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What
is Freight Forwarding? What do forwarders do?
Freight forwarding is all about the smooth flow of international trade.
The freight forwarder is the party who ensures that internationally traded
goods move from point of origin to point of destination to arrive: At the
right place, At the right time, In good order and condition, At the most economic
cost.
To accomplish this, expertise is required in a number of different areas:
Logistics
Close co-operation is required with transporters in every mode – road, rail,
sea and air. Freight forwarders are constantly negotiating freight rates with
transport providers, comparing the costs of moving cargo along different routes
via different modes and then designing logistics infrastructures which provide
the best compromise between cost, speed and reliability.
Those involved in this aspect derive continuous interest and motivation from
the fact that no two operations are the same, given the diversity of the nature
of cargoes that are traded and the increasing numbers of doors being opened
through the globalisation of world trade.
Once a forwarder’s recommendations with regard to cargo routing have been
accepted it becomes the responsibility of the forwarder to ensure that the
goods concerned are transported and delivered as planned.
The process of designing and executing these logistics plans has earned for
the forwarder the title "Architect of Transport".
Statutory compliance
A vital ingredient to successful trading on world markets is that every transaction
must comply with a myriad of statutory measures and their related procedures,
especially those associated with Customs. It is in this area that the specialised
skills and knowledge of the freight forwarder come to the fore. Without these,
international traders would become hampered through being distracted from
their core activities-meeting the material needs of world business.
Risk Management
To every international trade transaction there is an element of risk and the
increased complexity of international trading as compared to local buying
and selling requires that these risks are managed with tools which are correspondingly
more sophisticated.
International traders require that their forwarders be in position to advise
and assist them in minimising those risks which are particularly associated
with the movement of goods – loss, damage and destruction, although the exposure
of forwarders to the international environment in its entirety makes their
counsel as regards matters like credit and currency risks very much sought
after.
Finance
and Payment
Forwarders are entrusted with goods which are very often dispatched under
conditions where buyer and seller are not known to one another. Under these
circumstances the forwarder must scrupulously ensure that all requirements
of the door to door operation are complied with to the letter, especially
as far as the accurate and timely production of documentation is concerned
– excellence in this filed leads to prompt settlement for goods purchased
and satisfied traders.
An especially gratifying aspect of freight forwarding is the facilitation,
through consultancy and networking, of the entry of new exporters and importers
into the international market. More often than not this involves advice as
to the alternative methods of financing of the transactions concerned and
the establishment of payment methods that are mutually beneficial to both
parties.
Cross
functional integration
Business in the 21st century will be characterised by an important feature-
the way in which suppliers, manufacturers and consumers are being drawn closer
and closer together so that, for example, a six pack of Heineken beer purchased
in a store in downtown Wichita, Kansas will provide instant input to the Heineken
brewery in Holland for the next production to run, the next raw materials
purchase order and the next sales forecast.
The forwarder is ideally placed to act as the catalyst to maximise the benefit
from advances in information technology which are revolutionising these processes.
Furthermore the role of the forwarder will be key because, in adopting cross
functional integration strategies, companies are increasingly outsourcing
their non core activities. The ability to ensure the efficient and effective
door to door movement of goods from country to country from the time an order
is placed until finished goods are delivered to the final consumer places
the freight forwarder in a position to make a unique contribution to the enhancement
of value to the activities of exporters and importers.
A
career in freight forwarding
The globalisation phenomenon means that international trade is becoming an
increasing proportion of each countrys’ economic activities. The intimate
relationship which the forwarding industry has with world trade means that
the industry provides young people with a number of exciting career opportunities.
If you:
*like to work with people,
* have a sense of adventure,
* can be productive in a pressurised environment which is subject to constant
change,
* are prepared to study whilst you are working,
* are interested in working with computers in an industry which is becoming
increasingly dependent on information technology,
then you should contact the National Association of FIATA in your country
who will be in position to put you in contact with their members.
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