1. Forwarding Business Background
2. Industry Overview
3. Demographics and Psychographics

A forwarding business is used to transport goods to an international location by forwarding it from another shipping company. The forwarding business is a continually growing industry, jumping up more than 24 percent in the past 10 years, according to the U.S. Bureau of Labor Statistics.

Freight forwarders are responsible for a number of duties involved in the transportation of goods such as:

  • Coordinating multiple modes of transportation
  • Gathering necessary pricing
  • Carrying insurance on the shipments
  • Warehousing freight until it needs to ship
  • Dealing with trade and customs issues
  • Understanding and following export trade regulations
  • Preparing all transport documentation

Through knowledge in logistics, a freight forwarding company will be able to affordably move freight to international destinations while complying with all trade and country laws.

Though you cannot obtain a degree in freight forwarding, you will often receive on-the-job training. Some vocational schools do offer courses and workshops about freight forwarding and seminars on changing developments and updated regulations so that you can keep current with industry requirements.

When dealing with international trade and export, it can require an upfront significant investment. To handle your job properly, you will need to be a good:

  • Communicator
  • Administrator
  • Multi-tasker

Freight forwarders will be involved with a number of duties such as:

  • Preparing paperwork, including bills of lading, customs forms, and letters of credit.
  • Handling quotes and invoices for shipping rates.

Forwarders will need to have extensive knowledge regarding export regulations, as customers will rely on them to know whether certain products can be shipped to or travel through specific locations. They will also need to know the various Commodity Classification Automated Tracking System, which will help them determine the pricing for customs.

Freight forwarders can also be deemed ocean transportation intermediaries (OTIs). This means that they will need to have knowledge about the regulations established by the Federal Maritime Commission.

There are other regulations that a freight forwarder may need to possess, such as accreditation from the International Air Transport Association if they handle international air freight. You may also be subject to regulations with the U.S. Department of Transportation's Federal Motor Carrier Safety Administration. This entity has jurisdiction over all surface freight services.

Freight forwarders can cover multiple modes of transportation, though many will specialize in one of the following fields:

  • Air
  • Rail
  • Ocean
  • In-land waterways

Forwarding Business Background

In the freight-forwarding industry, the forwarder can act as both the agent and carrier, setting up the transportation and actually moving the product from one place to another. Freight will always need to be transported, which makes the freight industry stable and profitable for many companies. It can be a great industry for entrepreneurs looking for a stable business, though it can take hard work and diligence to be successful.

Industry Overview

A freight forwarder may also be referred to as a:

  • Marine shipping agent
  • Customs brokers

As there is an increased demand for freight services, freight forwarding services will continue to emerge as a market and are expected to continue to grow significantly in the next five years. There are few industry entry barriers, such as trade issues and government compliance. Areas that have the most success with freight-forwarding services are states with high levels of trade, commercial activities, and manufacturing. Some of the areas seeing the most growth include:

  • Southeast
  • West
  • Mid-Atlantic

Demographics and Psychographics

Two important factors to consider when starting a freight forwarding business is to know the types of customers you plan to provide your services to and the type of freight and volume you wish to move. Performing industry research can help you answer these questions and set your new company up for success.

Determining the volume that you can effectively move is vital to ensure you provide your customers with the service they need in the most efficient way possible. Knowing this will also help you when you purchase your equipment. Though becoming a freight forwarder is simple, it can require education, licensing, and obtaining a freight broker bond.

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