Choosing an international freight forwarder is crucial to any business that imports or exports cargo on an ongoing basis.
After all, your success depends on shipments arriving on time, not getting lost or damaged or stuck in customs. You need to meet or exceed your customers’ expectations with every order while controlling your costs.
Early in the selection process, you’ll need to thoroughly define your requirements for this key logistics partner. Eventually, you’ll need to formally communicate these requirements in a clear and concise manner in your RFQ (request for quote), but you’ll also need to be able to explain your requirements during discussions with the freight forwarders you’ve identified as possible partners in your initial research in preliminary evaluations.
What role(s) do you want a freight forwarder to play in your international transactions? Companies often rely on an international freight forwarder to handle some or all of the following twelve areas or responsibility:
- Assistance with freight quotes and costs of international shipping
- Providing a detailed itemized list of costs
- Booking space for freight on airliners, ships, trucks and other modes of transportation
- Providing shipper with all the foreign destination’s documentation requirements
- Preparing shipper’s documents, banking and other paperwork necessary in the transaction
- Processing shipping documents and handling all necessary certification and legalization procedures, as required
- Distribution of documents to necessary parties in the transaction (banks, offices, buyers, suppliers, etc.)
- Arranging for insurance coverage, if necessary
- Arranging for U.S. and/or foreign customs clearances and pre-shipment inspections, if necessary
- Providing facilities for warehousing at foreign destinations
- Providing information on hazardous materials, if needed
- Providing other specialized services, if needed
Here are eleven key points to consider when selecting an international freight forwarder:
- What services does the company offer globally?
- In which countries/regions are they strong? In which countries/regions are they weak?
- Do they have agents or foreign-owned facilities?
- Can they provide bonded warehousing facilities?
- Do they have international locations that can provide packing functions, such as JIT and pick-and-pack? What about administrative functions, such as invoicing?
- What is the company’s weekly tonnage to various foreign countries and specific cities in those countries?
- Are the company’s foreign offices as dependable as their local office?
- Are there any communications issues with foreign offices (language barriers)?
- Are they a member of C-TPAT (Customs Trade Partnership Against Terrorism)?
- Do they have experience with ATA Carnets?
- Do they have experience with temporary import bonds?
You can break the selection process down into a series of eight steps:
- Determine your requirements and communicate them in a clear and concise manner. Do this during preliminary meetings and do it formally in your RFQ.
- Research forwarders that interest you and appear to be a good fit. Compile data on each firm’s financial strength, coverage, number and location of offices, etc.
- Start early in your preparations for negotiations. Think in terms of total cost. Determine a target start date and set a timeframe.
- Get internal management buy-in. Make sure upper management will support the selection decision.
- Talk to and meet with the forwarders you target during your initial research. Explain your requirements to each and ask each forwarder what additional information they need from you during these preliminary discussions.
- Narrow your choices. Release RFQs to the forwarders that make it to your short list.
- Listen to the presentations from the forwarders on your short list. Schedule site visits with each.
- Negotiate the details. Make the best deal and choose the forwarder that is the best fit.
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