What does cross-border e-commerce freight forwarder do?

Freight forwarding, also known as freight forwarding, is the intermediary, broker, and transportation organizer between the cargo owner and the carrier. The service scope of international freight forwarders includes foreign pickup, foreign customs declaration, booking, packaging, domestic customs clearance, domestic warehousing, domestic delivery, etc.

Traditional freight forwarding business mainly provides port to port TO B services, while B2C cross-border e-commerce logistics provides end-to-end and door-to-door TO C services, with a longer business chain and more involved links. Cross border e-commerce logistics has transformed the traditional business model of freight forwarders, and logistics services are gradually becoming express delivery.

According to data from Guohai Securities, in 2020, the proportion of cross-border e-commerce imports and exports to the total import and export value of goods trade reached 38.86%, a year-on-year increase of 5.57 pcts, and the proportion continues to increase.

There are generally two modes of cross-border e-commerce freight forwarding:

1. Peer freight forwarder: Most of them are agents, serving as intermediaries between direct freight forwarders and carrier companies (ships, planes, railways, express delivery, and trucks);

2. Direct customer freight forwarder: mainly liaise with shippers (customers), develop customers, and provide quotes based on customer needs. Connect with fellow freight forwarders again.

With the booming development of cross-border e-commerce, freight forwarders not only get a piece of the pie, but good freight forwarders also make a lot of money.

According to the international logistics comprehensive service platform Souhang Network, in the first half of 2021, freight forwarding companies experienced strong profit growth:

Kuehne+Nagel reported a revenue of $14.4 billion in the first half of the year, a 25% increase from before the 2019 pandemic, and a net profit of $830 million, twice the amount in 2019.

DSV Panalpina's revenue in the first half of the year was $11.4 billion, an increase of 78% compared to 2019, and its net profit was $775 million, three times that of 2019, surpassing DSV's full year profit in 2020.

There was also a popular joke in the cross-border circle before: one car per week and one apartment per six months. That's the freight forwarder. During the peak season of cross-border logistics, there is a significant premium in logistics costs, and transit freight rates naturally increase. Some freight forwarding companies take advantage of this opportunity to increase prices and speculate on container speculation, greatly increasing the logistics costs of sellers.

So, finding reliable freight forwarders is crucial. So, how to find reliable freight forwarders? Haiwai Yi summarized several practical tips:

1. Firstly, it is necessary to select freight forwarding companies that have been established for at least 2-3 years;

2. Request a price list, compare multiple companies, choose products with high cost-effectiveness, and carefully read the promises of the freight forwarding company. Do not exaggerate the timeliness;

3. Choose freight forwarders with advantageous routes based on your market. For example, if you specialize in the North American market, choose freight forwarders with advantageous routes in North America;

4. Choose a professional and patient account manager;

5. Prepare at least two freight forwarders, and if one freight forwarder has any problems, the other freight forwarder can make up at any time.