Shipping goods from overseas can be scary and challenging considering the potential risks. Goods could get lost or stolen during transit, or even suffer damage. Luckily, there are professionals for everything.
Have you ever heard of the term “freight forwarder”? These are people who are experts at shipping and delivering goods to their recipients. In this article, we shall take a comprehensive look at how to source the best freight forwarder for Amazon FBA.
You no longer have to go through the task alone.
Table of Contents
1. What Is A Freight Forwarder and what is their role?
2. Why Should You Use A Freight Forwarder?
3. What You Can Get From a Freight Forwarder
4. How Do Freight Forwarders Charge For Their Services?
5. What Phases are Involved During Freight Forwarding?
6. What Documents Should A Freight Forwarder Provide?
7. About Amazon Freight Forwarders & Hand Carry
8. About Customs, Duties, and Taxes
9. Best Amazon FBA Freight Forwarder: A step-by-step guide for the process!
10. Desired outcome
11. Final Thoughts
What Is A Freight Forwarder And What Is Their Role?
A freight forwarder is an individual who organizes shipments for a company, individual, or organization from manufacturers to consumers. They act as intermediaries between the companies making the goods and the consumers who buy the products.
They provide services such as:
• Cargo insurance
• Advice on optimizing costs such as transportation
• Handling all documentation matters
• Booking consignments
The best Amazon FBA freight forwarders usually cover logistics and use various shipping modes such as ships, airplanes, and trucks. They ensure consignments reach their destinations.
The role of a freight forwarder
As a middleman between manufacturers and consumers, freight forwarders handle a variety of roles, such as:
1. Offering advice to their clients
Freight forwarders are responsible for providing professional advice to shippers. It may include insight on issues such as banking practices, transportation costs, and shipping regulations.
It’s their responsibility to inform their clients of the potential risks and pitfalls involved in the process.
2. Packaging, storage, and distribution
Before shipping any goods, freight forwarders should ensure they have taken care of issues such as how the goods are packaged, where they will be stored before transportation, and how they will reach their respective owners.
Freight forwarders make insurance arrangements for their customers, at a fee, of course. These professionals advise their clients on the importance of insuring their merchandise to protect against any foreseeable risks.
4. Handling documentation
Freight forwarders handle most legal processes that handle documentation, such as customs and letters of credit.
5. Offering advice on legislation
Freight forwarders advise exporters on matters such as political unrest and international trade laws. Their role is to ensure their clients are fully aware of the factors affecting transportation.
Why Should You Use A Freight Forwarder?
Still not sure whether to get help sourcing products from overseas or to do it yourself? Here are four reasons why you should use a freight forwarder.
• They provide additional services besides shipping.
Freight forwarders additional services such as packaging, storage, and provision of insurance.
• Peace of mind
Hiring a freight forwarder ensures you can relax and wait for your shipment to arrive without having to worry about transportation or customs.
• They handle all problems and potential risks.
Freight forwarders usually anticipate and provide solutions and backup plans in case of any inconveniences.
• They have exceptional customer service.
Professional freight forwarders know the value of customer service and go out of their way to ensure their clients get the best experience.
• They reduce the number of contracts.
Handling shipping on your own often requires you to sign multiple contracts for the involved processes.
Hiring a freight forwarder provides a much more convenient alternative by reducing the contracts to just one; between the freight forwarder and the client.
HOW TO CHOOSE THE BEST AMAZON FBA FREIGHT FORWARDER
Here are some factors to consider when looking for a freight forwarder.
An experienced freight forwarder not only gives you confidence in their services but they provide solutions for the various risks and issues that may arise.
B. Range of services
When looking for a freight forwarder, check for the additional services they provide, such as:
• Inventory management
C. Customer service
Customer service is an essential aspect of freight forwarding, just like in all other businesses. Look for one with exceptional customer service with fast and responsive channels of communication.
When looking for a freight forwarder, always ask to see their certificates and credentials. The industry is riddled with scam artists looking for their next victims.
An excellent way to avoid them is to look for a credible and reliable freight forwarder. Remember to ask for references, too; these are a perfect way to check their experience and expertise.
E. Your goals or expected outcome
Are they in line with your requirements? Do they tick all the boxes in your list of qualities? Can they provide the service you need within the specified time? These are examples of guiding questions you should consider when searching for a freight forwarder.
F. Financial Stability
Research your potential candidates to ensure they are financially stable; make sure they have the means to deliver what you ask for.
Don’t be afraid to ask questions. You are putting a lot on the line by choosing their services, so you must make sure they can deliver.
What You Can Get From a Freight Forwarder
Hiring a freight forwarder provides benefits such as:
• They provide timely delivery and pickup
Too many times, products get lost while in transit or even during distribution. Freight forwarders make sure clients get their consignments in good shape and on time.
• They reduce the hassle involved in shipping products.
Shipping goods can be quite a challenging process. You need to have the correct paperwork, transport the goods, among many other challenging procedures.
Hiring a freight forwarder saves you this hassle; simply sit back and let them do their job.
• They are cost-effective
Transporting small consignments at a time can be rather stressful. Consolidating them into one significant shipment cuts back on unnecessary expenses.
One of the advantages of hiring a freight forwarder is security. You can rest with the assurance that your package is in safe hands.
With cautionary measures such as tracking and documentation, they make sure your cargo is safe from getting lost, stolen, or damaged.
Many freight forwarders often provide storage services besides transportation. They use warehouses and provide inventory management to keep your goods safe and safely stored.
• Inventory management
Inventory management counts among the additional services freight forwarders offer. The service provides efficient tracking and management of client cargo, preventing inconveniences such as getting lost or stolen.
Freight forwarders offer various services besides shipping cargo making them versatile, an instrumental quality within the transport industry.
Having a versatile freight forwarder means you get more time to focus on your business. Their experience and industry knowledge equips them to solve issues better as they appear.
• They handle documentation and customs.
A trusted freight forwarding service provider ensures they always have the proper documentation ready; shipping overseas can be rather tedious, especially dealing with legal aspects.
They save you the grueling task of dealing with documentation by ensuring it’s updated and within the legal guidelines.
How Do Freight Forwarders Charge For Their Services?
When shipping products overseas, it’s vital that you understand how the procedure works and the costs involved. Here is a breakdown of how much it will cost you to hire a freight forwarder.
I. Custom Examination Fees
Customs usually subject cargo to rigorous examination, especially potentially dangerous cargo. They are random sometimes, adding an extra cost.
II. Custom Duties
Custom Duty is a tax imposed on the export or import of goods. The rates may be specific or dependent on the value of goods.
Demurrage is a fee levied on cargo that stays too long at a port. Authorities allow shipments to remain at the destination port for four to seven days. Once the grace period is over, you may start to incur demurrage.
Cargo insurance is charged separately, so always make sure to ask your freight forwarder about this cost. It should cover the products from origin to destination.
V. Container costs
Containers depend on the size. The size ranges from:
• 20-foot equivalent (TEU)
• 40-foot equivalent (FEU)
VI. Documentation fees
When consulting with your freight forwarding service, enquire whether document fees are included in the overall cost, or they’re charged separately. It will save you from extra expenses.
VII. Container management fees
Companies have begun charging management fees to cater to the operational cost.
FACTORS INFLUENCING FREIGHT FORWARDING COSTS
Fuel prices are prone to fluctuation, incurring additional costs that you may not have prepared for. When fuel prices go up, shipping prices also go up. The reverse also applies.
II. Increased demand
An increase in shipping demand increases shipping prices. When too many customers want the same service/good, manufacturers resort to raising prices to meet operational costs.
Freight forwarding costs largely depend on the capacity of the shipping vessels. Using multiple trucks to transport cargo means you pay more; a good way to solve this is by using large capacity vehicles; that way, you can haul more cargo without adding any extra costs.
IV. Distance covered
The further the destination is from the shipping location, the more expensive the freight forwarding costs.
V. Weight of the cargo
Weight is an important factor in freight forwarding. It all depends on various freight groups under which shipments are categorized.
When a consignment’s weight goes past a specific limit, it moves on to a different freight group.
VI. Government regulations
Different states have different regulations meaning it’s the freight forwarder’s responsibility to keep abreast of any changes in rules or legislation.
What Phases Are Involved During Freight Forwarding?
There are six primary stages to the freight forwarding process:
A. Export Haulage
Export haulage simply means transferring shipments from the shipping location to the freight forwarder’s warehouse. The goods mainly move by trucks or train.
The Export haulage process typically lasts a few hours to weeks; it depends on geographical location and transport means.
B. Items checkpoint
This stage involves cross-checking and confirming goods after reaching the warehouse location.
C. Exports custom clearance
Here customs officials from the export country submit the necessary details and documentation to clear the cargo.
Freight forwarders work hand in hand with customs brokers to ensure the consignment is within the legal requirements.
D. Imports custom clearance
After export custom clearance, freight forwarders pass their shipment through import customs. This process ensures that the products are legally allowed to be in the destination country.
E. Destination arrival and handling
In this stage, freight forwarders take care of all documentation.
F. Import haulage
The last stage of the freight forwarding process involves transporting the cargo from the warehouse to the recipient.
What Documents Should A Freight Forwarder Provide?
Freight forwarding is a rather long and tedious process involving lots of steps and documentation. Examples of the paperwork required include:
I. Proforma invoice
The freight forwarder prepares a proforma invoice before exporting cargo to inform the client of specifications such as value.
II. Commercial invoice
This document is a bill sent to the client for services provided; it’s vital because government officials often use it to assess customs duties.
III. Packing list
An export packing list provides more details than regular ones. It identifies items along with their net and gross weight. It’s also used when preparing a bill of lading.
IV. Bill of lading
A bill of lading is a contract used as a proof of ownership that is signed between a freight forwarder and their client.
V. Warehouse receipt
This shipping document proves that goods have been transported and received in good shape.
VI. Export licenses
These are government documents that authorize the movement of goods out of the country.
VII. Import licenses
An import license is a piece of paper that proves that freight forwarders have the authorization to bring cargo into the country.
VIII. Insurance certificate
Freight forwarders receive this document once they purchase insurance cover for shipments. It covers any liabilities that may arise during the freight forwarding process.
About Amazon Freight Forwarders & Hand Carry
When using freight forwarders, it’s essential that you go through Amazon’s terms and conditions. Some of the rules and regulations include:
• Amazon is not responsible for any damage, defect, or loss that happens to goods once delivered. This means that Amazon won’t offer any refunds or replacements.
• As the exporter (you or the freight forwarder), you are responsible for complying with the destination country’s export and import regulations.
• You cannot export any products without Amazon’s written authorization if you don’t have an American address.
• Amazon shall not be mentioned in any official paperwork such as invoices or packing lists.
About Customs, Duties, and Taxes
When selecting the best freight forwarder for amazon FBA, make sure you familiarize yourself with Amazon’s guidelines on customs and taxes.
When using Amazon’s services, the receiver of the goods takes the role of the importer. Therefore, they should comply with the regulations of the destination.
Orders that are shipped outside of the USA may be subject to import taxes, custom duties, and fees levied by the country of destination. The recipient of the products is liable to pay for these expenses along with any additional costs.
Best Amazon FBA Freight Forwarder: A Step-By-Step Guide For The Process!
Below is a step-by-step guide to finding the best freight forwarder amazon FBA.
INVESTIGATE IMPORTING RESTRICTIONS ON YOUR PRODUCT
Different countries have different limits when it comes to importing products to ensure safety and quality. When choosing a freight forwarder, ensure they are familiar with the government policies to prevent any liabilities or run-ins with the law.
TEST THE PRODUCT WITH A SMALL SHIPMENT
An excellent way to gauge the efficiency of a freight forwarding service is to do a test run using a small shipment. This way, you can assess qualities such as cost-effectiveness, flexibility, turn-around time, and the range of services they offer.
PICK THE RIGHT INCOTERM FOR YOU: EXW, FCA, OR FOB
Incoterms can be confusing, especially for first-time freight forwarders. Before we begin, let’s first define an incoterm.
Incoterms refer to a set of rules that guide trade and the sale of goods. It’s an abbreviation for International Commercial Terms. EXW, FCA, and FOB are all examples of incoterms.
EXW, short for Ex Works, means the buyer bears all the risks and costs of shipping a product, starting from sourcing it and ending at delivery. They are responsible for all the processes in between that time frame.
With a Free Carrier, the seller will be responsible for delivering the goods to a named location, which could be a port or a terminal. Once delivered, the buyer takes over transporting and all processes going forward.
Free on Board dictates that the seller ferries the cargo to the port and ensures it has an appropriate transport means. Simply put, it refers to port-to-door shipment.
However, once the consignment is aboard the transport vessel, the buyer takes over the expenses, including ocean freight and subsequent costs.
HOW TO SHIP: BEST PRACTICES
• Familiarize yourself with docking restrictions for cargo origin and destination
• Offer reasonable shipping rates to clients.
• Understand your shipping data
• It prevents inconveniences such as late shipments.
• Get insurance: anything can go wrong, so it’s always a great idea to get insurance to cover any potential pitfalls.
CALCULATE LANDED COSTS
Landed cost is the total charge that covers the transporting cargo to its destination. It refers to the cost of shipping and additional taxes and fees. Expenses included in the landed cost include:
• Currency conversion
• Storage of goods
• Regulatory fees, including export licenses
• Fraud prevention
Calculating your landed costs brings clarity allowing you to assess your business performance. It enables you to calculate whether you will make a profit and if your business is sustainable.
CHECK OUT THE PACKAGING
Once they are in the warehouse, a thorough inspection of goods is crucial as inventory management allows you to identify faulty, damaged products and replace them before transporting them to the destination.
EXPERT HELP: GOING FORWARD(ER) NOT BACKWARD
As the saying goes, ”when in doubt, ask,” consulting with professionals when faced with challenges is a wise move. It saves you the hassle of looking for solutions on your own.
WITH FREIGHT, SHIP HAPPENS!
Accidents happen, people may make mistakes. Fortunately, the insurance cover cushions you from most of the blow. By getting insurance, you avoid incurring losses by paying for additional expenses from your pocket.
HOW FREIGHT QUOTATIONS WORK
A freight quotation is a document indicating all the expenses incurred when shipping a product from one point to another. When looking for the best Amazon FBA freight service, compare quotations from different shippers.
It should contain the following information:
• Where your cargo is getting shipped to and where it came from
• The equipment and transport mode
• Shipment details such as dimensions and weight
COMPREHENSIVE CARGO INSURANCE
Getting cargo insurance covers you from all risks of losses such as physical damage, theft, fire, non-delivery, customs rejection, and cargo abandonment.
There are two types of cargo insurance:
• Marine cargo insurance covering transportation either by sea or air.
• Land cargo insurance covers all land transportation.
PAPERWORK. LOTS OF IT. BE CAREFUL CHECKING
Cross-examine your documents throughout the shipping process. It will guard you against loss and other inconveniences such as customs rejection. These include:
• Export licenses
• Bill of lading
• Commercial invoice.
GET THE RIGHT CUSTOMS BOND
A customs bond is a contract between customs, a principal, and an importer. It acts as a guarantee between the three parties.
Freight forwarders require this contract to import and export cargo. They can get one from a customs broker or any reliable company.
BAKE IN SOME BUFFER TIME
Buffer time is extra time added to the duration of service. It’s a way of planning for the unexpected.
By giving your shipment buffer time, you give your freight forwarder allowance to settle all issues before delivery.
Hiring a freight forwarder gives you peace of mind, knowing that your goods are in the hands of a professional.
Your products are sure to arrive within the stipulated time and in good condition. They also safeguard your business against any extra expenses and risks.
Looking for the best Amazon FBA freight forwarder can be a long and detailed process. Fortunately, this article gives an in-depth guide on how to select only the best.
The right freight forwarder not only guards you against any potential risks but also saves you money and offers professional advice on how to optimize your business. Their flexibility allows them to adapt to all situations and look for sustainable solutions for any problems.