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Freight forwarding networks: why are they good for both shippers and freight forwarders?

Freight networks play an important role in international trade, they help freight forwarders move shipments across countries, continents, and oceans. However, not every freight network is created equal. Many businesses that are new to international shipping might not be certain on what a freight network is and does, and how to distinguish the good ones from the bad.

What is a freight forwarding network?

A freight forwarding network allows multiple freight forwarders to work together to save money, mitigate risks, and maneuver shipments more deftly. Freight forwarders pay a fee to join these networks, and reap the benefits that comes with membership. Good networks will vet candidates thoroughly and limit their membership numbers in every region, so that there is less competition between members as well as more reciprocal trade with members from other areas. A less effective network may not limit the quantity of forwarders allowed to join. It’s a good sign for shippers when their freight forwarder is a member of a freight network [Link to previous blog], and it’s a boon to business for freight forwarders that choose to join a network.

Benefits of freight forwarding networks

A freight forwarder is most valuable when they have built strong relationships with carriers, port officials, and other forwarders. When the company has strong relationships, they can more easily facilitate your shipment and get a better rate. A freight network expands the idea of strong relationships and cooperation between freight forwarders, to maximize this power and compete with international trade juggernauts like FedEx.

The support that comes from a freight network is vital. In a freight forwarding network, freight forwarders cooperate to make business easier by reducing risks and insurance costs, and sharing business resources such as logistics filing systems. A good network will offer a payment portal to make it easy to pay other members who are not necessarily using the same currency as one another. Freight forwarding networks will offer online cargo insurance and some even will cover unpaid invoices between members. Quality networks will provide members with case and claim management in order to manage disputes between their members. All of these benefits help members get the most out of the network and ply their trade more easily. With a freight network membership, a forwarder can control and watch over a shipment using these enhanced resources – but still provide customers with a personal touch, unlike huge corporate shippers.

Freight networks can be specific to a region or country, or span the globe. For regional freight forwarders who may not necessarily have ties to other parts of the globe, a large and reputable freight network will aid them in shipping clients’ cargo to destinations which would otherwise be less manageable. Forwarders also benefit from guidance and support when it comes to claim management, in the case that something does happen to a shipment. The network’s cargo insurance will also be helpful in case a shipment is lost. Another benefit of joining a freight network is access to black lists. As with any trade, there are some companies that are better off avoided – and a freight forwarder network will keep a list of these bad apples.

With support from a freight network, freight forwarders can compete with the huge international shipping companies that automatically get the best rates from carriers.

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