6 Hidden Facts To Consider Before Outsourcing Your Freight
Smart businesses know that outsourcing your freight operation to a freight forwarder provides greater operational efficiencies and increases customer satisfaction.
However, to get better control on performance and operations cost, it is imperative for you to understand the sea freight and air freight services you are engaging beyond a quotation.
There are many factors freight forwarders can fail to discuss or mention in their quotations that can have a huge impact on your operational performance. Origin and destination charges, various surcharges, vessel routing, historical transit time, cut-offs and country-specific condition are facts that you must know before engaging a freight forwarder.
Read on to learn 6 hidden facts to consider before outsourcing your freight.
1. Origin and destination charges
Air freight and/or sea freight is not the only cost you will incur to have your product delivered safely and on time. In addition, you also pay origin and destination charges which have an impact on the landed cost of your product. Often, the origin and destination charges add up to be more than actual freight cost so it’s imperative that your freight forwarder provides a comprehensive quote that includes origin and destinations charges. You also need to consider that freight rates may be going down but many of the other charges associated with shipping are increasing. Make sure your freight forwarder gives you visibility of the whole quote, including any fees and charges your goods may incur before you outsource.
2. Hidden surcharges
Apart from all the freight charges, shipping companies can charge additional surcharges like general rate increases (GRI), bunker adjustment fees (BAF), and port congestion fees just to name a few. Often these charges are not advised by freight forwarding companies at the time of quotation and appear on your invoice after the service has been provided. Be sure to check your freight forwarder has quoted all possible surcharges your service may incur. Your sea freight and air freight quote should reference a length of time the quote is valid for and the above-mentioned fees should be included for the validity period of your quote.
3. Vessel routing
Knowing your cargo routing is important. To increase profits, some unscrupulous freight forwarders use indirect over direct vessels, which impact your freight deadlines and delay your cargo. As a smart customer, be sure to check what vessel routing has been scheduled before handing your cargo over to your freight forwarder.
4. Historical transit time
When using air freight services, transit times become equivalent or comparable factors to cost. Just a few hours delay can affect your order and potentially create unhappy customers. Likewise, sea freight has uncontrollable transportation factors such as port congestion, labour strike and weather conditions that can affect your cargo delivery time. Check historical transit times and become familiar with your total lead times based on the historical transit times to build certainty in your supply chain.
5. Cut offs for right and tight planning
Whether it is your vessel cut off, transportation cut off or clearance cut off, it is always essential to consider each one of these for right and tight planning. Expert freight forwarders know that your cargo is shipped via a set of sequential processes and every process is dependable on another one. Make sure your freight forwarder keeps you updated about cut off dates and times.
6. Know country specific guidelines
Any country that you may be shipping to/from may have specific conditions and/or local factors which must be communicated by your freight forwarder well in advance. Some countries have guidelines about cargo quarantine and labour unions while others have certain packaging conditions and may randomly inspect cargo containers which you must know in advance to incorporate in your planning process.