Freight Forwarding Analysis

Freight Forwarding companies broadly occupy a prominent part in the Indian Industrial sector. It is actually the foundation of all manufacturing & trading activities in our economy.  Not only has it played a crucial role in processing the smooth movement of goods from its point of origin to the point of its consumption but it ensures that everything is delivered at the right time, right place and to the right customer. In a developing country like India where demand is always high and consumption is emerging, the stakes in the freight forwarding industry always remain high for both consumer and supplier.

According to Global Logistics Research, digitization has added a lot of value for freight forwarders as the online services helped to improve supply chain transparency and efficiency while potentially reducing costs as well. Online Freight Forwarding services seek to optimize the freight forwarding process paving the way for advanced growth and profitability. As a result, the ability to analyze customer’s needs became simple and they could be provided with the differentiated and advanced logistics solutions.

Technology is doing to freight forwarding what it’s done to just about every other industry – making it reconsider its pinch points. Shipping is largely a commoditized service due to which freight forwarders are fighting to market share with very few tools in their belts. On the top of that, fragmentation of the marketplace is the main issue in freight forwarding sector. Falling fuel prices and an overabundance of capacity have pushed prices down. This kind of scenario is the cause due to which these freight forwarding companies have no other choice other than offering something innovative or out of thee box.

One important strategy to counter this challenge is to use balance sheet strength to acquire niche players in important trade routes and geographies, especially in emerging markets. As trade routes become more competitive and as freight rates fall, the industry’s traditional bargaining power with its shipper’s volume would be challenged. That will require better IT tools to improve internal process and efficiency to generate analyses that result in deeper understanding of customers industries and business processes.

Presently, only a sprinkling amount of traditional freight forwarders provides the same level of visibility as digital experience offers. Technology is undoubtedly the best key when it comes to quickly sharing the information or transparency in the entire process. Doing things in an old-fashioned way works only for certain industries and when we talk about freight forwarding companies, there is an issue of up to the minute rate availability, as well as RFID identifiers for containers which alert shippers about their cargo at all times, avoiding the dreaded black hole of invisibility.

One of the main cause due to which the traditional freight forwarders are facing a down shift in technology is that only a handful of traditional freight forwarders provide tracking tools and sailing schedules. Online freight forwarders tend to have tracking tools for various types of shipments. Those who can grasp the importance of transparency are the ones who are leading.

On the other hand, there are still 68% of people who believe that traditional freight forwarders are still relevant today. Now the reason for this is the personal touch that many shippers have with their freight forwarders. For some people, it’s vital to know that there’s a human presence behind the delivery of goods and to have someone they can rely on to make sure things progress along well. That’s however not possible when it comes to online freight forwarder.

Though traditional forwarders risk falling behind the technology curve, we’ll wind up with the conclusion that the future of freight forwarding companies is really hard to ponder upon as it is facing more uncertainty with the dynamic economic changes happening now.

How GST will impact Logistics and Warehouse Industry in India?

The projections stated in a research says that the logistics industry in India is expected to grow at CAGR of 20% by 2020.However, the industry has been sailing through rigid tax oriented strategies and higher costs all along. This has a great impact on how effectively the resources can be managed. Tax evasion strategies by most companies has led to multiple warehouse facilities springing up in diverse geographies so as to benefit from different state policies. Though, such strategies are no rescuers. The unorganized infrastructure and far spread physical presence act as hindrances to logistics efficiency.

Nevertheless, the advent of GST seems to bring some sunshine to the industry. The implementation of this new policy is expected to bring down the costs up to 20%. There are other transitions we may expect to witness along. Here’s how it will impact the logistics and warehouse industry in India…

As per the old tax policies, there were different taxes imposed in different states. This compelled companies to build warehouses in different states. Of course, it was strategic considering tax evasion. However, it also boosted the operational costs. Implementation of GST brings quiet a relief here as there’s uniformity in tax now across the region. So, companies now need not have multiple warehouses in different state, but can rather have a central one which may serve diverse geographical locations.

Consolidation of warehouses would act as a catalyst to bring down the IT costs which otherwise was allocated for ERP systems for smaller warehouses spread across different locations. Centralized warehousing would lead to implementation of faster and efficient technology and will automatically reflect in operations costs.

Inventory management with the present scattered warehouses is certainly a task. With implementation of GST, there would be fewer or more centralized warehouses which would make it easy to track the inventory and also forecast demand.

Reduction in number of warehouses and setting up larger centralized warehouses at prime locations will certainly make the sector more organized. Companies that were earlier more concerned about saving on taxes would focus more on operational efficiencies. With this, the logistics costs will come down.

GST has already hit the India businesses and soon we will witness the positive impact of this bill across the sectors. Logistics and warehouse industry is certain to benefit and grow with the implementation of this new policy.

Customs Clearance – An Important Aspect of Cargo And Shipping Industry

If you are into import and export business, you already understand how crucial it is to get customs clearance for your cargo. That’s where custom brokers play an important role.
Customs clearance is certainly an important aspect of cargo and shipping industry. A custom house agent looks into all the nitty – gritties of process involved, acting as a seamless facilitator of your shipment and delivery of goods across international borders. Typically, your customs broker will aid you through concessions on tariff and costing, issues pertaining to valuation, documentation, rules, taxes, duties etc. Here’s how customs clearance can affect your shipment.

The rules and regulations pertaining to import and export of goods are different for every nation. And these keep changing time and again. If you do not keep yourself updated on these laws, it can create handful of mess for your shipment.

Custom brokers keep themselves updated with evolving customs laws and regulations and ensure that are being followed throughout. This leaves you all hassle – free of having to know updated customs laws. A veteran custom clearance agent is there to guide you so you can focus on your core areas.

Custom house agents make international trade a hassle-free experience for you. Yes! They not only guide you through the process and documentation, but they remain in the forefront and deal with the government official and other agencies to facilitate the clearance process.
Customs clearance involves a lot of documentation followed through meticulously so you have your cargo cleared on time. Unless that happens, your business may get affected. Customs brokers work efficiently knowing all the processes, and ensure you shipment sails through every step.

Another important aspect in customs clearance is the digital age. With shipment processes being migrated online, it is all the more important to identify a custom house agent who keeps himself abreast of technology and continually develop the infrastructure to meet the needs and ensure that the processes are followed properly.

Whether you are into shipping business or you ship your goods across global peripheries, customs clearance is an inevitable and important aspect of your business. Understanding and working with a veteran custom house agent will certainly relieve you of all your clearance worries.

How to find the best ocean shipping provider?

It goes without saying that you need an expert from the industry when it comes to global shipping. Ocean shipping industry is certainly not new. However, the ever-evolving norms often make the game of ocean worldwide shipping logistics, a challenging one. For any newbie in the industry, things can become difficult to manage if they don’t keep a track of new regulations, both national and international. That’s exactly the reason why you need to liaise with the best ocean shipping service provider. Here’s what you can look for –

If your shipping requirement is of large amount of goods or vessels, it is important to understand whether your global shipping service provider can manage that for you or not. Else, it may cause unnecessary delays or your shipment can get stuck due to regulation issues. Also, it is important that your service provider has expertise in handling different types of goods, especially what you need to ship. Handling different types of goods need thorough knowledge and specialized equipment. Your ocean shipping provider may or may not have that.

An ocean freight forwarder who has sound standing in the industry will have a well-established network at international ports across the globe. This is an important aspect to consider when you need your goods to be delivered at international destinations. Well-established local offices at delivery ports can assure you of smooth and hassle free deliveries of your goods at your desired locations.

You will find substantial differences in the ocean freight rates that many service providers offer in the industry. Of course, you must look for the best rates. However, it wouldn’t be wise to go with the one offering you the lowest of the low. It is important to factor in other aspects of the service provider like frequency, stability, transit time, etc. along with the rates before you zero in on any global shipper.

No matter what, you cannot have a freight forwarder who is not flexible in its service offerings. A veteran ocean shipping service provider understands that every company or client has different needs and they customize their offerings to suit your shipping requirements.

Communication is the key to ensure you are continually aware of the progress of your shipment and you can connect with your vendor anytime you need to. So, before you finalize on your ocean worldwide shipping service provider, understand how strong is their backend and how they enable you to track your shipment.

An ocean shipping service provider can ease up the process for your global shipping requirement or cause you a headache with its inexperienced or inflexible services. So be vigilant and wise before you take anyone onboard.

5 things to consider while exporting goods

Unlike local business, exporting is a different ball game. It’s like entering a new marketplace with new norms, new business culture, new compliance and much more. Going international requires doing research. You just can’t plunge into pushing your goods to new place expecting a smooth sail.  You can avail great deal of guidance from your international freight forwarding service provider. However, do your bit of study before you consider exporting your goods and have a good business strategy in place to begin with. Here are a few things you must look into –

While research is essential, it’s important you identify the destinations where you would like to export your goods and focus on getting details about the place. Study the market, the challenges, the advantages, the norms, sales channels, advertising, laws, taxes, duties, trading rules, etc. – all of these are important to devise your export business plan. Take a consult from your local Chamber of Commerce if you must.

Be flexible in your selling strategies. Going international means a fair amount of investment must be made. You can explore the options of getting into a joint venture. The advantage you will get here is that your products get the entry into the new market right away. However, it may not be able to create that new arrival impact for your brand. On the other hand, you can look at opening a branch office, but that’s a huge investment. Selling online is also a great option but has its own challenges.

It’s wise to define your payment norms well in advance, especially when you have international customers. Get it documented. Many customers may portray as creditworthy and may ask for privileged. It’s ok to ask for deposit. Keep an eye on currency exchange rates. Fluctuations can make a great deal go into losses. Plan vigilantly. Look at credit insurance while extending credit terms.

You need a good international logistics solutions provider who has thorough knowledge and experience in your preferred destination of exports. Under whether your freight forwarder can provide you an end-to-end service or not, whether they are able to consult you on mode of shipment and give you service at competitive air freight or ocean freight rates.

Customer behavior study is very important and must be done before you plan your export strategy. Understand their needs and their buying patterns, what they think about your products, etc. This will help you position your product well in the international market.

Common Shipping Mistakes

Whether you are a SME or a large corporate house, if you have need for global shipping, it’s imperative you be vigilant about the shipping process. Although most companies watch their processes very closely, sometimes, even a small shipping mistake can land you in a bigger soup than you can imagine. Yes! Increased costs, delayed shipments and many more hassles. Here are a few ones that can act as troublemaker for you and your shipment.

Worldwide shipping
is a stringent process and requires you to meet a series of compliance’s before your shipment leaves your base. These compliance requirements differ with different destinations. Randomly picking the services of any agent in this field may land you in serious trouble. For instance, if your freight forwarder has not operated in a country and does not have proper network to work with, your shipment can get stuck due to reasons like non-compliance of documents or even packaging requirement and many such other reasons.  A professional and veteran agency providing freight international services can not only guide you on this, but also can help you gain an edge with best air freight or ocean freight rates.

Insuring your shipment is one of the wisest thing you could do. Freight forwarders usually recommend this to all their clients. However, many businesses may choose to opt out of this for varied reasons. In such cases, risks of loss due to damage to shipment can be considerably damaging to the business. So take help of your logistics solution provider and get your shipment insured beforehand.

This mistake can not only cost you later but can also result in delayed shipping. If you do not have proper weighing equipment, you may end up providing estimated weight. Once your shipment lands with the carrier, your shipment will be weighed again on the certified scales and you will end up paying an additional fee for re-weighing.

The most common mistakes businesses make is opting for lowest possible class for their LTL freight shipping. Obviously, this is to save on cost. However, once the carriers inspect, the chances are that your shipment will be re-classified and you will be charged a fee for that. Freight class is an important factor based on which the charges are determined by the carriers and hence they are vigilant about this process. If the shipper goes wrong on this, it is difficult to manage the dispute and equally time consuming as well.

Apart from these, there are many other mistakes you need to watch out for like incorrect address, improper packaging, delivery receipts, etc. Make sure you hire a professional freight forwarder who takes care of your shipment needs end-to-end.

Documents required for Ocean Freight Shipments

Shipping cargo to international destinations is often seen as a challenging and sometimes complicated aspect of global shipping logistics. Primarily because, it’s a tedious and pretty elaborative process. It involves a lot of documentation between the shipper and the receiver mentioning destinations, details of goods, ocean freight rates, etc. A professional freight forwarding company offering global shipping services can not only relieve you of all the hassle but manage the entire process for your smoothly, ensuring timely delivery as well. The most important aspect of Ocean Freight shipments is documentation without which your shipment can be stranded amidst worldwide destinations. Let’s take a look at what are these important documents.

The contract between the carrier and the one who ships the goods is known as a Bill of Lading. There are two types of bills – negotiable or Shipper’s order of Bill of Lading and the non-negotiable bill. A negotiable Bill of Lading means that it can be traded, bought or sold easily even when the goods are in transit while the non-negotiable bill cannot be traded. This thing is same with domestic shipments.

A lot of freight shipment forms are necessary to be able to move the goods from one location to other. Of course, not all of the documents would be required for each of the shipment. But, it is imperative to know and comprehend the reason and necessity of each of the forms.

Not all, but specific countries do require a Certificate of Origin. The Certificate of Origin is basically a signed document that specifies the origin location of the item being exported. Semiofficial Organizations like the Chamber of Commerce often sign this document. It is crucial to understand that some nations require you to have the certificate of Origin even when you have the same information in the commercial invoice.

A commercial invoice is included along with all your shipping documents. It is essentially a bill from the seller to the buyer for the goods. While assessing tariffs and the custom charges, the government uses this invoice so as to ascertain the value of the goods being shipped. Some countries require you to have a consular invoice which has the information related to the consignor, value of the shipment and the consignee.

The Commercial Invoice and the Bill of Lading consist of a Destination Control Statement. This document notifies all the foreign parties and the carrier that the item can only be exported to certain locations.

Depending upon the country, it might be necessary to incorporate an inspection certificate. An independent testing body or a third party might perform the inspection.

The SED needs to be filled out for official purposes. But, it only needs to be prepared for shipments that have a value exceeding $2500. Also, the shipments that require an export license or are to be shipped to countries that have been restricted by the Export Administration Regulations require a SED.

Apart from this, the Insurance Certificate and the Export Packing list are also required for the shipment. The importance of proper documentation while exporting goods cannot be neglected as it ensures that the exports arrive in appropriate time.

Things for consider before you choose your Freight Forwarder

Shipping your goods to another country is no less of a task. The process involves many things including transportation, regulations pertaining to exports and imports, insurance, documentations and many more. You need to pick the right agent; a good freight forwarder who knows the in and out of the international shipping process. Here are a few things to consider while finalizing on a freight forwarder.

It goes without saying that a freight forwarding company that has spent more time servicing clients in the industry certainly knows the ways and is well equipped to deal with any situation that may arise while your shipment is in transit. However, it is also important to understand whether the company can ship your goods to your desired destination or not; have they done that before or not; Do they know the regulations involved to ship your commodity to that location?

Not all freight forwarding companies can handle all types of cargo. Carrier would require to have requisite licenses to handle dangerous goods. Also, their drivers are required to be certified to manage or carry such goods. Liability insurance and custom license are must if the carrier is to handle certain type of goods. And then there are compliance regulations for oversized loads too.  Hence, this becomes the most important and relevant point to find out whether the company has experience and relevant licenses to handle or ship your goods.

Lowest cost does not necessarily mean the best service. Although cost is certainly an important factor, however, it is important that your shipment should reach the destination well on time, without any delays and hassles. A veteran and reliable freight forwarder offers a hassle-free service and manage your shipment end-to-end. This may also include consolidation and warehousing.

You should be able to track your shipment at any point in time, including things like where the goods are lying, which shipment is loaded or unloaded or delivered, etc. So, important questions here to ask would be – whether your freight forwarder is tech equipped or not? If yes, then how will you get the updates of your goods?

A good and trusted freight forwarding company always works with transparency. All the documentation requisites are explained and fulfilled before proceeding. It is advisable to have all the cost, timelines, liabilities and ownership details documented into an agreement before finalizing and proceeding.

And last but not the least, identify the company based on your requirement. There are freight forwarders for small and mid-size companies and then there are the ones for large organizations that offer full container shipments and LTL. Consider all the aspects and then make an informed decision.