Physical stores have seen the biggest online paradigm shift during and post Covid-19 pandemic. Although local and cross-border e-commerce trade was already flourishing before the pandemic hit, the pandemic and lockdown accelerated the process. From a small B2B company to a large multinational firm, the functioning of any business has highly become dependent on freight forwarding and logistics.

Local or international trade would paralyze if not for a systematically functioning shipment industry and supply chain management. If you plan to start up your own eCommerce business or expand your brand online, you must know the pragmatic options for transporting and delivering the goods.

To maintain a good customer loop, gain positive feedback, and increase profitability, your brand must offer a seamless customer experience. Moreover, how do you ensure that? With a safe, secure, and timely delivery.

Freight forwarders swarm in the market like bees. Thanks to digitalization, you can easily find a freight forwarder or a logistics operator near you. A freight forwarder only acts as an intermediary between transporting the goods from the producer to the consumer. However, logistics own the complete process of managing, packaging, storing, and delivering the commodities. Even though the process and the roles of the two might differ, they both benefit businesses globally and boost the economy.

From organizing the necessary documentation, customs brokerage, and cargo insurance, they hold the foundation for cross-border e-commerce and trade.

Role of Freight Forwarding and Logistics in Business Management

People often confuse the two, and logistics operators have been playing the role of freight forwarding as they deal with consignments, cargo bookings, and safe delivery of the goods. However, as more businesses are expanding their presence online, the difference is clearer. Supply chain management companies essentially deal with logistics, including transporting goods, warehousing, and dealing with legal aspects. Thus, logistics is a one-stop solution and service provider globally. At the same time, freight forwards operates alone and are hired by such companies, playing the “interlink” part in the industry.

Freight forwarders and logistics operators transport the goods using the same air, land, and water transport. Logistics have their fleet of transports, while the freight forwarders do not.

With a clear picture of the two in mind, it is easier to understand the global roles of freight forwarders and logistics.

Role of freight forwarders

• Expert advice on the shipment process:

Freight forwarders follow a systematic way to deliver the goods safely and timely to the customers. The agents educate the clients about how to ensure transporting goods efficiently from the producer to the consumer.  It is their responsibility to inform the client about the possible challenges, damages, and repercussions of the consignment, especially if is it is a long route transport. Freight forwarders have the knowledge and the demands in the market due to their expertise in cargo insurance, shipment regulation, specific banking options, and the specialized transport routes that can ease the entire process of the shipment. Their knowledge can also help you choose the right consignment with negotiated costs.

• Easy booking and selection of the mode of transportation:

One of the crucial roles of a freight forwarder is to book and select an appropriate cargo space in any mode of transport required for the shipment. In the “off-season,” it might be easier to get a booking in the ” off-season, ” while when the cargos are super busy, only a freight forwarder can get an easy way in, as they have their contacts. The extensive networks of a freight forwarder aid in global import and export, giving power to the people in different countries to trade seamlessly.

• The entire process of the shipment:

A freight forwarder arranges the packaging, storage (warehousing), and distribution of the goods. If the required mode of transportation is unavailable, the freight forwarders will warehouse the consignments in desirable conditions to keep them safe. Your contract with a freight forwarder often includes the services and charges for storing the goods before the shipment or after the arrival of cargo while it awaits the custom clearance.

• End-to-end cargo insurance:

The freight forwarders often arrange the insurance for the entire consignment (after charging a service fee). The insurance allows the safety of goods and the money spent even if a cargo meets an accident or encounters any unforeseen damage.

• Document regulations and custom brokerage:

A freight forwarder is responsible for all the necessary documentation, banking practice, shipment details, custom brokerage, and customs clearance. Frequently the legal issues are covered by logistics or the supply chain, yet a freight forwarder has to comply with all the legal aspects of the shipment requirements.

Role of the logistics operator

• Processing the order:

The purchase order you receive as the buyer “checks out” the cart is an important source of legal information. It holds the crucial details included the products or services ordered, total price, the mode of payment, the location and address of the buyer, and other terms. The order should be processed in the right way to ensure a smooth shipment process.

If there are any technical issues with processing the order, it can directly affect the delivery time. As the order starts ticking as soon as the customer clicks “confirm.”

• Inventory management and warehousing the goods:

The inventories- raw or produced should align with the customer requirements. You need to have the right stock at the right time and the right place. So the customer gets whatever they want, whenever they want. Although inventory control can be a hassle and eat up a huge chunk of your budget, you cannot lose the market opportunity. Warehousing allows you to store these inventories or goods before export and import.  Select the location and conditions that meet the requirements of your consignment.

• The mode of transportation:

The order can only be completed once it is delivered to the destination. Logistics operators own their fleet of cars, planes, or boats, depending on the mode of transportation. Therefore, they can deliver the order as soon as it is ready. Whereas if you are looking for a freight forwarding agent, it may take some time before you find the ideal shipper for your consignment.

• Handling the material and the supply chain:

How fast the consignment moves along the supply chain and is delivered to its destination depends on the handling of the material. For safe, secure, and timely delivery, the inventory must be handled with care and professionalism. Amy damage to the goods or delay in the shipment can lead to the rejection of the order by the consumer leading to monetary as well as customer loss.

Mechanization and automation handling should be done wisely to enhance productivity at every level in supply chain and logistics operation. Mechanization and automation in material handling enhance the logistics system productivity. From the time the goods leave the producer until they are stored in the warehouse and reach the final haulage, expert material handling should enable speedily and safe movement.

• Packaging and information:

Logistical or industrial packaging is often the backbone of a seamless product distribution that enables a stable logistics operation. Logistical packaging is somewhat different from product packaging, and it ensures protection against any damage, allows safe material handling, and stabilizes the cost of storage. Monitoring all the technical details and information about the supply chain and the shipment process allows easy and safe delivery. In addition, it allows for tracking and accessing the location of the consignment at every point when it is en route.

The roles of freight forwards and logistics operators allow you to make the decisions that suit your business in the best and profitable ways. One important point to note here related to both shipment modes is the drastic changes in the freight costs. The following factors determine the cost of the shipment:

• The point of origin and the final destination
• Fuel costs at the time of delivery
• The season you are trading in
• Changes in the currency
• Changes in the custom fees
• The weight, load, and mode of freight

How to Choose between a Freight Forwarder and a Logistics Operator?

With all the workload and orders piling up by the desk, handling the international customers, and regulating cross-border e-commerce, it can be challenging to select the best shipment mode. Therefore, you must know all the stages of the shipment process- either freight forwarding or logistics. Not because you have to deliver the goods yourself, but to ensure that your customer gets what they ordered!

Identify the stages in the shipment process

Once you are familiar with the stages in the shipment process, it can help you decide better.

• Get familiar with the haulage, the process of transporting the goods from the producer to the point of storage/warehouse until the goods are exported.
• The custom clearance for export the consignment- all the documents should be to avoid any hassle at the exit point.
• Handling the Origin process-, the consignment can be stopped, unloaded for inspection, and checked at any point of the delivery to ensure a legal shipment.
• The custom and legal clearance to enter in the other country- clearance of all documents, and custom fees
• Haulage at the destination point or final haulage- the consignments should be safely delivered from the destination port to the import warehouse (if needed) or directly to the customer.

Whether you choose a freight forwarder or go for a logistics operator to cover all the aspects of the supply chain, here are some factors you should consider. Remember, the shipment process is all about a great customer experience.

• Know what you need. What and how do you want to ship the consignments? What should be the mode of transportation? What should be the starting point and the final haulage? How much time do you have to deliver the goods? List down your requirements before you start hunting for a freight forwarder or a logistics operator.

• Get in the market and do your research. You can search for the forwarders or operators over the internet or use your network for hunting down the best ones. Many websites allow public reviews and feedback, and you can easily find out the service they provide and the reliability of their services.

• Educate yourself about the role of freight forwarders and logistics operators. It is crucial to know their responsibilities to avoid fraud and ensure that your customer receives a timely delivery. You can acquire the relevant information via emails or any online resources available.

• The shipper should be financially stable.

• Do not be afraid to ask questions.

• Look into their customer service.

In Conclusion

Now that you have a better knowledge about freight forwarding and logistics roles, you still have a lot to work on. Choosing between the two can often be confusing and challenging. However, with solid groundwork and systematic research, deciding whether you need a long-term commitment with a logistics company or a seasonal freight forwarder might suit the budget better.

The transportation sector has a huge impact on world trade, and it is responsible for the smooth functioning of shipments across borders. The behavior of logistics companies, unavailability of freight forwarders, delay, and damage to goods can have major repercussions on supply chain management. This is why, when you own a business, have initiated cross-border e-commerce, trading with the leading giants like China and US, you have to educate yourself and find an expert for your shipping from China to USA needs.

As they say, knowledge is power. You can conquer the e-commerce world by webbing into the network of the supply chain. 

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