10 TIPS on working with freight forwarders
Dr Romuald Rudzki offers some practical advice to help you get the most value from your freight and logistics partner.
That happy moment when an export shipment finally leaves your premises and starts its long journey to your customer is often a cause for great rejoicing. But in many ways it is only the start of your troubles, because your product is no longer in your hands but with the next link in the supply chain – namely the freight forwarder. And freight forwarders come in all shapes and sizes, from locally-based smaller firms to global multinationals.
Here are some tips on what to ask, and how to get the best out of, the forwarder you choose:
Have you done this before?
Pick a forwarder who ships your product (e.g. honey) to your market (e.g. Japan) on a regular basis. They should know what, in particular, is required in terms of packaging, export documentation and so forth.
What mode do you want?
From New Zealand you have two choices: (1) sea freight (95 percent of exports) or, (2) airfreight (five percent). Don’t assume airfreight will be necessarily more expensive as deals can be offered, especially for regular shipments.
Sea freight is notorious for catching out inexperienced exporters who are given an additional bill months later for the ‘Bunker Adjustment Factor’ – additional costs based on all the goods carried by the ship and then divided up amongst the customers.
Know your Incoterms!
Depending on what you have negotiated as part of the terms and conditions of sale, your costs for freight will vary from an Ex-Works (EXW) price to DDP (Delivered Duty Paid) and everything in between. For the current 2010 Incoterms go to www.iccwbo.org