Finding Your Forwarder
Prepare a checklist to make sure you ask the right questions
By Bill Armbruster
Picking a freight forwarder that’s right for you can be one of the most crucial decisions you make as an exporter. That applies whether you are a beginner or a veteran looking to make a change.
You may find a forwarder who’s right for you just by searching the yellow pages, or by asking a friend or two for their recommendations. But your needs may be different, and there you may have considerations that your friends haven’t thought of, so I suggest you use a checklist. Price, obviously, should be on that list, but I wouldn’t put it at the top. You don’t want to spend more than is necessary, but choosing a forwarder, like any other service provider, could be disastrous if you base your choice on price alone.
Here are my suggestions for what else should be on your checklist. And if you’re a forwarder, the list may include some suggestions that will help you improve your service and make your service more marketable. You should read the entire list because there may be an item near the bottom that’s vitally important and that you had not considered. Many of them apply to whatever type of service provider you’re choosing.
- Customer satisfaction. Get a list of references and check them thoroughly.
- A license from the Federal Maritime Commission. Ocean forwarders must be licensed in order to do business.
- The forwarder’s willingness to answer your questions and explain terms and conditions in a way that you can understand.
- Its record in finding vessel space and containers for other clients.
- Whether it has contracts with carriers and/or NVOCCs (non-vessel-operating common carriers), and if so, which carriers, which routes, the space allocations, rates, the provisions regarding surcharges, particularly bunker surcharges, and the expiration dates of those contracts.
- Whether it has an NVO subsidiary.
- Whether it’s a member of the National Customs Brokers and Forwarders Association of America and/or local associations. The NCBFAA has links to about two dozen locals on its website, as well as other useful links.
- How long it’s been in business.
- The forwarder’s financial stability. Ask for and check credit references. See if you can check them on D&B.
- Its safety and security records, including whether it has ever been fined for security breaches, and if so, how often, the seriousness of the violations, and the amount of the fine(s).
- The forwarder’s experience with your type of cargo, especially if you’re dealing in dangerous goods.
- Its size and its number of offices. You’re more likely to get personal service from a small forwarder, but a large forwarder may have more clout with the carriers. However, you’re more likely to get lost in the shuffle if you’re dealing with a big forwarder.
- Whether the forwarder has offices or affiliations with forwarders and/or brokers in your destination market(s).
- Whether it has warehouse facilities, if that’s something you may need.
- Staff availability during non-business hours if you have to cope with an emergency, especially one in a foreign market many time zones away.
- The forwarder’s familiarity with your preferred carriers, ports, destination markets and your preferred shipment methods.
- The number of staff, and their experience in the industry.
- What types of value-added services it offers, such as packing and crating.
- Whether the forwarder also offers customs brokerage and has a licensed customs broker on staff.
- The forwarder’s maximum amount of liability coverage.
- Its physical proximity to your preferred seaport or airport.
- How the forwarder stays abreast of industry issues.
- If it’s an air forwarder, it must be certified by the Transportation Security Administration.
- Whether the forwarder has one or more employees who have qualified for the NCBFAA’s designation as Certified Export Specialists and/or Certified Customs Specialists.
The NCBFAA has 700 members, and you can find them on its website, which also has links to about two dozen local associations, such as the Chicago Customs Brokers and Forwarders Association. While I regard membership in the NCBFAA and/or local associations as a positive sign, I know some excellent forwarders that do not belong to any association.
Another source is the Directory of Freight Forwarding Services, which includes a fairly extensive list of forwarders based both inside and outside the U.S.
Good luck with your search!
About Bill Armbruster
Bill Armbruster, the anchor for the Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. “I’ll be blogging on headline news and current issues in oceangoing commerce, trying to shed some light on the backstories and, wherever I can, supply some sound advice for shippers.” Write to [email protected]
The opinions expressed in this article are those of its author and do not purport to reflect the opinions or views or Descartes Datamyne. In addition, this article is for general information purposes only and it’s not intended to provide legal advice or opinions of any kind and my not be used for professional or commercial purposes. No one should act, or refrain from acting, based solely on this article without first seeking appropriate legal or other professional advice.
Date posted: September 7, 2010