forwarders owned by locals.
In addition, big forwarders are not necessarily more reliable than the small ones. It can be complicated to weed out the bad ones. My advice here is that you ask for customer references, and call them up to see what they have to say about the forwarder in question.
5. Do they offer online tracking?
Online tracking is not offered by all freight forwarders. However, thanks to ‘digital’ freight forwarders like Flexport.com and Shipwire.com, it is possible to track cargo in real time. Online tracking is more common for air freight than sea freight, as the former is dominated by a few large companies – such as DHL, FedEx and TNT.
6. Do they offer other logistics services?
Most of our customers engage in some sort of e-commerce. If you are selling anything online, you may need additional logistics services. For example, some forwarders can offer fulfillment and domestic delivery services. If possible, try to work out a solution that covers all your logistics needs.
7. Do they offer LCL shipping? LCL (Less than Container Load) shipping enables importers to share one container. Hence, it is suitable for companies that only buy a few cubic meters of cargo. Most freight forwarders offer LCL shipping, but some don’t. Hence, you should bring this up when you try to find the right forwarder for your import business.
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