Break Into the Freight Forwarding Field
A freight forwarder finds the best way to get materials from point A to point B, but does not actually produce any of the cargo or move it himself. It's a lot like being a travel agent for cargo. You work with clients to find out exactly what they need, for example, an orange grower in Spain needs to ship several tons of oranges to New York within one week of the time they are harvested. A freight forwarder finds the best deals on a cargo ship to get them across the Atlantic, and then on trucks to pick them up at the dock and take them to the client in New York.
Freight forwarders have been around for centuries, but in the past, they usually helped manage the complicated process of international shipping.
Within recent years, freight forwarding has become more common in cargo transportation within the US. Contracting freight forwarding companies takes the burden of arranging transportation off the manufacturer and allows them to focus on making their product.
Forwarders specialize in building and maintaining relationships with companies in different types of hauling: rail, ship, ground and air. They have to be flexible and think creatively, because the dynamics of freight are always changing. For example, sometimes it's less expensive to move freight a long distance by rail and a short distance by truck. When diesel prices drop, however, it might be faster and less expensive to ship by ground.
Freight forwarders have the best of all worlds. They don't need to buy or maintain a fleet of trucks, or hire drivers, or build anything. All they really need is a laptop and a telephone to seek out the best deals. They take on very little risk, but get to take a percentage of the revenue from every load.
At present, there is no law mandating the percentage of the revenue forwarders can take, and they are not required to tell their shipping partners how much the load is really worth - which has led to a situation where some forwarders are taking large percentages of the revenue and leaving their haulers with only a tiny cut. For the moment, that means forwarders are making a huge profit margin while the actual shippers struggle with heavy overhead and a low margin.
However, this equation is likely to change in the future if demand for shipping increases (because forwarders will have to pay shippers more to get anyone to take a load) or if the government begins requiring forwarders to disclose how much profit they are making per load.
Did you Know:
- Companies like FedEx, DHL and UPS changed the freight forwarding market in the 1980s by offering a much wider range of services to clients.
Skills Freight Forwarders Need
To work in the freight forwarding field, you need to be a flexible, creative thinker. Organizational skills are critical, and so are interpersonal relationships - both for building a client base and maintaining a list of shippers who can move your freight. The ability to communicate in at least two languages is helpful, because many forwarding companies deal with international cargo.
Freight forwarding companies are looking for people to specialize in getting new customers, finding shipping partners, maintaining good customer relationships and handling customs requirements. This industry values experience: college degrees are not always required, but two to five years in the industry and a thorough knowledge of the ins and outs of shipping is highly valuable.
Entry-level jobs in freight forwarding might involve routine office tasks. If this is a field that interests you, the best way to get your foot in the door may be to get a CDL and start learning the shipping business from the tires up.
- Freight forwarding companies help their customers arrange shipping by sea, land and air.
- Freight forwarders do not generally own fleets of trucks or ships, and they don't usually maintain their own warehouses.
- Prior experience in the freight industry is highly valued in freight forwarding jobs.
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