Can Freight Forwarders add value to their Customers' Businesses?

Traditionally speaking, a freight forwarder is a company that receives and ships goods on behalf of other companies.

The official U.S. definition of the term "freight forwarder" is a "person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business

(A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;

(B) assumes responsibility for the transportation from the place of receipt to the place of destination; and

(C) uses for any part of the transportation a carrier subject to jurisdiction under this subtitle."

In short, a freight forwarder assists its customers in transporting goods from A to B. Is this true in 2020? What does the role of a freight forwarder actually entail?

Freight forwarding is a highly complex industry involving international knowledge of duties, regulations, transport routes, booking cargo space, negotiating charges and managing carrier relationships. Freight forwarders with owned warehouses will also cover warehousing, picking and packing, stock management and e-commerce solutions.

If you consider the role of a freight forwarder years ago and compare it to the role today, the job description would essentially be unchanged: Items are still being shipped from A to B, and freight forwarders are still organizing the transportation thereof.

However, technology continues its dramatic march toward the future. Politics change and shape globalization. International relations directly affect currency, economy, trading regulations, charges and access to product internationally on a daily basis. Our social and environmental awareness and communication needs to shift. So does the role of a freight forwarder. Here's how to ensure you're providing the best value to the modern customer as a freight forwarder.

Stay On Top Of Politics And Societal Impact

We deeply undervalue how intertwined politics and international logistics often are. Minor, major and oftentimes seemingly unrelated political decisions shape and quickly change regulations around international shipping.

As a freight forwarder, you should have representatives across all trade lanes and transport modes who have local knowledge and insight into the political changes in these extremely fast-paced times. They should help you foresee any societal implications and changing needs. You can also keep on top of shifting markets and trends yourself by visiting industry websites like SupplyChain247.

To pick an international partner, you can obtain information on credible forwarders through their governing bodies; for example, in the U.K., my company is a member of the British International Freight Association. The U.K. is an especially important market to stay aware of in light of Brexit and how it could affect global transportation.

You should work closely with local governments to cover the latest in regulations and foreign affairs in order to manage customers' freight needs effectively and find alternative routing or solutions when necessary. You can also source opportunities to not only manage but grow their businesses to provide added value. For example, build relationships at your local chamber of commerce or support local initiatives that matter to your customer base.

To further build relationships that can benefit your customers, liaise with key stakeholders from ports and airports at industry networking functions, such as events hosted by associations like the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) in the U.S.

Consider Technology And Economic Trends

In today’s modern society and in light of globalization, the role of a good freight forwarder is more important than ever. The progression of technology is pushing boundaries and changing how the world does business. With rising demands to move and receive product all across the globe, a desire for full transparency, tracking and insights into the global impact of every move, environmentally and societally, you should be innovative in your approach to the latest trends shaping the global economy. Whether you ship by air, sea, road or rail and whether you are in warehousing or e-fulfillment, it's important to keep up with the latest technology to increase efficiency. The logistics industry, alongside the global economy’s largest industry sectors, is impacted and continuously driven forward by the latest economic trends. You should be at the pulse of digital and technological trends and data analysis, advising and supporting your customers about the most effective use thereof.

For example, PwC recently released a report about the five forces transforming transport and logistics. Consider how you can incorporate some of the technologies they highlight, like artificial intelligence (AI), the internet of things (IoT), intelligent transportation systems, predictive maintenance and drone supervision to improve your customers' experiences. Providing real-time data is one key to enhancing your customers' experience. In the world of Amazon, we expect to track our shipments and parcels from collection right through to delivery. One way to accomplish this for your customers is to integrate with your suppliers', carriers' and partners' systems. For ocean freight, my company partners with a company that works with the shipping lines to provide real-time updates. For air freight, you can integrate with all the major airlines. It's key to surround yourself with like-minded partners who buy into this mindset.

In summary, the role of a freight forwarder today extends way beyond booking transportation. Today’s freight forwarding partner should take a consultative approach to providing personalized, forward-thinking solutions where adding value beyond simple transport solutions is part of growing your customers’ businesses.

Offering support across foreign affairs, data and technology, insurance, foreign exchange and the industry’s environmental and societal impact should be part of your day-to-day work of ensuring their freight forwarding needs are met.