If you are a business owner and you are tapping into the booming e-commerce market, then a term that will have popped up in your research will be freight forwarding. What is this term and why does it apply to you? Is it something that you should be concerned with? Or can you continue to grow your business in e-commerce without it? There are a lot of questions that will come out of your mind. And this article aims to answer those questions. Take a closer look at freight forwarding and what it means for you and your business.
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Click on the topics that fit the information you need about freight forwarding service.
- What Is Freight Forwarding?
- What Do Freight Forwarding Companies Do?
- When Was Freight Forwarding First Established?
- Why Is Freight Forwarding so Strictly Regulated?
- Why Do I Need a Freight Forwarding Company?
- Are Freight Forwarders Responsible For Shipment Delays?
- Can a Freight Forwarder Advise Me on Which Goods Are Safe to Ship?
- How Many Stages Are Involved With the Freight Forwarding Process?
- What Are the Benefits of Working With a Freight Forwarding Company?
- Conclusion
- Frequently Asked Questions
What Does Freight Forwarding Mean?
Freight forwarding means moving goods in a supply chain or acting as an intermediary between you (the company with a shipment of goods) and the final destination for the said goods. While freight forwarding companies do not always necessarily carry the shipments themselves, they can provide different transport modes such as ocean freight, rail, road transport, and air freight shipments.
The majority of freight forwarding companies are also Authorised Economic Operators (AEOโs), which allows them to take full advantage of simplified customs clearance, particularly when it comes to deferred payment of important duties and any other charges which might otherwise need to be paid in full before any foods are released.
What is an AEO?
An Authorised Economic Operator (AEO) is defined by the World Customs Organization Framework of Standards to Secure and Facilitate Trade (WCO SAFE), as the party involved with the movement of goods internationally. This is in whatever function that has been approved on behalf ofโor byโa national customs administration. AEOโs are recognised as complying with WCO (or an equivalent supply chain security standard) and as such are afforded the appropriate trust and respect.
What Do Freight Forwarding Companies Do?
Most freight forwarding companies utilise their trusted contacts within their established network, with carriers and partners from air transport specialists, trucking companies, and transoceanic lines. It is usually a good result of doing freight bidding in the first place. They do this in order to negotiate the best possible price for moving your goods from point A to point B. This could be either using their established commercial routes with regular departures, or by charter.
In the Philippines, modern freight forwarding companies utilize the availability of technology to offer on-demand service using an application. One of the leading providers for this type of service is Transportify. Businesses and individuals can easily navigate the application and schedule deliveries going to leading destinations in the Philippines.
Valuing a variety of offers and opting for better routes that offer optimized speed, lower costs, and bolstered reliability are all things that freight forwarding companies should take into consideration when analyzing each new case in logistics.
Typically, a freight forwarding company will handle large volumes of shipments from one international destination to another. Thus, they are integral in triangular operations.
What are triangular operations?
Triangular operations contain at least three companies: the manufacturer, the intermediary/freight forwarder, and the final customer; each typically located in different countries. That said, there is a single delivery of goods, and a single transport.
This operation is complex from a documentation perspective, and of course, above all, tributary with any relevant value added tax (VAT) settlements.
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When Was Freight Forwarding First Established?
According to RedWood, one of the earliest ever freight forwarders recorded was Thomas Meadows and Company Limited of London. This was established in England, in 1836. Between then and now, the freight forwarding industry has come through leaps and bounds. In fact, the amount of parcels that are shipped globally each year is continuously increasing with high demand from different industries that adapt new practices in business.
In 2018 alone, 87 billion parcels were shipped worldwide. That was a 104% increase from 2014 and that number continues to grow year on year. Iโm sure Thomas Meadows had no idea at the time, just how massive the freight forwarding industry would become 185 years later.
Why Is Freight Forwarding so Strictly Regulated?
When you consider how much freight moves globally each year, itโs no wonder why it has to be strictly regulated. First and foremost, the strict regulations serve to function as a means of keeping operations as smooth as possible.
With so many shipments coming in and out of each country on a daily basis, there can be no room for error. The slightest hold-up can cause a terrible knock-on effect, affecting numerous parties and causing substantial losses in time and money.
But these strict guidelines and regulations are not just about keeping the machine well-oiled and running smoothly. It is also important to ensure that only legal goods are moved. Naturally, where organised crime is concerned, the 17 million shipping containers in circulation globally, making up to 200 million trips a year, are a prime target for illegal activities in the world.
Just like other freight companies, Transportify also applies different regulations in making sure that no illegal items will be transported and fraudulent activities are being detected by both the driver and internal team. Through strict regulation, automation and application of technological innovations in freight delivery, such illegal activities will become extremely difficult to hide and companies can make sure that this will not impede movement of goods for other customers.
In any case, without focusing too much on the doom and gloom, strict guidelines and regulations within the freight forwarding industry are designed to protect the customer, the manufacturer and distributor of goods, and the customersโ investments.
Why Do I Need a Freight Forwarding Company?
Again, as mentioned above, if you are growing your business and looking to branch out into the e-commerce industry and would like to move your goods either nationally or internationally, then a freight forwarding company will be a helpful ally to have.
While you are well within your rights to arrange all of the freight forwarding activities unsupervised, it would be difficult and will take up a lot of your time. The complexities and intricacies of shipping freight globally isnโt something that one can simply tap into.
Instead, working with an established freight forwarding company who deals with this day-in-day-out, with a solid network in place, is the simplest option. You can leverage their relationships and secure the best deals for moving your products around the market.
For businesses in the Philippines, one of the leading choices in the market is Transportify. They offer a wide range of vehicles from small sedans and MPVs, L300/Van, to trucks like Closed Van and Open Truck (2000kg). There are also much bigger trucks like Open Truck (7000kg), 6w Fwd Truck, and Wing Van designed to transport large amounts of goods over long distances. Learn more about Transportify vehicles and freight delivery rates in the table below:
| Vehicle Type | Dimensions/ Weight Limits | Base Price (Metro Manila) | Base Price (Outside Metro Manila) | Base Price (Visayas/Mindanao) |
|---|---|---|---|---|
 Wing Vanย | 32 to 40 x 7.8 x 7.8 ft 12000kg to 28000kg | 7000 PHP | 6500 PHP | 6500 PHP |
 6w Fwd Truck | 18 x 6 x 7 ft 7000kg | 4850 PHP | 4850 PHP | 4850 PHP |
 Closed Van | 10 to 14 x 6 x 6 ft 2000kg to 4000kg | 1600 PHP | 1450 PHP | 1450 PHP |
 Open Truck | 10 to 21 x 6 ft x open 2000kg and 7000kg | 2300 PHP | 1950 PHP | 1950 PHP |
 L300/Van | 8 x 4.5 x 4.5 ft 1000kg | 415 PHP | 330 PHP | 310 PHP |
 Small Pickup | 5 x 5 ft x open 1000kg | 310 PHP | 250 PHP | 220 PHP |
 Light Van | 5.5 x 3.8 x 3.8 ft 600kg | 250 PHP | 192 PHP | 225 PHP |
 MPV/SUV | 5 x 3.2 x 2.8 ft 200kg | 160 PHP | 130 PHP | 140 PHP |
 Sedan | 3.5 x 2 x 2.5 ft 200kg | 140 PHP | 110 PHP | 120 PHP |
Hiring a freight forwarding company is no different than hiring an accountant to take care of the books for you or an international arbitrator to help you settle a legal dispute. These companies will also help your business secure a good customer impression and ultimately provide retention and repeat business orders.
Are Freight Forwarders Responsible For Shipment Delays?
No, freight forwarding companies are not solely responsible for any delays in shipping. Typically, when a delay occurs, it is due to bad weather, port delays, a breakdown, or certain unforeseen route changes. While we recognize how frustrating shipping delays can be, it is important to remember that your freight forwarding company is not responsible; however, they will do everything in their power to resolve the issue for you as quickly as humanly possible. There are modern freight forwarding companies that already offer real-time information on the status of their shipment with the use of GPS technology. This is something that customers would want for deliveries since it gives them increased visibility of their freight transportation request.
Donโt worry because any freight forwarder will plan accordingly so as to minimize the chances of delays. But of course, there is only so much that can be done to prevent delays. When they happen (which is rare), there is little that can be done to stop it.
Can a Freight Forwarder Advise Me on Which Goods Are Safe to Ship?
Absolutely, simply ask your freight forwarding company and they can offer any advice needed. All logistics and delivery companies must follow local rules and regulations to safeguard the goods, driver-partnerโs lives and other valuable assets.
To give you an idea, here is a list of prohibited goods on a freight and cargo delivery company like Transportify:
- Live Animals
- Explosives
- Gases and Fuel
- Environmental and Human Waste
- Biological Substances
- Human Remains
- Prohibited Drugs
- Cash/Legal Tender
- Counterfeit Good and Merchandise
- Unregistered Medicine
- Precious Metals and Semi-precious Stones
- Protected Wildlife and Biodiversity
- Other Possible Contaminants
The majority of the prohibited items listed above are in line with the Philippinesโ law and regulations. These rules and regulations are in place to ensure that customers receive quality service and care on deliveries.
How Many Stages Are Involved With the Freight Forwarding Process?
There are six stages involved with freight forwarding. These processes are as follows:
1. Export haulage: the transfer of goods from the original source to the freight forwarders warehouse.
2. Export customs clearance: said goods receiving the official clearance to leave the country
3. Origin handling: unloading, inspecting, and validating the goods in accordance with the relevant documentation provided.
4. Import customs clearance: the relevant authorities will check the customs paperwork that accompanies your cargo.
5. Destination handling: Handling of the cargo once it arrives at the destination office and is then passed on to the important warehouse.
6. Import haulage: Moving the cargo from the import warehouse on to its final destination (also known as โ last mile delivery).
What Are the Benefits of Working With a Freight Forwarding Company?
There are many benefits to working with a freight forwarding company. For one thing, you donโt have to deal with the stress that comes with trying to navigate the complicated world of freight forwarding.
Here are some additional services that a freight forwarding company like Transportify can assist you with:
- A quality freight forwarding company can offer you industry expert advice on how best to optimise your transport costs (e.g., freight charges, marine transportation, and special documentation cost to name a few).
- In addition to that, a freight forwarding company can provide you with cargo insurance, including advantageous conditions with highly competitive premiums. Deliveries from Transportify are entitled to goods insurance coverage powered by OONA Insurance Philippines.
- Another great benefit is being advised on proper packaging, loading, and unloading of valuable merchandise. Depending on the vehicle that will be hired, freight deliveries from Transportify are entitled to a standard loading and unloading of goods from pickup point to destination.
- Help with reports, customer performance reports, and of course, your carbon footprint key performance indicators. Those businesses enrolled in the Corporate Account of Transportify may enjoy using dashboards that provide valuable data that can help with wise business decisions regarding their current logistics practices.
- The best freight forwarders can provide tailored solutions for your project and situation. Clients may request special handling of their goods, especially delicate ones that require extra care and attention.
- And finally, your freight forwarder can provide you with supply chain optimization advice regarding the best means of transportation, optimal routes according to the origin of the goods, the nature of your merchandise in question, the desired destinations, seasonality factors, potential dangers, and of course, the urgency of the merchandise.
Conclusion
Freight forwarding is a very delicate service to support. Businesses must make a wise choice in choosing the provider that will fulfill their logistics needs. We could harp on about freight forwarding all day, given the depth and complexity of the service. If you still have questions after reading this article, then please do not hesitate to contact us today. At Transportify, we take great pride in offering a simple, transparent, and efficient service.
Start using Transportify by downloading the application using the QR Code or buttons below:
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How do freight forwarding companies transform business operations?
๐ Freight forwarding companies help many businesses to easily process and fulfill their delivery requests with smooth handling and flawless documentation. A major benefit of hiring a reliable freight delivery company is increased revenues due to improved productivity and operating margins.
Where can I avail freight forwarding services in the Philippines?
๐ There are a lot of freight forwarding services available in the Philippine market. You may look for a service using online listing platforms like Carousell and Facebook Marketplace. But if you or your business is looking for the most trusted and affordable provider, try to schedule delivery services with Transportify. This company is one of the modern freight trucking companies that is very easy to use. You just need to download the application and start booking for small vehicles and big trucks for heavy loads.
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