What to Look for When Choosing a Freight Forwarding Company
The success of your international freight operations can depend heavily on the freight forwarder you choose. Choose the wrong one, and you’ll be dealing with delayed shipments, increased freight costs and compliance issues that no one wants to deal with. Choose the right one? Everything works as it should.
Yet most businesses don’t know what to look for in the first place. They go with the lowest quote or the first one that responds to their request. This often backfires after a few shipments.
Expertise That Counts
There’s a difference between experience and experience that counts. A company that’s been working only with domestic trucking for twenty years won’t get your containers from Shanghai to Houston. Instead, you need to look for companies that have experience within your shipping lane and internationally.
For example, some freight forwarders only work between Asia and North America, while others focus on Europe and the Middle East. These are two different groups of carriers, each with different regulations and timing requirements, which means that these freight forwarders have established relationships with steamship lines, understand where port congestion will occur and know which customs agents require stricter adherence to paperwork requirements.
Industry experience is critical too. For example, pharmaceuticals require temperature-controlled boxes and different documentation than machinery parts in bulk. Hazardous materials require different certifications and compliance issues. If a freight forwarder has never worked with your product type before, they’ll be learning on your dime – and your timeline.
Licensure and Compliance Standards
Much of this is technical, but it’s important. Freight forwarding companies should have licensure to operate from governing bodies, at least in the United States where the Federal Maritime Commission licenses ocean freight and International Air Transport Association accreditation facilitates air freight.
However, licensure is more than basic accreditation. C-TPAT certification means that a freight forwarding company takes security seriously, meaning their established procedures will expedite customs clearance. Conversely, ISO certifications mean that companies have standardized quality management systems in place. These standards are not arbitrary or just used for internet marketing; they have bearing on how your cargo is operated on.
When assessing potential international partners, ask for current certifications and licensure. Expired credentials or vague answers about “waiting” on certifications are red flags. Legitimate companies keep this documentation updated and easy to find.
Customs brokerage capabilities should be scrutinized as well. Some freight forwarders use in-house customs brokers. Others outsource this process to third parties. This adds another communication step and potential delays. In-house customs knowledge more quickly resolves problems when there are issues with documentation – which there inevitably will be.
Technology Capabilities and Tracking Systems
Freight forwarding relies on technology – or at least it should. Gone are the days of phone calls and faxed bills of lading; instead, if a freight forwarder doesn’t have the means to track where cargo is when and what’s going on with it, you might want to reconsider your choice.
See what kind of tracking capabilities they have – can you log into a system where you can see where your cargo is at any time? Will you receive automatic updates upon key metrics? Or will you learn about issues that delayed your cargo three days after they occur?
Technology also needs to be integrated if you use your own systems. If your business has its own inventory management systems or enterprise resource planning systems, the freight forwarder’s technology should mesh with yours; manual entry between platforms equals delays and information inconsistencies that no one needs.
Document management systems further complicate the issue – international shipping brings tons of documents; commercial invoices, packing lists, certificates of origin, bills of lading. Good freight forwarders will provide document management that keeps everything in order without future miscommunications; bad ones will email you PDF scans that you’ll spend hours trying to dig up later.
Customer Service and Communication
This point may seem trivial, but communication issues derail more freight forwarding relationships than anything else. The best price means little if you can’t get anyone on the phone when customs holds your shipment hostage for additional paperwork.
Test responsiveness pre-contract by sending an inquiry at various times throughout the day; see how quickly they respond to questions and how in-depth their answers are. If they’re slow or respond without much detail now, they’ll be doing so when you’re a paid customer too.
Ask about account management. Will you have a designated contact who knows your business? Or will you get whoever answers the phone when you call? Consistent communication makes it easier for an account manager to learn your requirements, nuances of your product and anticipated concerns.
Language abilities count more than people realize; shipping from countries where English isn’t a business language means that freight forwarders’ staff members should be multilingual to avoid miscommunication that results in documentation mistakes or delays.
Financial Stability and Insurance
Freight forwarders deal with big money and big assets; their financial stability impacts yours. Freight forwarders may cut insurance amounts or delay payment to carriers if they’re financially strapped – which stalls your shipments; some even go out of business mid-shipment.
Request references from clients still using their services after three or more years – they’re either happy with their services or loyal for financial gain. Ask specifically about payment terms and claims submissions when something’s damaged or lost in transit.
Insurance requirements should also be outlined in more detail than just what’s included; some freight forwarders provide limited coverage or no exclusions; others provide comprehensive standards because they have internal claims processes that work.
Network and Carrier Relationships
Freight forwarders who have solid relationships with carriers mean good things for those of us who need cheaper quotes too since they have bulk commitments that help lower costs. They also know people who can expedite urgent shipments or figure out capacity when it’s an especially busy time of year.
Ask who their preferred carriers are; do they work exclusively with only a few steamship lines and airlines? Or do they know many? Flexibility means they’ll route based on what’s best for what’s being shipped instead of needing to push certain caravans because they signed an agreement with them.
Their agents in countries of arrival are also critical – great freight forwarders have good partners on the destination side – customs clearance, local delivery, problem-solving. Freight forwarders who are less successful have poor agents on this side who hold everything up once it’s arrived in-country anyway.
Making Your Choice
Choosing a freight forwarder isn’t merely checking boxes. The relationship must work for your needs – even if it’s perfect for a large manufacturer shipping containers every week, it could be all wrong for a small business only sending pallets occasionally.
Get everything in writing – service level agreements, documented customer service expectations, pricing arrangements, liability items should all be laid out clearly to avoid ambiguity post-shipment should something go wrong.
The right freight forwarding partner can be a strategic partner making international shipping logistics comprehensible instead of complicated all the time. Taking time to assess potential partners saves time, leading to more organized operations, fewer unexpected surprises – and controlled costs. That’s more valuable than any low price.
