What Is a Freight Forwarder? | Types of Freight Forwarding Services for Small Businesses | Benefits of Freight Forwarding for Small Businesses | How to Choose a Freight Forwarder for Small Businesses
An efficient supply chain is the lifeblood of all small businesses. Whether shipping domestically or internationally, entrepreneurs must ensure their goods arrive at their final destination safely, quickly and cost-effectively. With the high costs of handling logistics in-house, many small businesses are turning to freight forwarding companies to deliver tailored solutions for small enterprises.
From small business air and ocean freight to 3PL and foreign fulfillment solutions, a freight forwarder is a small business’s vital partner in ensuring low shipping costs, fast delivery times and high customer satisfaction.
What Is a Freight Forwarder?
Within the United States, domestic businesses ship trillions of dollars worth of goods each year using various freight methods. According to the most recent figures from the Bureau of Transportation Statistics, an estimated $17.5 trillion worth of goods was shipped within the U.S. in 2017 alone. Whether by truck, rail, sea or air, millions of American businesses rely on freight infrastructure to get their products to their customers safely and on time.
For America’s more than 30 million small businesses, shipping goods domestically and internationally can be a massive undertaking without the help of a specialized freight forwarding company. As the backbone of America’s economy, small business owners need cost-effective and reliable support in ensuring they can get their goods to their customers and continue to serve and expand in new markets. A freight forwarder specializing in small business logistics can help ensure your success.
Freight forwarders organize the shipment of goods between the manufacturer or distributor and the final destination, often working with multiple carriers to find the best rates for the fastest service. Responsible for coordinating all shipment activities, freight forwarders are important allies for small businesses. They take on the responsibility of determining how best to ship their clients’ goods via which routes and by which method. They manage all the logistics, including determining weight, packaging and required insurance and paperwork for a successful shipment.
Types of Freight Forwarding Services for Small Businesses
Experienced freight forwarders offer several services to meet their customers’ needs. Many logistics companies go beyond just arranging trucking, ocean or air freight domestically. Today, freight forwarders respond to a changing global marketplace by expanding their services to include third-party logistics services and domestic and foreign fulfillment. This array of services available to small businesses under one service provider results in long-term, cost-effective solutions.
How small businesses use freight forwarding services depends on the volume of goods they ship, the locations they ship to and the time-sensitivity of their products. Freight forwarders have services that address all these unique needs, including the important solutions below.
Customs Brokerage
When shipping goods across international borders, you must have all your documentation in order. Most governments around the world have strict laws governing what can and cannot enter the country. They impose many regulations specifying which type of information must be provided to ensure there are no serious delays at customs.
Freight forwarding service providers routinely deal with customs brokers who are specialists and know which laws, regulations and fees are required to ensure packages are not held up at borders. These customs brokers have dealt with the various international customs departments and can submit the necessary information and appropriate fees required by the government.
In some instances, the paperwork required to ship an item, materials or products across an international border can be staggering. If the item being shipped falls into a “dangerous goods” classification, partnering with a freight forwarder and their customs broker allies can make the process significantly less complicated for you. They save businesses time and money and ensure packages arrive at their destination when expected.
Time-Sensitive Shipments
International logistics can seem like a complex web of multimodal and intermodal shipping companies. Freight networks rely on sophisticated computer software to track and optimize the contents and routes of each vessel. If we consider the vast number of logistics providers who work together to ship their customers’ products, the network becomes even more complicated.
Freight forwarders have the expertise, technology and experience to know which freight companies to choose and which of their services to call upon. They also know which customs brokers to consult for which international border crossing.
International logistics is one industry where consulting a professional service like a freight forwarder can save you lots of time and money. Often, their access and relationships with certain freight companies can provide much quicker and more reliable transportation of your goods than your local shipping company. These relationships also mean they can save on operating costs because of their frequent interactions with these freight companies.
Specialized Handling
Freight forwarders are specialists in the area of government regulations and laws in the shipping industry. From overweight and oversized goods to hazardous materials, their expertise can make a huge difference compared with a local shipping company that might not have the experience you require.
Transportation laws ensure that freight companies perform their tasks within an acceptable, safe limit, meaning that the public can be assured of their safety. In many instances, freight companies might not have the essential experience required or know the laws for shipping certain items. This is where freight forwarders stand out. Their experience with customs brokers, various shipping platforms and multiple freight companies means they have the right knowledge to ensure your freight makes it to its destination safely and on time.
Dangerous goods are required, by law, to be transported in containers that limit the chances of their exposure to the environment. It’s your responsibility to ensure your freight company is following all the applicable laws. If not, hefty fines and possible environmental damage or personal injury could occur in an accident. Partnering with an experienced freight forwarder means you can rest assured that any company they work with follows the law.
LTL and LCL Shipping
Less-than-truckload (LTL) and less-than-container load (LCL) are two types of shipping options that can save your business money compared to full-container-load (FCL) shipping.
When shipping products via truck trailer or shipping container, freighters often require that enough packages be shipped to fill up the entire trailer or container. When a small business ships enough product to fill up an entire trailer or container, the company has much more control over how the freight is handled. For instance, as the shipping company, you decide when the shipment leaves, whether there are any layovers and when the shipment arrives at its destination.
In the case of LTL or LCL shipments, your packages take up less than the full container or trailer and typically share that container or trailer with another client’s goods. Because of this, you have less control over the logistics of the journey, and it usually takes longer for your shipments to arrive at their destination.
The upside of LTL or LCL shipping is that it costs less by sharing the shipping expenses with other clients. Many small businesses prefer using LTL and LCL shipping because of the cheaper shipping costs. Freight forwarding companies can arrange both LTL and LCL shipping for small businesses to save them money while still ensuring the most effective transportation methods available. On the other hand, for companies shipping a higher volume of goods, freight forwarders can also arrange small business FCL shipping for faster shipments.
3PL Distribution and Fulfillment
Third-party logistics (3PL) providers offer unique services for businesses that require warehousing, shipping or logistic services but might not want to invest in their own facilities. 3PL providers offer their clients warehouse storage space and shipping networks to get their goods to them when needed.
With real estate and rental prices so high, business owners might be hesitant to invest in facilities with more storage space than they may need. However, when their production ramps up, their floor space often disappears, and they need more square footage for storage. This is where 3PL for small businesses makes warehouse space conveniently available. In addition, 3PL providers often invest in warehouse solutions that ensure their clients’ goods remain at an ideal temperature and are secured from theft or vandalism.
When the client needs the goods stored at the 3PL warehouse, the provider ships their goods wherever needed. With 3PL services, businesses can focus their floor space on more essential activities than storage yet still retain extra materials for production or store finished products for future sale.
Benefits of Freight Forwarding for Small Businesses
Given the many services freight forwarders offer and the numerous responsibilities they alleviate for business owners, freight forwarding provides enormous benefits to mom-and-pop enterprises looking to improve their systems.
From saving entrepreneurs time and money to securing better customer relations to ensuring regulatory compliance, freight forwarders are integral partners for manufacturers and distributors across the nation. Below are a few of the benefits of small business freight forwarding.
Negotiate Better Rates
One of the primary benefits of freight forwarding for small enterprises is that freight forwarders can secure better shipping rates than small businesses can on their own. Since freight forwarding companies work with several clients, all shipping varying amounts of goods, they can secure better shipping rates based on the volume of goods they ship. It’s more expensive for a small business to ship goods directly themselves because they typically aren’t shipping in high enough volumes to make it cost-effective.
With a freight forwarding company, your goods are shipped with goods from other businesses, pooling together the volume necessary to bring shipping costs down — savings that get passed along to you, the business owner, and your customers.
Speed up Delivery Times
When micro-businesses ship a limited number of goods, the costs can be higher than shipping in volume. To reduce shipping costs, business owners tend to opt for longer shipping methods because they are less expensive. By relying on services that offer domestic and international logistics for small businesses, entrepreneurs can secure faster shipping methods at reduced rates. This is especially beneficial for businesses that have customers internationally since international shipping is the most expensive and typically takes the longest.
Additionally, international freight forwarding for small businesses also helps speed up delivery times because the service provider is highly experienced in customs brokerage for small businesses. Many shipments get delayed at customs if they don’t have the proper paperwork filled out correctly. This is one of the leading causes of delayed freight, and it’s an obstacle that small business owners can’t afford to face.
Ensure Compliance
Different goods have different regulatory standards when being shipped both domestically and internationally. Whether it’s overweight goods or hazardous materials, business owners need to know the correct way to ship goods to ensure compliance with regulatory bodies. Additionally, when shipping internationally, it’s imperative to meet the various customs requirements, which differ by each country.
Freight forwarding companies know the many compliance standards and ensure that whatever goods they’re coordinating for shipment fully meet this array of requirements before shipment.
Alleviate Logistics Duties
Small business owners who ship goods themselves can spend a lot of time and money calling different carriers, trying to figure out the best rate for the fastest service. Additionally, they also need to invest time in researching compliance standards ahead of time.
All these logistics duties can take away from the precious time entrepreneurs need to spend innovating and growing their business. Using a freight forwarding service frees up valuable time for mom-and-pop enterprises because the service provider takes care of all these responsibilities. They have proven systems and processes for shipping goods efficiently and effectively.
Ensure Products Arrive Safely
When companies ship products to customers, they want the assurance that the goods will arrive at their customer’s door or final destination safely. It’s critical for the company’s brand image that customers receive their goods in good working condition. During shipping, there’s an increased risk of goods becoming broken or ruined from mishandling or improper packaging.
Freight forwarding companies have experience properly packaging and labeling products for shipping. These companies know the best techniques for protecting goods and how to ensure that the carriers handle the goods safely. Freight forwarders also pay particular attention to how goods should be packaged depending on the type of cargo vessel that will carry them.
Packages carried domestically via truck need simpler packaging than goods carried overseas by multiple freight methods. When goods get handled multiple times on their journey, there’s a greater risk of product loss, so they need to be packaged accordingly.
Increase Customer Satisfaction
A final and ultimate reason why freight forwarding is beneficial for small businesses is that it ensures customers are happy with the goods they receive. Acting as an intermediary between the business owner and the customer, freight forwarders have a shared stake in their clients’ success. Freight forwarders can save small businesses money by securing good rates, and these savings get passed along to the customer.
Additionally, when freight forwarding companies find the fastest routes to the destination, customers are happy to receive their products quickly. Finally, by ensuring that all shipped goods are properly protected, the freight forwarding company helps small businesses deliver a high-quality final product that meets the customers’ expectations.
How to Choose a Freight Forwarder for Small Businesses
More small businesses today rely on the agility and innovation that freight forwarders offer. Because of the rising demand for e-commerce goods being shipped worldwide, there are many freight forwarding companies to choose to partner with. Small businesses need to find the right freight forwarder for their enterprise.
The best service provider for your company will be one that understands how small businesses use freight forwarding and offers solutions tailored to entrepreneurs. As such, freight forwarders need to have experience working with other small business owners and have a solid track record in mom-and-pop freight forwarding. They need to be able to provide flexible services that meet the needs of growing businesses.
When choosing a freight forwarder for your small business, ask the following questions about their qualifications:
- What range of services do they offer?
- Do they help with both domestic and international freight forwarding?
- Where are their distribution centers located?
- What’s their experience in negotiating carrier rates?
- Do they have a good track record with customs brokerage and compliance?
- Do they specialize in a category of goods, such as oversized products or the food and beverage sector?
Above all, small business owners should work with a freight forwarder interested in building a long-term partnership. Ultimately, the service your freight forwarder provides is a reflection of your company, and a reliable provider takes this responsibility seriously. They see themselves as integral in their customers’ success and place a high value on this shared interest.
Choose Kesco Logistics for Small Business Freight Forwarding
Small businesses require freight forwarding services that are as nimble as they are. One-size-fits-all solutions are no longer effective in a changing world. Enterprises need dynamic services tailored to their needs. For full-service international supply chain solutions, choose Kesco Logistics.
Since 1989, Kesco has been delivering flexible freight forwarding and logistics services to small businesses like yours. We offer a range of freight forwarding services from trucking, air and ocean freight to customs brokerage and small business foreign fulfillment. With decades of earned experience, we also proudly serve several specialized markets, including start-ups, apparel, contract furniture, specialty foods and more.
For more information on our freight forwarding and supply chain solutions for small businesses, contact Kesco Logistics today.
