5 Major Problems Faced by Freight Forwarders

These days ​Freight Forwarders are facing more competition than ever. Part of the reason is
that many logistics businesses that have traditionally described themselves as something
else say an ocean carrier or even a warehousing business) now provide shipping and
NVOCC type of facilities. To solve these problems better understanding of the industry and
consumer needs are required.

A freight forwarder is a company or an individual that dispatches shipments through

asset-based freight carriers and books or arranges deliveries for such carriers otherwise. He
is not responsible for moving the goods himself but often contracts multiple freight carriers to
move the goods, he acts as an expert in Logistics and supply chain management network.​

The problems faced by Freight Forwarders are:

● The economic crunch has had a negative impact on the freight forwarding industry.
This, in turn, has led to decreased trade-related activities resulting in a low season for
freight businesses.
● Due to the absence of integrated cargo infrastructure, there is a need for streamlining
of customs clearance services for air freight.
● The establishment of the freight forwarding company depends on the country or state
undertaking the business. The market consists of individual customs brokers, large
and small companies which, owing to different freight rates, render the competition
unfair.
 ● Many freight forwarders or companies cannot maintain and support large projects
especially when it comes to providing freight international services because they lack
financial stability. Small businesses and customs brokers do not get enough return on
investment (ROI) due to the lack of stability in the economy, depending on the
season and the changes in freight prices.
● The legislation governing exports and imports vary from nation to nation. This has
limited the operational scope of a freight forwarder. There are still many nations with
protectionist laws, despite free trade agreements and globalization. These laws may
prevent certain import-export items to be traded on a commercialized or large scale.

A lot of challenges have been faced by the freight forwarding business. There is no particular
definition of the word Freight Forwarder because different countries or states have different
names for a freight forwarder such as Customs and freight forwarding agent, customs
clearance services agent, customs broker. LogiSWOT helps you to get in touch with freight
forwarders globally. Moreover, global trade is dependent upon these freight services. But
they play almost the same role in the ​logistics management process despite their distinct
names.