Jan 11 2017 0

The benefits of using a freight forwarder.

When dealing with overseas transactions companies need to make all the necessary arrangements to get the cargo into or out of the UK.  Whilst this can be done by the trading companies themselves, many choose to use a freight forwarder to take over these formalities.  In the UK importing or exporting requires a lot of knowledge to be done successfully.  A freight forwarder can make sure you have all the basics covered as well as being versed in the more complex shipment.  If you have just set up in the UK and have your first shipment to import, you may have your VAT number but did you know that you also need an EORI number?  This Economic Operator Registration & Identification (EORI) number is linked to your VAT number and is required to be declared on all customs entries.  A decent reliable freight forwarder will be able to help and guide you through this type of scenario.

Freight forwarders are an agent that acts on behalf of importers and exporters to organise the transportation of goods by the most efficient means possible.  The International Federation of Freight Forwarders Associations (FIATA), shorthand description for a freight forwarder is “the architect of transport”.  The forwarders can use a different variety of transport modes to move the customer’s cargo from A to B.  They may collect the cargo from the manufacturing warehouse via a truck, then road freight it to an airport or a seaport.  The forwarder will get the goods ready for shipment by clearing customs, completing security and preparing the shipment documents before they then send it to the arrival port of destination.  The cargo is cleared locally before being transported to the final destination whether it be by road or rail.  Some freight forwarders operate their own vehicles and warehouses but the majority do not hold these facilities.  They select the best supplier for each sector of the shipment to complete the movement.  Some large companies like Tesco and Marks and Spencer, operate their own vehicles (Beneficial Cargo Owners – BCOs).  However, they still work with freight forwarders for help in customs clearing their shipments and to help manage their supply chain process.

In the UK, freight forwarding in an unregulated industry.  Where as in the likes of the USA and Australia formal training is required for customs brokerage services, in the UK there is no such basis.  This means choosing the correct forwarder is a highly important decision but as its unregulated what should you look out for?  Most UK based freight forwarders should be a member of the British International Freight Association (BIFA).  BIFA is the trade association for freight forwarders and sets out a list of standard trading conditions which all members must adhere to.  Other associations to look out for are IATA, (International Air Transportation Association), IMO (International Maritime Organisation), RHA (Road Haulage Association) and FIATA.  Membership to any of these associations is beneficial as it shows the freight forwarder has accessibility to the mainstream transport providers and shows the forwarder has passed certain checks to become an affiliate.

The next decision is whether to go for one of the major carriers.  We have all heard of them, those that operate their own flights or vessels, you may not get the best deal money wise or the personal touch but the job will be done.  The other alternative is a non-vessel operating common carrier (NVOCC) which are equally as reliable but a little more personal which many companies find supports them through the shipment process.  Rates with NVOCC’s vary but most of the time a better deal can be made by tailor making the service you require.

Whichever option is chosen the importer or the exporter will be ultimately responsible for the shipment. So, it is of the paramount importance if you are exporting or importing you choose the right freight forwarder.  Not knowing global regulations can be costly to your business, so using a professional company will avoid these problems as they process in accordance with the relevant current laws.

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