As a new business, you’re perhaps still learning the ropes on how you ship goods from overseas markets to a 3PL warehouse. You’re maybe still in the process of trying to find the perfect 3PL that can effectively ship and store your products. But importing (and exporting) goods is frequently a complicated process involving protracted steps and exorbitant fees.
No business should attempt to take on all the paperwork and regulations alone when importing goods becomes necessary. Fortunately, you’ll discover most businesses use a process called freight forwarding to take care of the above complex procedures.
With international exporting and importing a major part of business today, you need to know what a freight forwarder is. In addition, you should know their process, including what occurs through customs clearance and drayage from the port to the warehouse.
Let’s take a look at how you can define a freight forwarder and how to find a quality one.
Defining What a Freight Forwarder Does
You’ll find a lot of lengthy explanations online for what a freight forwarder does, yet you can basically define it as an intermediary who arranges the importing or exporting of your goods for a fee.
One thing they don’t do is actually do the transporting of goods. They work closely with those who provide transportation, including ocean cargo shippers, truckers, air freighters, and rail services.
All of these have complex fees involved in the moving of goods to your warehouse. A freight forwarder works as your advocate to negotiate better prices on the transportation. They do this through a bidding process so you can get the best possible price out of numerous transportation choices.
The operative word is “organizes”. The freight forwarder doesn’t actually move the goods but handles the logistics of their movement. This involves relationships with various shippers, by land (trucks and railroads), air and water. Any movement may involve multiple modes and shippers. Freight forwarding includes all associated paperwork, including data collection, and for international shipments, preparing and processing customs. Freight forwarders also have expertise in regulations and legal issues.
Specific papers a freight forwarder reviews on international shipments include commercial invoices, the shipper’s export declaration, the bill of lading and other documents required by the carrier or country of export or import. The work of the freight forwarder doesn’t end when a shipment enters the country. Drayage refers to picking up an ocean container from the port or rail ramp, delivering it to the 3PL warehouse, and returning the container.
While this is a general overview, you should learn about each procedure in detail and how much knowledge the best freight forwarders have to make importing simpler.
Working with an experienced freight forwarding service helps you navigate the frequently complex steps involved in customs clearance. They understand import documentation, which frequently involves handling the purchase order of the buyer, the sales invoice of the supplier, the bill of entry, and the bill of lading.
The forwarder also needs to deal with the packing list, and certificate of origin. However, this is frequently just the start because different regulations from the importer, or financial institutions, can complicate documentation further.
Sometimes businesses go through customs brokers to handle the customs clearance processes. Nevertheless, freight forwarders with extensive experience should already know the details.
It works easier when you properly communicate information to your freight forwarder. The importer needs to make sure their shipping containers are properly loaded. Also, be sure to provide accurate paperwork to your freight forwarder so there aren’t any mistakes.
Drayage from the Port
If you’re still unfamiliar with the term drayage, it means trucking service transporting your goods from a port to another destination. In your case, it could mean transporting directly to your 3PL warehouse in another part of the country.
Many freight forwarders work near ports, and they’ll negotiate the fees involved with those transportation services. It doesn’t always mean trucking services and can often mean negotiating prices with rail services or air freight.
Thanks to a freight forwarder’s knowledge of pricing in this industry, they’ll know which price is the best for you. Their experience also tackles complicated banking procedures involved with payment to importers.
Useful Freight Forwarding Terminology
The following list isn’t exhaustive but provides a few basic terms to assist as you consider whether to handle freight forwarding internally or delegate it to a third-party.
3461: U.S. Customs and Border Protection Application for Entry/Immediate Delivery. This form details the content of cargoes entering the U.S.
BOL: Bill of Lading. The carrier issues this document and provides details of a shipment.
Customs Status: Customs Clearance status on a shipment, required before release into the U.S.
Drayage: Picking up an ocean container from the port or rail ramp and returning the empty container.
OBL: Ocean Bill of Lading, used by a steamship line to show receipt of cargo and associated details.
OBL status: Steamship lines require payment before releasing cargoes.
POD: Proof of Delivery. Used by carrier to show that cargo delivery.
Finding the Right Freight Forwarder
You can find various sources online that help you track down the best freight forwarders across the United States or abroad. What you’ll appreciate is that many of them charge modest rates, even though this can vary depending on their expertise.
Before you get to this point, you’ll need to find a 3PL warehouse first. We can help you find the right one with our reliable vetting resources here at 3PLCompanies.net.
Contact us to learn more about what to look for in 3PL’s and in freight forwarders, both of whom need to work in tandem.