Freight forwarders are a very important link in the supply chain. In other words, a supply chain is incomplete without freight forwarders. Before we delve deeper into their role, let us first understand who these freight forwarders are.
Who are freight forwarders?
Freight forwarders are companies who act as intermediaries between the company shipping the goods and the final destination to which the goods are shipped to. However, freight forwarders don’t own any mode of transport yet are capable of o?ering multiple modes of transport for a particular shipment. They come up with unique solutions for their customers’ shipments so that their customers can focus on the core competencies of their businesses.
Whether freight forwarders are based in India or any other part of the globe, their role in the supply chain more or less remains the same. In order to establish a clear picture of the role of freight forwarders in India, let us simplify the complete freight forwarding process. The process is illustrated below and the major points of intervention are discussed in detail.
What is the freight forwarding process?
The freight forwarding process involves multiple points of intervention such as:
Export haulage - At this point, the transfer of consignment takes place from the original source i.e. manufacturer’s place to freight forwarder’s warehouse.
Export customs clearance - This acts as a crucial stage in the entire process of freight forwarding because at this stage, the consignment receives clearance or go-ahead for their shipment.
Origin handling - Inspection and validation of cargo takes place at this stage against the booking documents.
Import customs clearance - This stage involves the unloading of cargo and customs clearance paperwork which is inspected by respected authorities.
Destination handling - Once the consignment reaches the destination, this stage involves handling of it including transport of the shipment to the import warehouse.
Import haulage - This refers to the final stage when the consignment is transported from the import warehouse to the buyer’s place.
Typically, freight forwarders in India and abroad deal with a significantly high volume of documentation work as they need to be abreast with all the information required by carriers, country of import, export, and/or transshipment. Let’s take a quick glimpse at the documents:
Commercial invoice
Packing list
Certificate of origin
Export shipping bill
Credit letter (if applicable)
Insurance certificate
Bill of lading
Declaration (if hazardous cargo)
In terms of the type of proprietorship models available in India, freight forwarders in India including freight forwarders in Mumbai set up their business unit. But that’s not all, they must register and obtain mandatory licenses essential for business operations in India. The regulatory landscape in India is quite different from what it is in other countries. Keeping certain checks in mind, the freight forwarding industry in India is evolving at a drastic pace and is envisioned to be one of the greatest contributors to the estimated market size of US$380 billion of the Indian logistics market by 2025. With the aid of digitization, freight forwarders in India have made freight booking accessible and easier than ever before!
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