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QUESTIONS TO CONSIDER WHEN CHOOSING A FORWARDER
May 21, 2007
Whether you’re a first-time exporter or a seasoned one looking for a new forwarder, it’s best to speak with several freight forwarders before picking one. Here are questions to consider. Price obviously is a critical question, but it should not be at the top of your list. Some of the questions below may not be at all relevant to your circumstances, but many probably are. Some of those that are most important for you may be at or near the bottom of this list, so read through them all.
• Does the freight forwarder have time to answer your questions? Is she willing to take the time to explain terms and procedures in a way you can understand?
• Does the forwarder have a record of customer satisfaction? Ask for a list of satisfied customers and call them.
• Does the forwarder have knowledge of and experience with your product, desired shipment method and destination country? Many freight forwarders contend that, although they may not have prior experience shipping a given product or to a specific destination, they could handle any move, anywhere. But you may not want to take a chance with them, especially if you have other reservations about them.
• Is the forwarder financially stable? Ask for and check credit references. Check with carriers to see that the forwarder has a good payment record. Ask for a copy of its annual report — publicly traded companies must have one. Larger companies can be checked on the New York Stock Exchange, NASDAQ, or Dun & Bradstreet.
• What are the forwarder’s rates?
• Do you want a contract with your forwarder? If so, how long a term do you want it to cover?
• If you’re shipping by ocean, is the freight forwarder licensed by the Federal Maritime Commission? Currently, all ocean freight forwarders in the U.S. must be licensed by the FMC.
• If it’s an ocean forwarder, does it have a non-vessel-operating common carrier subsidiary?
• Is it a member of the National Customs Brokers and Forwarders Association of America? If it’s an ocean forwarder, has it received the association’s Certified Ocean Forwarder designation?
• If you ship by air, has the freight forwarder been certified by Cargo Network Services? Certification by CNS, the U.S. cargo subsidiary of the International Air Transportation Association, is not a requirement to handle airfreight. However, to register, freight forwarders must meet CNS criteria regarding financial and credit standing, physical facilities, professional qualifications and ethical practice.
• Does the freight forwarder have a network of overseas agents or an office in your destination market? Are they agents or owned and operated offices? Do the offices have the ability to communicate with one another on-line?
• Is the forwarder large enough to handle your business? Does it have ample facilities? For example, does it have warehouse facilities, if that service is needed? Does it have electronic data interchange capabilities? Does it have sufficient staff to handle your volume and other needs?
• If it’s a small or midsize forwarder without any overseas offices or agents of its own, is it part of a larger network? Examples of forwarder networks include Global Logistics Associates, United Shipping, World Cargo Alliance Inc., Worldwide Independent Network and World Project Group. Be sure, however, that the network is active. Ask for concrete examples of how the forwarder has benefited from membership in the networks.
• Does the freight forwarder carry “errors and omissions insurance” to protect it from loss due to lawsuits filed by unhappy clients?
• How close is the forwarder to your preferred seaport or airport?
• Does the freight forwarder have favorable shipping rates and schedules? What services are provided free of charge?
• Does the forwarder have 24/7 communications capability?
• What is the forwarder’s maximum amount of liability coverage?
Can high-value goods be accommodated?
• Can the forwarder arrange appropriate packing and crating services?
• Is the forwarder a member of a local or regional forwarders’ association?
• How does the forwarder stay abreast of issues relating to your type of cargo and industry sector?
• Does the forwarder also handle imports? Is someone on staff a licensed customs broker?
• Has the forwarder been certified as a member of the Customs-Trade Partnership Against Terrorism?
• If your product could be considered as hazardous cargo, what kind of training have staff members received in handling such goods?
— Rosalind McLymont and William Armbruster
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