Allowing a supplier to handle your freight forwarding is risky for more reasons than you can imagine. For example, most suppliers will mark up the cost of freight forwarding to pad their profits. Or they will charge the rate for a premium shipping company, but employ a low cost alternative, and pocket the difference in cost. You will also have no control over routing, and may find your cargo moving via a slower route, again typically at a cheaper cost benefitting the shipper. Settling damage/insurance claims can be very difficult, as the shipping contracts were completed at origin and if cargo is compromised at destination, you are relying on parties based in foreign countries to settle an issue that is locally focused.
Your problems multiply if there are extra costs for storage, demurrage or special charges due to negligence. Because you are not controlling the freight and do not have an arrangement with the carrier and/or forwarder, you will have little negotiation power in dealing with such issues.
Remember this the next time a supplier offers to handle shipping. The smarter alternative is to take control of your freight by appointing a freight forwarder who offers the full service – communication, tracking, shipment updates, expediting and customs clearance – which you will never get when your supplier calls the shots.
For more information, contact David Lychek, Manager – Ocean & Air Services.
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