Freight Forwarder : Managing risk in the supply chain

This article published on the Gov.UK website back in August 2012 and updated in June 2013 discusses freight forwarder responsibilities and liabilities and is a very interesting read, both for freight forwarder’s and also for shippers who need to understand the role a freight forwarder plays in their supply chain.

Aircraft flying The article is split down into several sections and is a fairly comprehensive summary :

  • Overview of Freight Forwarder’s responsibilities
  • Trading conditions and limiting liability for freight forwarders
  • Freight agents : avoiding the risk of customs civil penalties when arranging exports
  • Types of insurance for freight forwarders
  • International Trade Finance
  • Managing the risks of freight forwarding
  • International commercial terms for freight forwarders

Choosing the right freight forwarding company

Choosing the right freight forwarder for your business is easy, put out a quote and whoever is cheapest wins the contract, Right?.  Surely there is a lot more to ensuring your goods move smoothly than price.  When you get up and go to work do you choose your mode of transport on what is the cheapest or do you choose something you are comfortable with and believe will get the job done how you want it done.  If you drive a car rather than use public transport or cycle what made you choose that option?.

In order that a freight forwarder can fully train there staff and fully understand the rules and regulations governing the laws on importing and exporting to and from the countries you want to trade with it is essential that the freight forwarder company has a good understanding of the whole process.

Why is your freight forwarder the cheapest

It is easy for the freight forwarder to continuously cut margins in order that he can win business based on price.  Ultimately what is at risk is the safety and security of the supply chain if corners end up being cut or the quality of the supplier, whether it be Trucking company, airline or shipping line.  Shipping lines skip ports, Airlines overbook their flights,  European trucking companies overfill trucks and leave cargo behind.

Good Freight Forwarder practices

Good freight forwarders monitor this and change suppliers in order that they minimise the risk but are hampered in doing this if they are winning on a cost only basis.

The article above published on the website covers the mere basics of what a freight forwarder should provide along with information on how the freight forwarder ensure’s he is fully protected from a claim for loss or damage of cargo using trading terms and conditions and international laws per mode of transport.

The greatest protection a freight forwarder can have though is fully trained, highly motivated and knowledgeable staff who are eager to look at the supply chain the customer is requesting and build there services around the customers expectations whilst providing guidance if he feels those expectations are unrealistic at the price point requested.

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