In logistics there are a lot of specific terms familiar to people in the sector, frequently recurring in their daily vocabulary. These terms and definitions are often less familiar to people outside the logistics industry. Take the term ‘freight forwarder’, which is familiar to people who deal with imports and exports on a daily basis. But for anyone who is still orienting themselves on the import and export market, it may be a completely new phenomenon. In this article, we will dive into the definition and all the things that come with the term ‘freight forwarder’.
A freight forwarder takes care of the transportation of goods from point A to point B, usually on behalf of a client. Since importing and exporting goods involves a lot of hassle and procedures, it can take up a lot of time and effort. That’s why many importers choose to make use of a forwarding agent who takes care of all these matters. For example, a forwarding agent is not only responsible for the transport, but also, for example, for arranging the correct documents to be able to show to customs upon arrival. At the end of the journey, the forwarder ensures that all goods arrive at the right location and the client can immediately start selling.
A freight forwarder knows the customs regulations of the Netherlands and abroad, relevant manufacturers and transport companies, shipping companies and warehouses. With the help of his network, he can ensure that you pay as little as possible over the entire journey. Of course there are the costs for the services the forwarder provides. The use of a forwarding agent is mainly aimed at facilitating the import or export process. To get a better idea of what a freight forwarder does exactly, let’s take a look at the most essential qualities that a freight forwarder should possess.
- Knowledge of customs formalities
Perhaps one of the most important and complex factors of international logistics are customs regulations, which vary from country to country. Because many manufacturers are located outside Europe, the person who imports the products is liable for the products sold. To ensure that he/she does not get into trouble, it is important that the transport process is done legally, from start to finish. For example, the goods must be cleared through Dutch Customs, which means that import duties, levies and VAT must be paid. Once that process has been completed, the imported products can be legally sold in the EU. Do you import products from within the EU? Since January 1, 1993, no customs formalities are involved anymore thanks to the European customs-union.
2. Efficient transport with groupage
An experienced forwarder has a wide network of manufacturers and shipping companies and knows the local markets inside out. He will therefore ensure that all formalities are in order in the name of the client. He also negotiates prices and draws up the necessary contracts. A shipping company can be defined as a company that transports products via container ships. To load ships as efficiently as possible, forwarders use a specific technique, also known as ‘groupage’.
Groupage means that smaller shipments are combined in such a way that the space in a container is optimally used. Some kind of real-life Tetris, one could say. This way, importers can place relatively small orders and still benefit from bulk discounts. Manufacturers also benefit from this, as they can sell smaller batches more easily.
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3. A network of relationships
In addition to relationships with shipping companies and transport parties, a forwarder also knows where the client can store his/her goods as cost-efficiently as possible. Naturally, the importer wants to sell these products as quickly as possible, but this normally takes some time, especially for a starting seller. The primary task of a forwarding agent is to unburden the client. The labyrinth of laws and regulations, logistical planning and negotiations is quite overwhelming. A forwarder like Ademar has 39 years of experience with the most diverse types of cargo. Relieving the burden has become an easy task for the people of Ademar. As an SME or webshop owner, you can benefit from our expertise. Curious what we can do for you as a freight forwarder? Contact us by e-mail or telephone and we will be happy to help you with your questions.
