If your business trades overseas then there are a range of logistical issues that you need to consider. The regulations and legislation governing import and export are a constantly moving target; challenges with shipping, finding cost-effective solutions, and ensuring that everything gets to where it needs to safely can be an incessant challenge.
If you’re shipping goods overseas on a regular basis then you may well be looking for ways in which you can reduce costs, simplify the process and increase your profit margins. In which case, a freight forwarding company may well be the answer.
What are they and what advantages do they give to businesses who trade overseas?
Are there any disadvantages?
What is a Freight Forwarding Company?
A freight forwarding company will organise the shipment, working as a third party company to help manage complex processes and ensuring the easy management of long journeys. They will usually be hired when a company is growing quickly. This growth can make it difficult to manage the number of shipments, creating time and resource pressures that make it impossible to develop their own shipping system.
What are the Advantages of Using a Freight Forwarding Company?
There are a range of advantages that using a freight forwarding company can give your
business:
Reduced Costs
Due to economies of scale and the huge quantities of goods that freight forwarders transport, the overall cost per unit is radically reduced. This can make it an intelligent option for smaller companies that rarely or never send large shipments and who cannot afford to pay high freight charges.
An Experienced and Trusted Service
Freight forwarding companies are usually experienced at what they do and have built up a network of information and contacts. They are trusted by a wide range of different companies to deliver their goods across the globe. With the risk of loss connected to shipping goods, this experience and time-proven track record can be reassuring. You need to be confident that your goods will reach their destination without encountering any problems.
Taking Care of Legal Matters
That experience also means they are skilled when it comes to negotiating the legal
documentation required for all kinds of international deliveries. When you’re shipping across borders, incomplete or incorrectly completed documents translate to delays and extra costs. Your goods may even be seized by customs and banks could place a hold on the transfer of funds due to irregularities on your documents.
If you’re in the early stages of shipping overseas it can be easy to make mistakes. Errors can be incredibly costly, resulting in significant losses and delays for your business. An experienced freight forwarding company can negotiate the legal intricacies of shipping to different jurisdictions.
Builds Safeguards into the Shipping Process
A freight forwarding company will have built up a tried and tested way of handling overseas shipping. This helps to reduce some of the risks associated with shipping overseas. These risks can potentially lead to severe losses, customer complaints, a negative impact on your company reputations and severe losses.
No freight forwarding company can offer complete reassurance about timings or any other problems that may occur beyond their control, but they do reduce risks considerably. Using a freight forwarding company allows you to focus on your core business.
A Guaranteed Arrival Time
Barring any major logistical problems your freight forwarding company will be able to provide a guaranteed time limit for the arrival of your goods to a particular destination. The routes will be planned beforehand with a variety of emergency measures in place should changes need to be made. A freight forwarding company will move heaven and earth to meet deadlines because their business reputation rests on their ability to do so.
Are there any Disadvantages to Using a Freight Forwarding Company?
While the benefits of freight forwarding companies are clear, are there any potential
disadvantages that business owners need to be aware of?
Communication Problems
Any form of miscommunication that occurs between the shipment owner and the forwarding company can create problems. If there are gaps in the provided data this could impact on the efficiency of the shipment and delivery. Date deficiencies are a major cause of delays in international shipping. An experienced freight forwarding company will be able to go some way to addressing these issues.
Unfair Pricing
If you take care of shipping yourself you can monitor the costs associated with the whole process. If you use a freight forwarding company you may be unclear about what costs are being applied and how they’re being calculated. This is why it’s important to get a number of quotes prior to choosing a service. The cheapest may not be the best however, and it’s important to ask how the charge was calculated.
Lost Shipments
No matter what measures are taken to ensure the safe transit of goods, lost shipments do happen. There is always the risk of lost goods, or problems with severe weather or shipping delays and failure. That said, even if you handle the entire process yourself, you will still face these problems and run the risk of shipments being lost.
Freight Forwarding Companies aren’t Regulated
Although freight forwarding companies play a major role in facilitating global trade they are not all properly regulated across the world. Be sure to check the background and credentials of every freight forwarding company you consider. Choosing the right company to work with gives you all of the benefits of using a freight forwarding company while reducing the risks.
SSO Logistics offer a tried, tested and trusted freight forwarding service to a growing range of clients. We offer complete transparency in our pricing structure, while providing rapid response rates and excellent customer service.
To find out more about what we offer contact us today.
