Many terms are used in logistics that are self-evident to people in that sector, but they are unclear or perhaps even incomprehensible to outsiders. In this blog we will discuss what a ‘forwarding agent’ does, where in the chain of international transport he stands and why he is indispensable.
When we refer to ‘expedition’ (from Latin ‘expeditio’: company) in freight transport, we mean the transport of goods. A forwarding agent sets the goods in motion on behalf of his client. The forwarder is therefore not only a transporter of goods, but is responsible for (almost) all steps of the import process. At the end of the journey, the client has his goods ready at a location of his choice and they can be sold. The forwarder knows customs rules from home and abroad, manufacturers, shipping companies and warehouses. With the help of his expertise and network, he can guarantee the lowest possible purchase price. The forwarder naturally charges a fee for all his services.
The web of customs rules
Let’s go through the forwarder’s main work one by one. To start with dealing with customs regulations. This knowledge is crucial when importing from outside the EU to the EU. Since the manufacturer is located outside of Europe, the local importer of the goods is liable for the products sold. He therefore benefits from the fact that the goods enter the EU legally and can also be freely sold here. The goods must be cleared at Dutch Customs. Customs clearance means that import duties, levies and VAT must be paid. After this, the goods enter free trade in the EU.
Economically responsible shipping
Second, we look at the network of manufacturers and shipping companies that the forwarder has. A slightly experienced freight forwarder knows local markets well and knows what is common. He will therefore negotiate the price on behalf of the importer and draw up contracts.
Intercontinental transport usually takes place with container ships. A company that operates a fleet is called a shipping company. Freight forwarders naturally work closely with shipping companies. To load ships as efficiently as possible, forwarders use a technique called groupage. Small partial shipments are combined to fill containers as well as possible. In this way, importers who place relatively small orders can still benefit from a bulk discount. Manufacturers can also sell smaller batches more easily, because the costs do not increase excessively compared to bulk goods.
Fun fact: You call a person who manages a ship a ‘ship owner’. This word comes from the Germanic language form ‘raidjan’ (also ‘prepare’, ‘ready’ and ‘already’ are derived from this). So a shipowner was someone who prepared ships for departure from the port. In line with this, ‘ships reason’ has been given the meaning ‘operate ships’.
A network of relationships
Finally, the forwarder can also help the importer find a storage place for his goods. Of course the importer wants to be where to wear out as soon as possible, but sometimes a batch must be temporarily stored in the Netherlands. A forwarder can also be of service to the client with this. In English, a freight forwarder is called a ‘freight forwarder’. The freight is, as it were, forwarded by him. Just like a postal company, actually. A client no longer has to worry about the processes. In the end, he simply has his goods where he wants them.
The primary task of a forwarder is to unburden. The labyrinth of legislation, logistics planning and negotiations is quite overwhelming. A forwarder like Ademar has 39 years of experience with the most diverse types of cargo. The people of Ademar are now easily relieved. As an SME or webshop owner you can benefit from this expertise. Call or email Ademar BV from Rotterdam.