Role of Freight Forwarding companies in supply chain management
A freight forwarding company acts as an intermediary between clients and transport agencies to enable the goods intended to be shipped to reach its final destination. The global market for freight forwarding services grew by 2.7% in real terms in 2016. All the key logistic players today were traditionally freight forwarders who later diversified into other logistic segments over time. In Supply Chain Management, freight forwarders play a significant interlinking role as follows:
1. Global Transportation Network
Freight forwarders are considered as hubs of information owing to their expertise in international logistical processes which is mainly built on a social network of cross-border colleagues and contacts. They are well versed in the law of various regions as well as inter cultural differences and with their knowledge, can help businesses take advantage of the same.
2. Integration of Operations
Freight forwarders unify the different verticals of supply chain management by conveying the correct information at the right time and to the right recipient, initiating and facilitating the movement of goods.
3. Consultant/Advisory Services
A business can rely on a freight forwarder to seek advice on competitive situations, export strategies, trader terms to be included in foreign trade contracts, consumer needs and so on. With every passing day, more and more logistic chains are evolving into multimodal and cross-border systems and businesses can no longer do without a service provider who can manage the complexities involved.
4. Cost Effective
Transportation is the largest component in the logistic cost structure of a business and cost effective freight forwarding agents can help achieve a point of competitive differentiation. With their established global network, they facilitate import/export by providing standard services at economical prices. With the advent of freight forwarders, transportation is no more the cost-albatross in supply chain management.
5. Legal Assistance
All the necessary documents and certifications are prepared by a freight forwarder, who handles all the legal procedures and hence expediting the entire flow of goods from the shipper to the destination. Procedural and documentary compliances are taken care of by them thus ensuring hurdle less global trade activities by a business.