Logistics Industry in India is witnessing an evident boom. As per the ASSOCHAM, National Logistics Summit 2016, Logistics Industry is expected to grow at a CAGR of 13.5% by 2020. The expected worth of the sector has been estimated to be US$ 307.70 Billion. Such a growth can be attributed to the manifold increase in the FMCG, e-commerce, manufacturing and retail sectors. Under such a scenario what is the role of a freight forwarder?
A Freight Forwarder is a firm that arranges for the movement of goods from one country to the other. In simple words, a Freight Forwarder is someone who facilitates the export and import of goods from the country of origin to the destination country. You may refer to a Freight Forwarder as a vendor who takes care of a plethora of activities that not only facilitate the movement of the goods but also enable value addition in the freight life-cycle.
So, why do we need a Freight Forwarder?
1. Hassle free movement of goods.
A Freight Forwarder is well versed in the logistics requirements of various countries and enjoys the benefits of established relationships with numerous carriers. They take care of all documentary requirements for the movement, custom clearance, arranging carriers for your goods, booking cargo space, negotiating freight charges et al. Basically, once a Freight Forwarder is in the picture you may sit back and relax while your goods traverse across the globe to various destinations.
2. Guaranteed best rates
Freight Forwarders ace the negotiation game and are the masters of the trade. With established relationships with carriers, a freight forwarder will always get you the best rates in the market. A freight forwarder can always leverage high volume of goods to reduce costs of transportation.
Consolidation of goods is one of the major reasons why the transportation costs are reduced considerably. Consolidation is simply the act of combining smaller shipments to make one large shipment. Greater the volume of the goods lesser the amount you pay for transportation.
4. Route Optimization
As a part of an extensive international trade network Freight Forwarders are capable of advising on the optimum route selection for the movement of your goods thereby reducing the transit time as well transportation costs. When forwarders book cargo space for customers, they have the flexibility to choose the best routes and transit schedules depending upon the customer’s requirements.
Cargo Insurance is an infallible method to secure your goods. Freight Forwarders provide insurance to protect your goods from any physical loss or damage while shipping whether by land, ocean or air.
6. Inventory Management
Freight Forwarders can provide storage, handling, packaging and distribution of the goods all at one go as and when required. Most freight forwarders are well equipped with warehouses not just for the storage of goods but also for efficient handling of goods, sorting, packaging facilities such as palletization, strapping, shrink and stretch wrapping, labelling as well as reverse logistics.
With the given expertise in this domain, agility is one of the characteristic properties of a Freight Forwarder. Under unforeseen situations, a Freight Forwarder is always prepared to handle an emergency. For instance, a shipment is rerouted to a different port due to some natural calamity or the shipment faces delay due to offloading by a carrier during its transhipment at a certain port. Such challenging scenarios can be handled with much ease given the established resources of a Freight Forwarder.
Freight forwarders are primarily zero-asset based companies, i.e. they do not own a fleet of carriers such as aircraft, ships etc. However, they are your best bid if you want effective solutions to your logistics woes. Forwarders essentially have service contracts with multiple air and ocean carriers to facilitate economical shipping around the globe. They are also your best friend to seek advice regarding an optimum mix of routes and transit schedules as per your requirement. Freight Forwarding is a multi-faceted industry that covers a spectrum of services such as booking cargo space, preparing shipping documents, offering assistance in logistics and supply chain management, freight consolidation, customs brokerage, packaging, warehousing, distribution, cargo insurance and other value-added services. With such a gamut of services and more at their disposal, a freight forwarder can truly be your knight in shining armour.
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