If you have ever moved goods between countries, by land, sea, or air then you have probably heard of freight forwarders. Freight Forwarders are there to assist with your shipping and should handle the whole process of the transportation and the delivery of your goods, including customs clearance. But do you really need a freight forwarder for your shipment or can you handle it yourself? If you're unsure whether a freight forwarder is necessary or what they actually do, then please read on. On this page, we will dive into the detail of what a freight forwarder does, what you can expect to pay for their services, and of course, provide details of excellent freight forwarders that can assist you with the shipping of your goods.
FUNDAMENTALS of Freight Forwarding
What does a freight forwarder do?
As mentioned above, a freight forwarder will take control of the transporting of your shipment from origin to your final point of delivery, be that home, office, warehouse, or other. Broken down into detail, as a minimum, it will include the following elements:
- Origin - Coordinating transport from the origin, be that your supplier’s factory or warehouse to the destination for shipment, usually the port or airport for onward shipment to your warehouse
- Customs Clearance (export) - Preparing, managing, and submitting all the required paperwork for the export of your shipment, in the country of origin
- Shipping - Locating, negotiating, and securing capacity for your shipment, be that by air, sea, train, or road
- Tracking - ensuring visibility of the shipment at all times, whilst maintaining relevant insurances for your product (often an added cost)
- Customs Clearance (Import) - Preparing, managing, and submitting all the required paperwork for the import of your shipment, to the destination country
- Delivery - Arranging haulage and delivery to your agreed final destination in your destination country
Are they really needed?
Whilst technically you could handle these elements yourself, a good freight forwarder has connections across the world and will ensure that the shipping process is handled smoothly, reducing the risk of loss or costly mistakes! It is unlikely that a freight forwarder will be handling many of these stages directly themselves, instead, they use their vast network of connections to perform the duties, whilst they manage it all.
Of course, if the worst happens to your shipment and you need to submit an insurance claim, they will be able to help.
Are there any disadvantages to using a freight forwarder?
Of course, there are some negatives and risks with everything, and below are some with engaging with freight forwarders:
- Cost - Using a freight forwarder can add cost to your shipment vs. negotiating individual stages of the process (although they can often realize benefits using economies of scale with shipping companies)
- Importance - If you use a large freight forwarder and you're moving small volumes, don't expect dedicated account management
- Control - You will have to relinquish control and put your product and your shipment into the trust of a 3rd party
- Coverage - Not all forwarders will cover all regions and all markets
- Credentials - not all markets are well regulated, and you should always verify your chosen supplier
So ultimately, are freight forwarders needed, and are they a valuable investment? Yes, a freight forwarder will cost you in additional fees but the value a good forwarder can add is invaluable.
How much do freight forwarders cost?
When you use a freight forwarder, you will, in most cases, agree on a quote for the end-to-end process of moving your shipment from its origin to your destination. However, the cost of the shipment will actually be made up of something like 15-20 different components!
When working with a freight forwarder, it is critical that you get an itemized quote ir order for you to understand what is (and crucially, what is not) included. Whilst the core job of a freight forwarder is to arrange the transport of your product, however, this also comes with the requirement to deal with a number of other elements, including customs clearance and various other pieces of paperwork.
When you receive your quote, there are a number of key elements to review, namely:
- Transport costs – covering all the transport requirements, be it air, sea, road or a combination, from origins to destination. Costs might be calculated using cargo weight or via volume – or both
- Product-specific costs – Some items attract additional costs. Perhaps your product is very heavy or bulky and requires a crane for loading or is hazardous and therefore it will need specific licenses and will attract specific processes and procedures, which add cost
- Storage – if your product needs additional storage (beyond the normal allowance) either pre or post transportation
- Palletization or specific packing - Depending on how you’re shipping your items, they may require additional packaging (e.g. air freight) or to be loaded onto pallets, ready for container transport
- Extra fees – this could be a number of miscellaneous items, including things such as specific delivery requirements (e.g. time-specific delivery) or prescribed ports, which draw additional cost
- Documentation costs - customs paperwork including export and import
- Insurance and surcharges - to cover things like fluctuations in the price of fuel, or the currency exchange rates
- Administration or handling fees - often added by a freight forwarder, these are admin charges for handling all the elements (of course they realize margin in the other elements). These tend to be £50-£100 per shipment
How do I find the right freight forwarder for me?
There are thousands of freight forwarders operating across the world, so how do you go about finding them and determining which is the right fit for you. Well, you have come to the right place! At For the Love of Logistics, we have compiled a directory of all logistics services, including freight forwarders. Below, you will find a list of freight forwarders that are strong operators in the UK, from larger, well know names, to specialists who may be able to offer more direct and dedicated support.
Of course, if you have any questions, please reach out to someone at For the Love of Logistics team via the contact us form if you have any questions.
The FTLOL Team
Airfreight vs sea freight – The battle of the freight!
When you are importing products from around the world into the UK, there are predominantly two main options; air freight or sea freight (or maybe road if your product comes from Europe – see our road transport section for more info). Which one you choose predominantly comes down to two main factors: speed and cost. Of course, there is a good chance that your circumstances may dictate your decision. For example, need a product in 3 weeks? Well, Air freight is your only option. Got a heavy and bulky product to ship? You guessed it, sea freight will be your only (sensible) choice!
That said, the above is oversimplifying things a little and there can certainly be some nuances that for consideration. In this section of the Knowledge Centre, we will look into the differences in a little more detail, to help inform you to make the best decision for your business and individual requirements.
It goes without saying that we have many great suppliers to help you with whichever option you select and these can be found in the ‘ocean freight’ and ‘air freight’ sections of the FTLOL Directory.
So, let us get down to it, Air vs. Ocean:
Let’s dive deeper:
How time-critical is your requirement?
Arguably the key consideration is time. Assuming your goods are based in Asia (but apply to anywhere that is not Europe!) and you need your goods in a week or two then you will need to utilize air freight. There is simply no other mode of transport that can move products from origin to destination with such speed. As you can see from our infographic below, goods can leave China and arrive at your UK destination in 4 or 5 days (best case). Conversely, If you are not in a rush to get your shipment to the country (perhaps you have plenty of inventory and you are prepared to wait), then sea freight is undoubtedly your best option. But be prepared to wait – the factory (China) to your warehouse (UK) can easily take 6 – 8 weeks.
| Port to Port | Door to Door | |
|---|---|---|
| Sea Freight (FCL) | 40 - 57 Days | 45 - 61 Days |
| Sea Freight (LCL) | 40 - 57 Days | 48 - 68 Days |
| Air Freight | 1 - 5 Days | 4 - 11 Days |
| Express* | 5 - 7 Days |
What cost are you prepared to pay?
Whilst air freight is speedy, it comes with a hefty price tag. Air freight is usually 4-6 times the cost of sea freight for the equivalent CBM. For example, 1CBM by sea is approximately the same as 1000KG but for air freight 6CBM is equal to 1000KG. Also, If the weight of your goods increases by sea freight, it will have minimal impact. Increase the weight of your products by air freight and the cost will skyrocket, far exceeding the 4-6x multiplier.
Duty and VAT
One very important factor to consider regarding costs is Duty and VAT.
VAT might not be such an issue, if you are VAT registered as you can reclaim it. However, if you are a smaller business or are just starting out then it can have a significant cost implication.
Create own version:
| Sea Freight | Air Freight |
|---|---|
| Goods £ 5000 | Goods £ 5000 |
| Freight £ 310 | Freight £ 1200 |
| UK Duty (6,5% of £ 5310) = £ 345 | UK Duty (6,5% of £ 6120) = £ 403 |
| Imort VAT | Imort VAT |
| 20& of (£5000 + £310 + £345) | 20& of (£5000 + £1200 + £403) |
| = 20% of £5655 | = 20% of £6603 |
| = £1131 | = £1321 |
| Total Duty & Vat : £1476 | Total Duty & Vat : £1724 |
As Duty & VAT are percentages, based on the total value of your products and freight, the more expensive the freight, the more you pay in Duty & VAT. As you can see from the above, it can have a significant impact on your total cost per unit.
So again, the key consideration seems to come down to the urgency that you require the goods vs. the trade-off of price. However, there are a couple of other considerations:
Reliability & Traceability
In an ever-turbulent world, with disrupted supply chains in the face of worldwide events such as Covid 19, reliability and traceability are increasingly important when considering your freight options. Securing capacity on an ocean vessel can often be difficult, with carriers bumping customers to the next departure (or worse), and sometimes vessels missing ports altogether in a bid to move equipment or alter routings and their timings. With air freight, airlines' schedules are much more reliable and less subject to change. Even if they do, then the knock-on impact is often only a day or two whereas with the ocean it can be weeks! Airfreight also comes with more traceability, and you will get constant updates as your products move from one stage to the next e.g. ‘Departs Hong Kong’ or ‘Arrives Heathrow’.
Environmental – ecological footprint
Last, but by no means least, the environmental cost of transporting your products should be considered. Time and money is important, but, we also have a responsibility for the world we live in, not least the environment. Whilst both methods will of course have an impact on the environment, air freight is currently significantly more impactful per km vs. transportation by sea. For each kilometer traveled sea freight will emit approximately 20g of CO2 per ton of cargo moved whilst air freight is closer to 500g per kilometer.
In summary
From this section of the Knowledge Centre, you can see that the main consideration when deciding between sea or air freight is deciding whether to trade time for money. Whatever you choose will come down to your circumstances. You might choose a combination of the two, sending some products immediately by air whilst the majority follow by sea. Either way, you will no doubt utilize both options at some point, and when you do, remember this easy comparison to help guide your decision:
| Air Freight | Sea Freight | |
|---|---|---|
| Quicker Product Arrival Time | Yes | |
| Lower Cost | Yes | |
| Safer Product Delivery | Yes | |
| Better for Heavy Weight | Yes | |
| More Likely to be on schedule | Yes | Yes |
| Tracking | Yes | Yes |
But wait, is there a ‘new’ alternative? The combo – Sea Air
We just spent this section telling you about air vs sea. Whilst that is undoubtedly the main decision in freight and the two options that cover the majority of long-distance freight volume, there is another option…
In recent years there has been a new alternative to air or sea that has grown in prominence, one that looks to find a happy medium between air freight and sea freight – Sea air. Taking some of the speed of air freight, but keeping costs more aligned to sea freight, Sea air should be considered as part of your freight mix.
Routings
Most often utilised from Asia to Europe or the USA, products are usually shipped from Asia to the Middle East before being off loaded in the Middle East and the continuing their journey via air to their final destination.
Benefits of cost and time
Sea air from China to the UK can result in your products arriving at their end destination approximately twice as quickly as purely transporting purely by sea freight. Cost savings can also be significant, with savings vs. air freight in the 25%-50% range.
When to use it Sea air?
It is unlikely that you would utilise Sea air as your regular method of freight, however it should be considered for time sensitive movements that are not urgent enough to air freight, but where time is still of the essence!
We hope this section of the Knowledge Centre has helped to inform you of the differences between and the comparable benefits of air freight vs sea freight. If you have any questions, please do not hesitate to reach out.
Of course, should you wish to find the best shipping carriers, airlines for cargo or freight forwarders then you should head straight to the FTLOL Directory to find the very best companies to support you with your needs!
Thanks
The FTLOL Team