Business

Challenges Faced during Freight Forwarding

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The life of the export and import industries is dependent on freight forwarders, also known as freight forwarding companies. These businesses facilitate the import and export of goods by acting as middlemen between the shipper, you, and transportation facilities like shipping vessels. Freight forwarders do not handle cargo by ships only, as is the popular misconception. Ocean shipping, trucking, railway cargo delivery, and even air freight are the transportation services offered by these companies!

What do Freight Forwarders actually do?

  1. They take care of the consignment storage and delivery.
  2. They provide services such as arranging shipping and export paperwork, cargo bills, freight costs, and insurance claims management.
  3. They negotiate the legislative challenges that come with new innovations in every area or state, and they keep up to date about how to deal with them so you aren’t bothered.
  4. They guide you about the banking processes and the transfer of money across different states and regions effectively and with minimum costs
  5. They’ve built relationships with carriers in all of these different modes of transportation, and they’ll negotiate with them to get you the best price for moving your product. They handle all of the bids and choose the one that provides the best combination of reliability, pace, and cost for your business.

Challenges faced during Freight Forwarding

Employees of a freight forwarding company

  • Fuel Costs
    Due to the COVID19 pandemic, oil prices have soared in the international market, thus making shipping expensive. Finding ways to stabilize the shipping while making a profit is one of the biggest challenges faced by freight forwarders today. They are experimenting with alternative fuel sources, efficient travel routes, and electric transport vehicles. However, all of these changes will take at least a few years to be implemented, and hence do not solve present issues.
  • Environmental concerns
    Freight forwarding companies are taking a lot of heat for polluting the ocean with oil spills and unethical waste disposal. They also release a huge amount of toxic chemicals into the air through their land, air, and ocean-based transport vehicles. The pressure by international and national organizations to go green has forced them to invest in sustainable, eco-friendly procedures. However, at present, this is costing them a lot of money in research and development, and finally execution
  • Ocean Volatility
    Due to the unpredictability of the ocean freight forwards is under threat of the boats being sunk or the goods being damaged during transportation. In areas with high piracy incidents, further security measures have to be arranged to protect the consignment.
  • Driver shortage
    Long-haul drivers are at the heart of the trucking industry. However, most people do not want to drive across continents and live in their trucks. Furthermore, trucking has been a traditionally masculine workspace. Once drivers retire, it is hard to find replacements. The industry needs to attract new workers.
  • Government and Intl. Regulations
    With laws changing with every EEZ and different regulations for customs and shipping being brought forth every other day, regulating international shipments is extremely complicated. A centralized system that can navigate these regulations does not exist and hence, navigating customs brokerage requires a lot of skilled labor force, which is hard to come by.
  • Inefficient transport infrastructure
    A lot of roads and shipping pathways need to be optimized for new transport vehicles and their requirements. However, this optimization is expensive, so a struggle between the path and the technology update is an ongoing challenge for freight forwarders.

Because of these above-mentioned reasons, freight forwarding companies are finding it hard to stay afloat. 

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