In today’s interconnected global economy, the importance of efficient logistics has become more crucial than ever. 

Most businesses are directly or indirectly dependent on logistics. However, managing in-house logistics can be a bit challenging for some businesses. 

Therefore, they prefer to outsource the supply chain processes to other third-party service providers. It helps them save a significant amount of money and time. 

Moreover, it also streamlines the overall supply chain operations. But what is the difference between logistics outsourcing and Freight forwarding in logistics? 

In this blog, we shall explore what freight forwarding is and how businesses can benefit from it. But before that, let us learn a bit about logistics outsourcing. 

What Is Logistic Outsourcing? 

Logistics outsourcing means hiring an external service provider to manage the supply chain operations for your company. Logistic outsourcing has become a common trend among businesses these days. 

In the logistics outsourcing business can outsource various supply chain operations to third-party service providers. 

Some common services include warehousing, transportation, order fulfilment, and even reverse logistics. 

Third-party logistics service providers like Cargaison Express can manage all these services for businesses. 

In logistics outsourcing, all the aspects of supply chain operations can be outsourced to third-party service providers. 

What Is Freight Forwarding? 

Freight forwarding means the transportation of goods and materials from one location to another. 

In freight forwarding, the third-party logistics service providers are responsible for the transportation of goods and materials. 

Freight forwarders act as intermediaries between shippers and various transportation services. 

The primary aim of freight forwarders is to ensure the smooth and efficient movement of cargo throughout the supply chain. 

Unlike logistics outsourcing, freight forwarding primarily focuses on the transportation of goods and materials. 

Freight forwarders are only responsible for the transportation of cargo. They are not responsible for services like warehousing and order fulfilment. 

What Are The Roles Of Freight Forwarders? 

Here are a few important roles and responsibilities of freight forwarders. 

• Customs clearance assistance 
• Carrier selection and rate negotiation 
• Documentation preparation and management 
• Cargo consolidation and deconsolidation 
• Route planning and optimisation 
• Tracking and monitoring shipments 
• Providing expert advice on international shipping regulations 

How Does Freight Forwarding Work? 

Here is a step-by-step process of how freight forwarding works. 

1. Export Haulage 

This is the first step in the freight forwarding process. It involves the movement of goods from the shipper’s location to the freight forwarder’s warehouse or directly to the port of origin. The first step in the freight forwarders’ process is also known as “first mile transportation”. 

2. Export Customs Clearance 

For international shipments, before the goods can leave the country, they must clear customs. Freight forwarders help in the preparation of the necessary clearance documents required for international shipments. 

3. Origin Handling 

This is the third step, in this phase, the goods are unloaded, inspected and prepared for international transit. It may also involve consolidating smaller shipments into larger ones for space optimisation and cost savings. 

4. International Transportation 

This is the most important phase in freight forwarding. In this phase, the goods and materials are transported via sea, road, rail or air to their destination country. For the smooth and efficient transportation, optimised routes are selected for cost-saving benefits. 

5. Import Customs Clearance 

In this phase, the freight forwarders assist in the import customs clearance processes. When the goods arrive in their destination countries, they must again clear customs. 

Freight forwarders facilitate this process by preparing documents and paying duties and taxes on behalf of the clients. It also ensures compliance with the local import regulations. 

6. Destination Handling 

In this phase, after clearing customs, the goods are transferred to a local warehouse or distribution centre. A freight forwarder ensures safe and secure transportation of goods to these warehouses. 

7. Import Haulage 

This is the final phase, and in this phase, the goods are delivered to their destination. This phase is also known as “last-mile” delivery. The goods are finally delivered to a dealer, a retailer or an end customer. 

Key Documentation In Freight Forwarding 

Here is a list of importation documentation required in the freight forwarding process. 

Bill Of Lading (B/L) 

A bill of lading is a legal document that serves as a contract of carriage and receipt of goods. 

Commercial Invoice 

A commercial invoice contains the details of goods being shipped, their value and other important documents. 

Packing List 

This document contains a detailed list of items being shipped. 

Certificate Of Origin 

This document declares the country where the goods and products were manufactured or produced. 

Customs Declaration 

This document declares goods to customs authorities for import or export. 

Letter Of Credit 

A letter of credit is a financial document that guarantees payment to the seller. 

Cargaison Express: Logistics Outsourcing Service Provider 

Logistics outsourcing has become a common trend among businesses these days. Most startups and small businesses prefer to outsource their logistics and supply chain management services to 3PL (third-party logistics) service providers. 

It helps them streamline their supply chain processes and save a significant amount of money. 

If you are looking for a professional logistics outsourcing service provider, choose Cargaison Express. We provide end-to-end logistics solutions customised to your business needs and requirements. Get in touch with us to learn more about our services. 

FAQs 

1. What is the difference between logistics outsourcing and freight forwarding? 

Logistics outsourcing includes many services like warehousing, order packing, and delivery. Freight forwarding only focuses on moving goods from one place to another. 

2. What does a freight forwarder do? 

A freight forwarder helps in the transportation of goods from one location to another. They plan transport, handle customs paperwork, and track shipments on behalf of their clients. 

3. Do freight forwarders handle customs clearance? 

Yes, freight forwarders help with customs clearance. They prepare the needed documents and pay duties if required. 

4. What transport modes do freight forwarders use? 

They use different transport options like air, sea, rail, and road. They will help you choose the most suitable modes of transportation. 

5. Is freight forwarding helpful for small businesses? 

Yes, it helps small businesses efficiently send goods worldwide. It also helps businesses save time and money.