What Are the Disadvantages of a Freight Forwarder?

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A freight fowarder is used for shipping products.
A freight fowarder is used for shipping products. (Image: Felipe Dupouy/Lifesize/Getty Images)

When you have to ship products, it can be done in one of two ways. You can do all the freight forwarding yourself, or contract a professional freight forwarding company. Doing it yourself involves negotiating rates with trucking and shipping firms. Also, you have to arrange for warehousing and taking care of the legalities. A good freight forwarding company does all this for you, making your life easier. A bad freight forwarding company, however, can make your life a lot harder.

Entrustment Issues

You are entrusting your products to a stranger when contracting a freight forwarding company. Even though you picked a company that appears stable and competent, you can never really be sure until the shipment actually arrives at your customer's dock. It's difficult to discern which is truly a good freight forwarder, since all claim their service is the best.

Data Deficiency Issues

Michael Comerford and Peter Denno of the Automotive Industry Action Group (AIAG) pointed out that data deficiencies affects freight forwarders. Writing about the automotive industry,Cornerford and Denno reported that data deficiencies can delay 15 percent of all ocean shipments. Some common examples of data deficiencies would be data and documentation lost in translation between languages, or data simply lost by incompetence. A good freight forwarding company has few data deficiency issues. A mismanaged freight forwarder, however, has a great deal of deficiency.

Price Gouging

If you do all the freight forwarding and documentation filing, costs can be controlled. With a freight forwarder, you never really know how much of a markup in services the forwarder is adding on. For example, a trucking company may charge you $3,000 to deliver a shipment. If you contracted an unethical freight fowarder, he may state the trucking company is charging $5,000.

Product Loss

The Musson Freight Fowarding Company states that loss is sometimes an inevitable part of shipping. If you entrust a freight forwarding company to do all the packing and shipping, you do not have control of how the items were packaged in the container. If the freight forwarding is good, no problems develop. If the freight forwarder is inept, losses become excessive.

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