How to start a freight forwarding business

Written by martin muchira
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How to start a freight forwarding business
A freight forwarding business requires contacts and know-how. (cargo image by Slyadnyev Oleksandr from Fotolia.com)

A freight forwarding business organises shipping of various goods through different transportation methods by land, air and water. To be successful, it is important you be well versed in importing and exporting. Good contacts are essential. Although there are a lot of players in this industry, there is a lot of room for newcomers due to its size.

Skill level:
Moderate

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Instructions

  1. 1

    Register your company as a freight forwarding company. This is according to the business registration regulations in the freight forwarding industry.

  2. 2

    Get licensed. You need to be licensed as a carrier for all the states you work in. If you are an international freight forwarder; you need to get licensed as a carrier in all the countries you operate in. For instance, freight forwarders involved in international ocean shipping in the US are licensed by the Federal Maritime Federation. Freight forwarders involved in air shipping are licensed by the International Air Association (IATA) while freight forwarding companies that deal with road transport are licensed by Federal Motor Carrier Safety Administration (FMCSA). Freight forwarders in Britain do not need to be licensed but most forwarders are members of the British International Freight Association (BIFA) , as outlined below under Reference 5.

  3. 3

    Develop a logistics system that will allow tracking of each shipment in transit. This will help ensure timely deliveries. A logistics system must be able to supply suitable packaging for whatever size job is taken on, and ensure packing is done properly.

  4. 4

    Register with a freight forwarding association. International freight forwarding associations include the International Federation of Freight Forwarders (FIATA) and Institute of Export. They will help you network and gain knowledge about state of the industry. Associations also provide training.

  5. 5

    Get staff. You need to ensure that the agents you employ to work for your freight forwarding company are properly licensed for the industry they work in. For instance, the employees should have maritime licenses if they deal with water shipping.Maritime licenses are obtained from the Federal Maritime Commission in the US by submitting form FMC 18 and paying a fee of $ 825. The International Air Transport Association and Transport Security Administration (TSA) approves air shipments hence, lending credibility to the airfreight forwarding businesses (see Reference 4). You also need to hire accounting and legal staff since a freight forwarder holds the power of attorney on behalf of his clients. In addition, you need to hire custom specialists who will handle any international shipments.

    How to start a freight forwarding business
    Get staff for your company. (office staff image by Goran Petak from Fotolia.com)
  6. 6

    Market your company directly by contacting firms or individuals who need your services. You need to liaise with freight brokers, motor carriers, shippers, import and export brokers. Be friendly and patient.

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