How to find a trustworthy freight forwarder

You’ve probably seen the signs in other entrepreneurs and business leaders who sell internationally. The confident walk. The unwrinkled brow. The clear-eyed gaze that only comes from a restful night’s sleep, free from worry about shipping logistics, customs documentation and mandatory paperwork.

The secret of these unruffled exporters is shared amongst global companies of all sizes: They’ve managed to find their BFF, also known as their best freight forwarder.

There’s a special relationship between a company that sells goods internationally and its freight forwarder. A freight forwarder doesn’t actually ship your goods, but takes care of the logistics to get them to other markets smoothly, efficiently and cost-effectively. They can either manage some of the processing of your supply chain for you, or take you every step of the way—often called “door-to-door.” 

To get a basic understanding of the services a freight forwarder offers, try envisioning all the steps it takes to get merchandise, supplies, equipment, machinery, or other types of tangible products, from one country to another. Most of these paid services include:

• warehousing or storage;
• getting the goods ready for shipping (by sea, air, road or rail);
• preparing required documentation;
• purchasing cargo insurance;
• booking transportation and making sure the transporter has all the information and documents required (such as bills of lading);
• negotiating prices, routes and schedules, to find the right balance between speed, cost and reliability;
• upon arrival, breaking down the shipment into smaller shipments for delivery to various destinations in the market; and
• filing claims on the cargo insurance if something goes wrong.

Freight forwarders offer several other benefits besides getting your goods from Point A to B. 

1. Fostering a strong relationship with a good freight forwarder can help you build better relationships with your own customers and overseas partners. By ensuring your goods arrive on time and in good condition, a freight forwarder helps you maintain quality assurance and customer satisfaction, as well as building your brand as a reliable supplier. 

2. Hiring a freight forwarder can also save you time and money. Your company benefits from their established network of shippers and other export service providers—a network that would be too time-consuming for a small- or medium-sized enterprise (SME) to build on its own. 

3. Freight forwarders can often use those established relationships to receive volume discounts or other price reductions, which means you get a better deal than you could negotiate yourself. 

4. Similarly, a freight forwarder’s knowledge and experience with trade regulations and fulfilling documentation requirements (which varies from country to country) can help you get your goods to market faster, avoiding time-consuming errors or costly surprises at the border. 

Your business can benefit greatly from having a freight forwarder—as long as you choose the right one.

“Especially if you’re a smaller company or are new to exporting, the required process, paperwork, and regulations to ship your goods can be daunting,” says Arnon Melo, president of the Canadian International Freight Forwarders Association (CIFFA) and owner of MELLOHAWK Logistics, a Canadian company specializing in worldwide transportation and logistics services.

“But by partnering with the right freight forwarder, you can let them take care of the logistics, while you focus on what you do best: Making a great product and growing your business,” Melo says.

His five best practices for choosing the best freight forwarder:

1. Choose a freight forwarder with knowledge and expertise that match your needs 

A freight forwarder can’t be all things to all companies. Not only is it a big world with trade requirements and regulations varying from country to country, but every company—including yours—is unique. That means you should try to find a freight forwarder who specializes in your sector or the markets you’ve chosen.

Melo suggests asking these questions when trying to find a good match

• Look at the kind of services the freight forwarder provides—are you OK with choosing services à-la-carte, or do you need a full-service company tracking the shipment?
• How big is their network?
• Do they specialize in facilitating the shipping of certain types of products or commodities? 
• Do they have more experience and expertise with specific modes of transportation, shipping routes or markets?
• What do they understand about your particular industry?

An added bonus: If the freight forwarder has multiple clients dealing in the same market or sector, they may be able to offer lower rates due to the prices they can negotiate. 

Another area of expertise that companies may not think about, Melo adds, is dealing with various types of payment options.

“You’ll want to know if they have experience with letters of credit, for example, and other types of more sophisticated payment transactions. That’s important because using letters of credit can get quite complicated in certain markets, and it could slow down the process if the freight forwarder isn’t cognizant of the procedures around it.”

2. Make sure your potential freight forwarder has a healthy sense of curiosity 

The freight-forwarding industry is focused on relationships, as well as shipping and logistics know-how. That means you should choose a freight forwarder who is intensely curious—about trade, people and your business. Those who are naturally curious about others tend to be well-connected. 

“Your freight forwarder should be able to build rapport with others and show a keen interest in how their business works and what their needs are,” Melo says. “If your prospective freight forwarder loves to talk and asks plenty of questions, that’s a good sign.” 

3. Choose a freight forwarder who’s well-connected

From warehousing to cargo carriers and customs, there are many different contacts in the process of exporting goods to another market. But if you have a freight forwarder whose relationships with those connections are already well-established, you get the benefits of an expert organizer and negotiator with all of these connections—through just one point of contact. 

4. Your freight forwarder should be transparent about services and price

Freight forwarders must balance a structure between price, timing and risk, Melo insists. 

“Be careful if rates look too good to be true, and be aware that the lowest rate is not always the best match for your needs,” he explains. “That lower rate may be due, for example, to a longer route they plan to take, so make sure that the extra time for delivery meets your requirements.” 

To be sure you’re getting the right deal for your needs, Melo recommends choosing a freight forwarder who’s transparent about how they’ll handle your shipment, the routes they’ll use and how they’ve structured their pricing. 

5. Consider a freight forwarder who’s CIFFA-certified

CIFFA is a Canadian-based, globally recognized association for freight forwarders. 

“To become a member, a freight forwarder must meet certain minimum requirements,” Melo says. “This sets a bar for your freight forwarder right away.” 

For example, CIFFA members must be bonded, have errors and omissions insurance, invest in trained staff, and have been in business for at least three years. 

The CIFFA website also describes the association’s exclusive standard trading conditions (STCs), which only CIFFA members can reference. The STCs clearly outline the roles and responsibilities of a company and the freight forwarder, letting you know what to expect and governing the relationship between you. 

Ready to find your freight forwarder? Use EDC InList for free

Knowing how challenging it can be for Canadian companies, especially SMEs, to find the right partners and connections, Export Development Canada (EDC) has created a free service called EDC InList.

“Finding the right service providers and building the right relationships are some of the biggest challenges our exporters tell us about,” explains Aida Alvarenga, a manager of Knowledge Business at EDC.

“EDC InList is much more than a regular supplier directory or a search engine,” Alvarenga continues. “Whether you’re a startup or an experienced exporter, EDC InList’s technology helps you match your needs to a local or international service provider you can trust because each supplier has been vetted by EDC and must follow our code of conduct.” 

Different types of suppliers supporting exports will also be added to EDC InList in the future. To try it out, register for a MyEDC account, which gives you one-click access to a variety of valuable trade tools such as the Export Help Hub webinars, expert analysis and more.