Freight Forwarding Guide – What it is and How it Works

Have friends, customers, or even agencies approached your business for a freight forwarding option, and you couldn’t make sense of what the term meant? We’ll help you fix that in this article.

Normally, the word freight brings to mind transportation of goods via large vehicles. However, forwarding makes it entirely complicated. Well, freight forwarding is surely more than the movement of goods.

Below is an explanation of this complicated term and how it works; maybe you’ll see reasons why your business needs these services ASAP!

What Is Freight Forwarding?

Freight forwarding is an option that comes to the fore when you deal with products with customers scattered around the globe. This service can be defined as the planning and organization of the transportation of goods outside of the product’s home country on behalf of companies. Because the service is aimed at properly shipping a company’s goods so that it arrives at the specified date, it involves other activities like warehousing, insurance, and customs clearance.

Freight forwarders are the individuals who work in the companies that deliver these services. They are experienced middlemen who facilitate the trans-border shipping of goods for companies, taking charge of most or all of the processes.

How Does Freight Forwarding Works?

In six stages, here’s a summary of how freight forwarding works.

1. Export Haulage

The first stage involves the movement of the company’s goods from the factory to the warehouse of the company via truck or train. This activity can take anywhere from a couple of hours to a week, depending on the distance between the two locations and the nature of the items being transported.

2. Goods Checkpoint

Once the goods have been moved to the company’s warehouse, they will be checked. The purpose of this check is to ensure that the goods received are in the right quantity and good condition.

3. Export Customs Clearance

Freight forwarding

Being that the goods are to be transported out of your country, they will need to be cleared from your country. Custom brokers take care of the process and they will need information about the cargo and its supporting documents. Not all freight forwarding companies offer this service. If you choose one that doesn’t, it’s left for you to hire a third-party customs broker service for this stage.

4. Import Customs Clearance

On the side of the destination country, the shipment would also need to be cleared once it arrives. The officials there will check for import customs documents before clearing the shipment. It’s best when the process starts before the shipment arrives. A good company will perform this process before and not when the cargo arrives.

5. Arrival and Handling

AT this point, the cargo has arrived at its destination. Transfer of documents about the cargo happens at this point. One of such documents the company will receive is the carrier bills. With all the documents intact, the freight forwarding business will then carefully transport the goods to their warehouse.

6. Import Haulage

Just like at the beginning, where the goods move from the factory to the company’s warehouse, in import haulage, the goods are moved from the warehouse in the good’s destination to the ultimate receiver of the goods. The freight forwarding company may choose to perform this function or the consignee can arrange to collect the goods themselves.

What Are The Environmental Licenses That Interfere Directly In The Operations Of The Companies?

If a company commences operations at its premises without due environmental reports, it risks having to stop all work and still pay fines, which may vary according to the degree of the infringement. At the same time, if the environmental licenses are not updated according to new legislation, or do not formalize changes in the structure of the operation itself, the company also runs the risk of having to bear very high costs and even changes in its infrastructure. Due to assessments made by regulatory bodies that may render their performance unfeasible.

This is not to mention the social and environmental issue, especially in the disposal of effluent treatment. After all, today, companies that seek the support of an ecological consulting and manage to convey to their customers their concern for the environment and the protection of public resources usually ensures a better image in the market. But what is Environmental License anyway?

The Environmental License is the procedure in which the public power represented by environmental agencies authorizes and accompanies the implementation and operation of activities that use natural resources or that are considered useful or potentially polluting. It is the obligation of the entrepreneur, provided for by law, to seek the environmental license from the competent organ from the initial stages of its planning until its effective operation.

The procedure is mandatory throughout the national territory and the actual or potentially polluting activities, such as the case of treatment of liquid effluents, can not function without proper licensing. It is through the Environmental License that the entrepreneur initiates his contact with the responsible organ and becomes aware of its obligations regarding the adequate environmental control of its activity.  After this, companies that operate without this authorization are subject to the sanctions provided by law, including punishments related to the Environmental Crimes Law, established in 1998: warnings, fines, embargoes, temporary or permanent stoppage of activities.

The market increasingly requires licensed companies that comply with environmental legislation, especially on issues of broad visibility, such as the treatment of liquid effluents. Also, government funding and incentive bodies, such as the BNDES, condition the approval of projects to the presentation of the Environmental License.

This is a document with a defined period of validity that the environmental agency establishes rules. Among the main characteristics evaluated in the process, we can highlight the potential of a generation of polluting liquids (dumps and effluents), solid wastes, atmospheric emissions, noise and the potential risks of explosions and fires. Upon receiving the Environmental License, the entrepreneur assumes the commitments for the maintenance of environmental quality in the place where it is installed, starting with the destination of the effluent treatment.