9 Key Services for Freight Forwarders to Grow

Freight forwarders can choose to implement some or perhaps all of the options mentioned below to serve more customers.

Air Freight: This is the fastest mode of transportation, operating at speeds several times faster than other methods. It is highly secure, making it ideal for valuable cargo where both speed and security are essential. Additionally, air freight is often used for electronics, perishables, critical spare parts, and artworks due to their need for quick and secure transport. However, air freight does have a considerable environmental impact. The use of drones for delivery is anticipated to increase significantly in the near future, particularly for last-mile transport.

Sea Freight: This mode of transport provides a cost-effective solution for handling commodities with large weight and volume. Specialized ships, such as RoRo (Roll-on/Roll-off) vessels, are designed to transport vehicles and trucks. Due to potential risks such as rough weather, it is highly recommended to have insurance coverage for sea freight shipments. Approximately 80% of global freight is transported by sea!

Land Freight: Known for its door-to-door service, as the famous saying goes, "If you got it, a truck brought it." Land freight, particularly rail, can be faster than sea freight, especially when transporting goods from Asia to Europe. Trucking offers more flexible scheduling compared to both sea and air, fulfilling many shipping needs.

Insurance: Carrier liability is often limited, so obtaining insurance is crucial to protect the shipper’s cargo, especially if it's valuable. In air freight, valuation charges can be applied to increase the carrier's liability. Freight insurance varies from maximum to minimum coverage, as defined by the Institute Cargo Clauses A, B, and C. The concept of General Average, where some cargo may be jettisoned to save the ship, is covered under these clauses. Without insurance, the shipper may be required, in the case of general average, to pay extra costs, even if his or her goods arrive undamaged. Typically, freight insurance does not cover inherent vice or inadequate packaging.

Customs Clearance: Essential documents for customs clearance include the commercial invoice, import and export licenses, and the certificate of origin. Goods are classified using the international HS code to determine applicable duties and regulations. Some countries offer pre-clearance services to expedite the process, and many cooperate through free trade agreements to facilitate smoother trade and reduced tariffs.

Consolidation: This can be highly profitable for freight forwarders as it increases profit by transporting higher weights and combining high-density cargo with low-density cargo. The essence of consolidation involves collecting multiple shipments from various shippers heading to the same or nearby destinations. This process typically occurs in LCL (Less-than-Container Load) and LTL (Less-than-Truckload) transactions.

Warehousing: Warehousing plays a crucial role in consolidation by facilitating the merging and separation of shipments. Cross-docking warehouses enhance the supply chain by minimizing or eliminating storage time, accelerating the movement of goods. Advances in technology have significantly improved warehousing operations, with the implementation of Warehouse Management Systems (WMS), augmented reality tools, and RFID for more efficient inventory management. Additionally, the strategic location of a warehouse is vital for optimizing logistics and ensuring timely delivery.

 Project Cargo: Project cargo can be highly profitable for freight forwarders but demands specialized expertise. It involves transporting goods from multiple global locations over extended periods to support specific projects. This type of cargo often requires multi-modal or intermodal transport, utilizing various modes of transportation including air, sea, and land, to efficiently complete the logistics of the project.

Dangerous goods: The International Maritime Organization (IMO) and the International Air Transport Association (IATA) oversee the regulations for shipping dangerous goods. These goods are categorized into nine classes, each with specific packaging requirements and often subjected to tests like drop and stack tests to ensure safety. Proper labeling, marking, and documentation are crucial. Key documents include the Safety Data Sheet (SDS), which provides detailed information on emergency procedures. Adequate staff training is essential to prevent mishandling, which can lead to serious consequences such as fines or even imprisonment!