How to Start Freight Forwarding Business – A Complete Guide

Filed in Articles by on July 18, 2022

– Start Freight Forwarding Business –

A freight forwarding business also known as a Non-Vessel Operating Common Carrier (NVOCC), is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, or customer, or final point of distribution. 

In the freight business, there are two categories which include freight forwarding and freight brokers.

Becoming a freight forwarder means you will be responsible for the transportation of goods and commodities to their target destination using any means as devised by you.  

You could use Air, land, or sea route depending on your choice of specialty. Freight forwarding business is commonly known in the business language as third-party logistics providers.

Millions of businesses, both big and small, have one way or another need to ship goods either within the territory of the United States or abroad.

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With this number alone, the role of a third-party logistics provider is very important. 

They are the ones who are responsible for the completion of a transaction that involves goods or the coming back and forth of important document materials. 

To start a freight forward company demands almost the same level of diligence as do any other company.

You won’t wake up one morning and tell yourself “delve into freight forwarding, you’ll make cash” when you know absolutely nothing about the business. 

How to Start Freight Forwarding Business

Need advice on how to start? Just keep reading.

1. Choice

Yea, well your decision or choice to start this business is what opens the way for your interest in the business.

Be sure your decision to start this business is unwavering and focused if you really wish to make it in the business to an expected height and not some business crumbling just two months after incorporation. 

2. Find Out All There is to the Business

Before you draft down a business plan or before you even set out to do anything, you must have all gotten all the needed skills to excel in the business.

This business isn’t an all-comers business; it requires management and a logistic approach when dealing with people

So you should learn about all there is to the freight business before it changes into the freight business. 

3. Make a Business Plan

A concise business plan is very essential for this very line of business if you are not ready to make expensive mistakes.

Business plans help you manage the business well, the expense, and all other movements that will be made. 

4. Source of Income

After all the aforementioned plans have been made, you need to plan your funding well.

You can borrow or lend from family members and banks in order to purchase the equipment that’ll be needed and subsequently get a lot where you will be parked

Since you’ll be acting as the bridge between the consignor and consignee. 

5. Get a License

This is a very important step you cannot afford to miss; to make your business legal, you are expected to get a license from the Association of Nigeria licensed custom agent office nearest to you to avoid harassment in the nearest future.  

6. Get a Lawyer or Attorney

You sure will need the service of an attorney if you are to have someone to stand in for you when getting a license and when proving the legitimacy of the company. 

7. Get Connected with Shipping Companies

You know a tree cannot make a forest; you will need to get in touch with other shipping companies if you intend to make it in the business or learn more about how things go in the freight business world, like the cost of each shipment, etc. 

8. Get Clients

Get people to know about what you do, and let companies and private bodies know that you can be the bridge between them and their buyers or sellers.  

What You Can Offer as a Freight Forwarder

All you need to know as a freight forwarder

1. He’s The Middleman

The services of a freight forwarder can vary between different companies but the main function of the freight forwarder is to act as a bridge between the client who is hiring them

And various transportation services that are involved in getting the product overseas to the customer. 

Depending on the final destination and the nature of the items shipped, there may be many transportation companies involved in the movement of the items from the supplier to the customer.

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The freight forwarder may have to deal with many export and import issues that could be involved in the movement of the goods. 

The freight forwarder is hired to get the product to the customer by a specific date and in an undamaged state.

The freight forwarder will provide the client insurance services to make sure that if the items do arrive damaged, they will be reimbursed and not liable for the damages. 

2. He’s Responsible For Packaging

A freight forwarder should provide assistance to the customer on how to package their products for export.

Packaging that would normally be used for shipping within the US may not be sufficient for extended transportation where the items may be either loaded in a container or loaded and unloaded several times along the route. 

The item may be allowed to be stored in environments where extreme temperatures or weather may be experienced.

If an item is being shipped via air, then the freight forwarder may suggest packaging that is lighter than normal to keep shipping costs to a minimum. 

3. He’s Responsible for Labelling

Freight forwarders will assist their customers in providing the correct labeling they require for their items.

The correct label will be required to show the precise items in the shipping container, any hazardous items, country of origin, correct weight in pounds and kilograms, port of entry details, and any details that are required in the language of the destination country. 

4. He’s Responsible for Documentation

Documentation is important for the shipment of an item overseas. There are a number of documents that the freight forwarder needs to prepare for the shipment that requires specialist knowledge. 

a. Bill of Lading (BOL) – The BOL is a contract between the owner of the goods and the carrier. There are two types of BOL; firstly a straight bill of lading which is non-negotiable and secondly, a negotiable or shipper’s order bill of lading.

The negotiable BOL can be bought, sold, or traded while the goods are in transit. The customer will usually need an original as proof of ownership to take possession of the goods. 

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b. Commercial Invoice – The invoice is the bill for the goods from the seller to the buyer. It can be used to determine the true value of goods when assessing the amount of customs duty. 

c. Certificate of Origin (COO) – The COO is a signed statement that identifies the origin of the export item. 

d. Inspection Certificate – This document may be required by the customer to certify the goods have been inspected or tested and that the quality of the goods is acceptable. 

When you realize your role as a freight forwarder is important, you’ll be serious and diligent with your business. 

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CSN Team.

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