Finding a firm to help you with the distribution of your goods

Your final decision that you will need to make is who to get to help you with all of these activities. You could negotiate space, rates and booking with each mode of transportation yourself, but this requires quite a bit of specialist knowledge which you probably don’t have. You would also have to handle the arduous task of export documentation yourself which can be quite challenging in its own right. You probably also don’t have the contacts in the foreign marketplace to handle the transportation and customs clearing of your goods abroad. For this reason, you are likely to make use of a freight forwarder, whose business it is, is to handle all of these decisions on your behalf.

The freight forwarder – a key partner in the export process

The freight forwarder is a specialist whose business it is, is to know all about the movement of freight, including the transportation, documentation, and rules and regulations involved therewith. They also usually have a network of partners located across the globe that they work with that assist them with the foreign market movement of freight and with customs clearing. Unless you are a large firm with enough exports to justify establishing your own freight forwarding team, it is highly likely that you will work with a freight forwarding company.

What will you expect of your freight forwarder?

As your freight forwarder is a key partner in your export endeavours, it is important to select a freight forwarder that will add value to your company. Some freight forwarders, for example, specialise in certain types of cargos; others specialise in trade with certain countries; others specialise in particular modes of transportation; while others only provide certain specialised services. You need to find a freight forwarder, therefore, that meets your needs. In searching for the best freight forwarder for your firm, you will need to decide on the following:

• Does the freight forwarder have a solid business reputation? - The best way of determining this is to ask the freight forwarder for some references and then call the companies mentioned and ask whether they are happy with the freight forwarder concerned.
• Is the freight forwarder in question registered with the South African Association of Freight Forwarders (SAAFF)? - Although registration with SAAFF is not a requirement for being a freight forwarder, such registration suggests that the firm meets with the criteria set by SAAFF.
• Is the freight forwarder financially stable? - The freight forwarder is a key partner in your export process and may end up handling quite a large sum of money for which they are expected to, in turn, pay for other services such as shipping cots, the foreign clearing of goods, documentation, costs, etc. You need to be sure that they will not take your money and run. For this reason, it is worth doing a credit check on the firm. The cost is small money for the peace-of-mind that you will have. You could also ask the carrier – that is, shipping line and or airline - that they work with to see if the freight forwarder has a good payment record. Ask for documentation about the company (an annual report, perhaps)
• Is the freight forwarder registered with the International Air Transport Association (IATA) to deal with international air cargo (if you plan to use airfreight)? - Being registered with IATA is not a requirement to handle air freight. However, to register, freight forwarders must meet IATA criteria regarding financial and credit standing, physical facilities, professional qualifications, and ethical practice.
• What services does the freight forwarder offer? – Typical services might include:
• Booking space with the carrier
• Completing the export documentation on the exporter’s behalf
• Arranging for maritime insurance
• Advising on foreign import regulations and duties
• Providing guidance on the packaging, marking and labeling of goods
• Arranging for goods to be collected at the exporter’s premises and delivered to the port (airport, seaport or railway station)
• Arranging for products to be packed and containerised at the exporter's request
• Arranging for any warehousing that might be required
• Arranging all quayside services and loading of cargo onto the carrier
• Clearing the goods for export
• Arranging for the goods to be cleared through customs in the country of destination (if required)
• Arranging for the transportation of goods in the target country (if required)
• Arranging for the completion of any required documentation in the country of destination (if required)
• Arranging for any storage of goods in the country of destination (if required)
• Does the freight forwarder have knowledge of and experience with your product? - As we have said, some freight forwarders specialise in certain products and you would want to know if the freight forwarder you are considering working with has had any experience with your product (or at least similar products)?
• Does the freight forwarder have experience with your shipment method? - Some freight forwarders specialise in containerised cargos, while other specialise in break bulk goods. Some even focus only on bulk goods such as cola, grains or iron ore. You need to be satisfied that the freight forwarder you choose is familiar with your shipment method.
• Does the freight forwarder have experience with your target country? - This is a particularly important question to ask, as a freight forwarder will need to understand the rules and regulations that apply in the target destination and they need to at least have existing partners that hey have worked with before in that country, in order for you to feel comfortable that they can assist you with the transportation and clearing requirements that you will have in the destination concerned. If you exporting to a country such as China or Japan or Germany, if the freight forwarder (or any staff member) can speak the language of the destination country, this would be an added advantage.
• Does the freight forwarder have a network of partners that can assist you? - You need to feel comfortable that the freight forwarder has associate companies (that is, a network) that it regularly works with – particularly in the target country – that will be advantageous in getting your goods to their destination. If they are owned by the freight forwarder or branch offices, better still.
• Is the freight forwarder large enough to handle your business? - Working with a one-person business may mean that they are overstretched to point that they sometimes cannot handle your business timeously or neglect certain tasks. It doesn’t have to be a massive freight forwarder, but you need to feel comfortable that they have the capacity to handle your business in addition to the other customers they have.
• Does the freight forwarder have the facilities to handle your business? - You may want to know whether they have warehousing facilities, if you require such a service or whether they have trucks to collect your parcels or pallets (assuming that you are not shipping full containers). You would also want to know that they are computerised and can handle electronic payments and orders and that they have the office and human resources to deal with your business.
• Does the freight forwarder have "errors and omissions insurance"? -You want to be sure that if they make a mistake or neglect to include something in a document, for example, that they can meet any claims that you may make on them.
• Do you find the freight forwarder approachable? - This is a very personal business and you need to feel comfortable with your freight forwarding partner. Does the freight forwarder take the time to explain terms and procedures in a way you can understand? Are they prepared to come to your premises to see and understand your operation? Do they ask the right questions and try and understand your unique needs?
• Don’t forget about cost; is the freight forwarder affordable? - Most freight forwarders work on the basis of fees that are paid by the ex exporter. Such fees may be made up of an agreed-upon amount, plus documentation charges and charges for other specialised services provided (standard freight forwarding costs should be calculated into the fee charged by the freight forwarder). It is also not uncommon for freight forwarders also collect a percentage of the freight costs from the carrier.

Our sister sites: