Managing your freight forwarders effectively will help to improve supply chain compliance. Many exporters and importers in the U.S. who are at risk of compliance failures do complain of their inability to manage freight forwarders and customs brokers effectively. But little did they know that they wield a lot of control over them. Changes in regulations have made compliance a requirement.
We are more digital nowadays in our data input, this has led to the reduced paperwork thereby making it easy to access information. This advancement in technology also comes with higher error visibility to the regulators, increase in fees and penalties, and more responsibility for the trade community.
The primary cause of compliance problems is the lack of awareness and inadequate training and information about needed requirements.
Nowadays we have many companies struggling to understand the regulations and meet up to requirements; it’s entirely possible to place the responsibility on freight forwarders. Make them accountable for accuracy, reporting, classification, and recordkeeping, although this business practice is not recommended in the U.S. Freight forwarders rely on information they get from the exporter.
Choosing a Freight Forwarder
Before one can manage a freight forwarder, one needs to first choose a freight forwarder. While selecting a freight forwarder always place quality and credibility above logistics cost and cheap rates. This is because choosing the best freight forwarder will go a long way to decide how smooth your supply chain operation will go.
While planning to choose your freight forwarder, you need to put some factors into consideration. Firstly, write down a list of requirements you desire. This could include knowledge and experience about your product, destination country, and shipping method. Ensure that the staffs of the freight forwarders are well trained in commerce, record keeping, documentation, etc.
The freight forwarder also needs to have a reasonable level of communication whereby regular updates are being passed across.
A business or companies should also keep a reasonable amount of freight forwarders as one should not have more than two or three forwarders as a large number can be difficult to manage efficiently, and it can cause more good than bad.
Define the role and responsibilities of a forwarder in your chain of supply by putting power of attorney in place. You also need to carry out regular evaluation of the freight forwarders staff to enable you to determine their capabilities.
A Mission to Manage
After a freight forwarder has been rightly selected, the next responsibility is to manage the service efficiently. Here is some important aspect you need to manage efficiently.
- Efficiently manage established communication guidelines.
It’s very germane to create and maintain an open channel of communication with your freight forwarder. Discuss the needed documents and expectations up front. Provide the detailed documentation as to when required by your freight forwarders staffs.
- Have a structure of reporting any potential non-compliance issues.
Ensure that your process of communication includes prior shipment notification. For exported products make use of a Shipper’s Letter of Instruction to communicate shipment details.
Other things to consider when managing your freight forwarders includes: getting a complete copy of the transaction, audit received documents and maintaining strict control on AES fillings.
Ted Frank, Montreal
Global Sky Logistics