Questions for a Freight Forwarder

These are questions that you as an exporter should consider in either the selection of a freight forwarder or assessing your current business relationship.

Table of Contents

1. Customs Clearance
2. Export Packing
3. Freight Rate Quotations to Companies
4. General
5. How do I Find a Forwarder
6. Marine Insurance
7. Modes of Transport
8. Shipping Documentation
9. Other

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Customs Clearance

• Are all forwarders able to clear goods through foreign customs?
• Do they normally have a customs broker?
• What do customs brokers do and how are they paid?
• Who pays duties and taxes and when are they due?
• How do foreign customs officials assess a duty rate?
• What does in-bond mean?
• What is the significance of your "limited power of attorney"?

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Export Packing

• What are the different types of export packing?
• What is done to keep moisture from the product?
• What kinds of packing are used to protect shipments from damage?
• When are these types of export packing used?

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Freight Rate Quotations to Companies

• What is the process that the forwarder goes through to get a freight rate and shipping dates for a customer?
• Can you explain the difference between LCL, FCL, RoRo, break bulk, etc.?
• How long is a rate good for?
• What is the rate based on (i.e. volume, weight, commodity)?
• Are there formulas used to quote rates?
• When a forwarder’s sales representative goes to call on a client, what normally happens?
• When is it advantageous for an exporter to go direct to a carrier? What kinds of skills would the export shipping specialist need in order to do that?

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General

• What are the different divisions of your company?
• How do forwarders make their money (i.e. percentage of shipments, documentation, packing, revenue from carriers, etc.)?
• Do all forwarders provide the same services?
• What questions should an exporter ask a forwarder to understand what services they provide and the costs?
• In which countries do you maintain correspondent / affiliate relationships and with whom?

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How do I Find a Forwarder

Freight forwarders are numerous in most major markets.  All freight forwarders are licensed by the Federal Maritime Commission and bonded.  If you feel that your forwarder has made a major mistake, you may seek reimbursement through their bond.  Here are some suggestions on how to find a forwarder:

• Ask other exporters

• Attend international business functions

• Check in the Yellow Pages under freight forwarding or foreign freight forwarding.

• Ask your local office of the US Department of Commerce.

The following are several search engines to help you find a freight forwarder in your area:

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Marine Insurance

• What are the different types of marine insurance?
• What type do most customers use?
• When is contingency insurance worthwhile?
• What do the different types of insurance cost?
• How is the client billed for insurance?
• How does the client track insurance policies and claims?
• What is the process for claiming lost or damaged cargo?
• When a party receives a shipment do they have a period of time in which to inspect it? What do they need to note on documentation if they have to inspect it later? If they identify damage or loss right away?
• On which document do they note these things?

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Modes of Transport

• What are the differences between conference, non-conference, NVOCC, tramp vessel, etc.?
• How do you determine what stops will be made to a destination? How do you determine when transshipment is required?
• When a customer is doing a quotation to a foreign buyer what should they be asking the forwarder to avoid problems down the line?
• What are the advantages of shipping via air, ocean, truck, rail?
• Is there a point of volume or weight when air or ocean is preferential?
• What kinds of products normally never go by ocean?

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Shipping Documentation

• What kinds of documents are done by a forwarder?
• How do you check to see that the documents are consistent with the letter of credit or order?
• Should the customer provide a copy of the letter of credit to the forwarder in advance?
• Are customers billed per document? What is the normal cost for various documents?
• Do you have any customers that transfer their documents to you electronically?
• What is the relationship between the document processing by the customer, forwarder and bank?
• Are you familiar with the US Export Administration Regulations, the International Traffic in Armaments Regulations and the Office of Foreign Assets Controls?
• Do you have a current edition of each of the following publications:
  • "US Export Administration Regulations?"
  • "Statistical Classification of Domestic and Foreign Commodities Exported From the United States", a.k.a. "HS" or "Schedule B"?

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Other

• What is the status of Harbor Maintenance Fees?
• What new trends are you seeing in the industry?

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Date Updated: April 23, 2012