The Essentials of International Freight Management
Freight management refers to the process of overseeing and managing the delivery of goods and commodities. Any company regardless of size that is in charge of cargo movement has to decide on the means to deliver freight on time to its intended destination. This must be at the lowest cost as well. In the transportation sector, such companies are called shippers even when they use third parties for shipping goods. Local and international Freight Management is a part of the logistics process.
When you say logistics process, it covers the entire supply chain operation, from warehousing to supplier relationships and inventory control. As a shipper, you may take care of all these processes or outsource them, e.g., freight management.
The Operations of Freight Management
Several operations compose freight management. The following are the major ones:
Carrier selection- When you use a third-party carrier, you have to choose the right one, setting the rates, expectations, and terms.
Documentation and regulations management- This aspect includes ensuring transparency and freight visibility. A carrier usually has vehicle tracking, but you can also track an individual package or container.
Route optimization- This entails choosing the most efficient route and transport mode. It also includes assigning drivers, and vehicles, and balancing the load. This is highly necessary for running an owned fleet since the carrier will choose the best routes possible.
Documentation and regulation compliance- This aspect includes preparing the appropriate paperwork as well as managing the insurance policies. It also involves ensuring government compliance with goods and transportation.
Data gathering and analytics- This aspect focuses on gaining insights from the collated data and optimizing the shipping process.
Freight operations can be handled in various ways depending on the goals and capabilities of the company. It can be done by a private carriage or by third-party carriers. Some companies like those brands that have high volumes of products and those that have less popular final destinations benefit more from having their fleet and managing drivers by themselves. Usually, this includes road transport, but large companies may have their ships or aircraft.
On Freight Brokers and Freight Forwarders
Freight brokers often don’t work with cargo. They often help shippers to connect with carriers and find the best deals they could benefit from. Freight forwarders, on the other hand, play a more active role. They take on responsibilities like paperwork preparation or documentation, warehousing, and packaging. They sometimes have a fleet or containers. They may also ship under their bill of lading. Freight forwarders are not like freight brokers. They can provide international freight management. In the US, freight forwarders and brokers must have a license from Federal Motor Carrier Safety Administration (FMCSA).
A Transportation Management System (TMS) is a software tool that is often used for managing relationships with carriers, forwarders, and brokers.