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Recognizing legitimate freight forwarders

How do you know if you are working with legitimate freight forwarders?

Due to globalization, the number of freight forwarders is quickly increasing. There is a bigger pool to choose services from, but not all of the options available can be trusted. The forwarding business is not simple, and it takes more than calling a business a freight forwarder to successfully ship goods internationally. The business of freight forwarding requires a lot of experience and a complex knowledge and network.

Unfortunately, many of the new freight forwarders do not have everything that it takes to provide shippers with reliable services, and consequently the responsibility falls on you to do everything you can to choose a company that will get the job done.

  1. License

In order to check if a freight forwarder is “real,” the first step is to confirm that they have a license. The Office of Transportation Intermediaries (OTI) from the Federal Maritime Commission (FMC) is in charge of reviewing the application for OTI licenses, which is a must for any freight forwarder. The OTI investigates the applicant, decides the qualification to be given to the forwarder, and recommends whether the license should be issued. A complete list of all registered freight forwarders in the United States can be found via the Federal Maritime Commission website.

  1. Experience

The experience that a freight forwarder has determines the quality of the services they will provide.  A forwarding company must have people who know the processes needed to provide any logistics service. You can recognize the extent of a company’s experience when you talk to them: inquire about their steps for an import shipment, ask for the solutions they would give to different scenarios, talk to both sales and customer service people. You will get an idea of how well their people are experienced. Needless to say, look at their companies’ profiles and check how many years they have in the industry, and search their name in forwarder’s lists. For example, the TOP 50 3PL Companies from the Journal of Commerce offers an interesting list of Third-Party-Logistics companies, which are usually also the Top Forwarders. These kind of lists is the best reference for a forwarder’s reliability.

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  1. Extended Network

A freight forwarder cannot successfully execute their trade alone, solely from their home country - they need partners across the globe who can work together to provide customers with any logistics service. Some of the top freight forwarders have their own offices, with their same name, in every country. However, others partner with forwarders with different names, who are called “agencies.” Check with your forwarder about the kind of network they have. Either a same name network or a different agency network is good, but make sure they have international coverage instead of only a handful of countries. A bigger network means bigger support for your services and multiple solutions to your needs. If your shipment comes from a country that suffers strikes, a forwarder in a neighbor country might be able to help by transporting your goods by ground until the cargo reaches a non-striking port. These options are valuable.

  1. Financial strength

A forwarder should be able to pay its suppliers in order to ensure a smooth service for you. Forwarders that fall into risky debt are not attractive for their suppliers, and shouldn’t be for you. As much as possible, search for listings that reveal forwarder’s debt alerts. The information is not abundant, but certain websites like Forwarder’s Debt Recovery Services offer lists where you can find delinquent debtors on an international level.

  1. References

Just as you search for reviews and references before you buy an expensive technological device, search for references for the forwarder you want to choose. Ask references about their previous experiences and they will most likely give you an honest opinion that will let you know how reliable the forwarder is. If you don’t know who to contact, ask your freight forwarder about who their customers are and call them.

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