5 Ways Freight Forwarders Reduce Supply Chain Disruption

Effective freight forwarding and network partnerships can help companies prepare for unforeseen challenges and remain competitive. According to data cited by Business Wire, global logistics outsourcing is projected to grow at a CAGR of 4.77% through 2027. In 2022, 76.6% of companies experienced external disruptions, highlighting the need for risk management in foreign trade.

Working with freight forwarding companies is one way to build supply chain resilience. Freight forwarding companies can assist companies in various ways. They can help optimize routes, manage customs clearance, and ensure compliance with regulations. Moreover, they can improve scalability and offer a wide range of value-added services.

Route Optimization

Route optimization is among the most considerable benefits and opportunities of working with a forwarder. Ocean freight forwarders will work with you to ensure the best terminal is used for each load, considering all factors beyond the shortest route.

Meanwhile, full-service transportation services and supply chain optimization make it easier to visualize overall costs and opportunities for savings. This includes access to intermodal solutions, such as air freight, rail, ocean, and barge transportation. Forwarders consider all possible routes to create the most efficient and cost-effective mix of solutions.

This allows for a balance between cost savings and quality of service without sacrificing the required speed of service. Businesses can increase efficiency and reduce costs by using all available transportation options. This will enable them to find the most suitable route that meets their needs.

Customs Clearance and Document Management

Customs clearance is another core benefit of working with freight forwarding companies. These entities are well-versed in the requirements for pre-checks and inspections to reduce costs and delays. This includes helping to establish free trade zones (FTZ).

We can also assess your cargo for savings through various freeports worldwide. Forwarders understand the specific requirements of importing and exporting in the US. This includes what is required by Customs and Border Protection (CBP) and how to avoid delays.

Customs clearance also includes document management capabilities, such as serving as the importer or exporter of record. This reduces your liability and risk in paying all appropriate duties, taxes, or fees associated with global transport. In global trade, forwarders may also serve as the merchant of record (MOR) for e-commerce fulfillment. These roles help to speed time to market for products and reduce overall snags.

Compliance With Varying Laws and Regulations

Differences in regulations and laws are rampant in global trade. Each country may have varying rules and requirements for cross-border shipments, and that lack of consistency is an inherent risk.

For example, the German Supply Chain Law is perhaps the most recent notable risk in regulations in the industry. The law requires that any large company, according to defined criteria, must report ESG data to their German customers. Yet, fines can be as high as 2% of global turnover, reports Juliette Roswell via CIPS.

Working with expert freight forwarding companies will ensure your operations comply with all such laws. For example, the German Supply Chain Law requires that any large company report ESG data to their German customers. Yet, fines can be as high as 2% of global turnover. Working with a freight forwarder can ensure your compliance with such regulations.

Scalability With Increased On-Time Deliveries

Many organizations work with freight forwarders for their ability to scale operations. Forwarders’ businesses depend on meeting the needs of shippers and carriers. Their success depends on timely shipments. Companies can be certain that forwarders are using the most up-to-date technologies and resources.

Also, forwarders may have different technologies and solutions to streamline communications and reduce confusion. These tools create a highly scalable solution that grows with your company and empowers your downstream network. This ensures customers get their deliveries on time, without any disruption.

A Diverse Suite of Value-Added Freight Forwarder Services

The traditional definition of a customs broker versus a freight forwarder has also evolved. Rather than just managing the process, many forwarders have taken on a more hands-on approach and now possess brokers’ characteristics. These combined customs broker and freight forwarder companies may now offer multiple value-added forwarding services, including but not limited to:

• Cargo insurance selection, services, and claims filling. 

• On-demand reporting and forecasting that considers data from both internal and external sources. 

Reap the Benefits of Freight Forwarding With GEODIS

In conclusion, freight forwarders offer many benefits to businesses. They can optimize routes, manage customs clearance and ensure compliance with regulations. This helps companies reduce disruption and remain competitive.

Global logistics outsourcing is projected to grow at a compound annual growth rate of 4.77% until 2027. This means freight forwarding companies are in high demand. The importance of supply chain resilience cannot be overstated in today’s global economy. Freight forwarding companies are critical in helping companies mitigate risks and ensure their supply chain runs smoothly.

Companies can improve freight forwarding and customs management by partnering with experts like GEODIS. Experts will increase supply chain resilience and enable them to stay competitive in a dynamic market. Have more questions about customs brokerage services? Read more about how Customs Brokers can help you!