The Many Benefits of Effective Agents and Distributors
Very few companies have the resources to perform every activity at every stage in their supply chains. Most companies combine in-house logistics with third-party logistics providers, for at least a portion of their supply chain. The number of supply chain linkages and involved partner organisation or third parties (shippers, freight forwarders, customs brokers etc.) increases roughly in proportion to the number of national boundaries that freight and goods have to cross.
For many companies embarking on overseas trade, freight forwarders provide cost reducing solutions in the shape of transport rate quotations, vehicle chartering, space booking, cargo insurance, transportation charge handling, shipment expedition and visibility, and knowledge of foreign customs (sometimes including translations of documents). Freight forwarders generally achieve lower rates than are available to organisations who are booking directly with the shipper. Arranging intermediate transportation, for example from a rural manufacturing premises to a container port in one country to a container port and then on to a deep inland factory in another country – a multi-modal process that could involve road, rail, and sea with handling and documentation exchange occurring at each modality change – may be extremely difficult, and the cheapest possible price will elude everyone except a well-informed, contract holding freight forwarder.
Due to their handling multiple consignments, freight forwarders are given special rates by the shippers. Forwarders can feel container space with shipments from multiple unrelated organisations. This gives them the freedom to offer lower prices based on occupation of cubic space inside a container. Organisations who book their own container space may not be given the option of sharing space, so might have to ship a small product inside a mostly empty standard size container – but pay the same rate as somebody shipping a full container.