Saturday, 20 February 2016

WHY FREIGHT FORWARDERS ARE INDISPENSABLE IN INTERNATIONAL BUSINESS.

Let Tectono Business Review start by explaining what freight and freight forwarder imply. Freight can be described as the carriage, shipment, transportation of goods or consignments. A freight forwarder can be described as a handler of export shipments, i.e. a company that specializes in shipment of goods for a fee. A freight forwarder can also be described as an organization or company that deals with haulages, logistics, transportation and door-to-door delivery services of goods.

Tectono Business Review can confidently say that it is a misnomer to call a Clearing and Forwarding Agent a Freight Forwarder. This is because a Clearing and Forwarding Agent has a responsibility of Clearing Cargoes, Consignment and goods out of the ports and forwarding it to the Consignor i.e. the importer. However, in Nigerian context, a freight forwarder seems to be involved in both import and export logistics. Many freight forwarders are also involved in cargo clearance from the port, although the two are distinctly different from each another. Freight Forwarder can be defined as an organization, company, registered with Nigeria Customs Services, to deal with carriage, shipment and clearance of goods both in imports and exports.

While the freight forwarder doesn't actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden. Freight forwarder guarantees that products will get to the proper destination by an agreed date, and in good condition. She utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. He negotiates the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability. He generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder's bid, the freight is readied for shipping. The freight forwarder then undertakes the responsibility of arranging the transport from point of origin to destination.

A freight forwarder generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder's bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination. One of the many advantages of using freight forwarder is that it handles ancillary services that are a part of the international shipping business. Insurance and customs documentation and clearance are some examples. As a consolidator, a freight forwarder might also provide Non-Vessel Operating Common Carrier (NVOCC) documentation, or bills of lading. Warehousing, risk assessment and management, and methods of international payment are also commonly provided to the client by the freight forwarder. The pre-requisite of getting cargoes, containers and general goods cleared from the Port is the possession of original Bill of Lading. Bill of Lading can be defined as an evidence of carriage of a consignment, cargo or goods on board a vessel. It is also a receipt of payment issued to a consignee by a shipper/shipping agent.

Bill of Lading is relevant to clearance of goods/cargo in the sea port while airway bill is also important to clearance of goods/cargo in the airport. The issuance and possession of bill of lading has legal interpretation in law. Issuance of bill of lading is described as a contract of carriage between the shipper and the consignee/importer while the possession of the original bill of lading is tantamount to the possession of the goods itself.

The possession of the original bill of lading will assist the freight forwarder to answer lots of questions which he/she needs to clear the cargo/consignment out of the port. This information is the name of the importer as manifested on bill of lading, type of cargo/consignment as manifested in the Bill of Lading. i.e descriptions of cargo,  port where the cargo/consignment is discharged, marks and number/container number, number of items in the cargo/container, weight of the cargo/consignments and bill of Lading number. These information are important in assisting to facilitate the clearing of the cargo/consignment/goods.

It is the sole responsibility of the freight forwarder to open form “M’’ for his/her consignee/importer. Since we are in the era of destination inspection of cargoes, form ‘M’ must be opened before any cargo is cleared out of the port. The freight forwarder uses the invoice supplied by the importer and the bill of lading to process the form ‘M’ in a commercial bank.

Depending on the kind of cargo, consignment or goods, the other basic documents needed after the payment of duty and other charges are final invoice, packing list where necessary, Type SGD attached with the following payment schedule: Receipt of payment and Certificate of Entry with the copy of Bill of Lading. The freight forwarder is expected to lodge the Complete Entry with the Customs processing centre Unit for ASSYCUDA++ processing