02 August 2021 • 28 min read
Find a Freight Forwarder in Asian Countries
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For traders who source goods from Asian countries that have their own languages and cultures, a local freight forwarder brings many advantages. Follow these tips to make the right hire for your business needs.
Asia is a major engine for global trade. Traders worldwide source cost-effective, high quality goods from the region – led by China, the world’s factory – to sell in their respective markets. Japan, South Korea, Vietnam, Thailand, Malaysia and Indonesia are some other Asian countries feeding the global need for electronics, electrical equipment, automobiles and their components, textiles and plastics, among others.
Shipping from Asia can be challenging, given the different languages and business cultures. Transit times are also long. For example, shipping goods from China by sea – the most popular and economic freight mode – averages 30 days. A lot can go wrong on such a long journey if the shipment isn’t properly planned. Hiring a freight forwarder to handle your shipments makes good business sense, especially if you don’t have much experience importing from Asia. But hiring a freight forwarder in the Asian country where you import from rather than in your own country might be even better. For one, most international freight forwarders operating in these countries will outsource the job to a local forwarding company to save on costs.
Finding a freight forwarder is not as difficult as it might sound. This is a helpful guide to finding and selecting the right forwarder for your needs in each of the seven countries mentioned earlier. Read on to also know:
- What does a freight forwarder do?
- What are the advantages of hiring a local freight forwarder?
- What to look for in a freight forwarder? Where to look?
What is a freight forwarder?
A freight forwarder is an individual or company that specialises in the shipment and coordination of goods from one country to another via a single carrier or multiple carriers. This could be by air, sea, rail or road. Freight forwarders work on the promise of shipping your goods cost-effectively and in good condition. They offer a range of services, including:
- Negotiating freight rates
- Booking cargo space on carriers
- Preparing shipping documents
- Overseeing the packing, labelling and transportation of cargo
- Arranging cargo insurance and doing any follow-up, such as filing insurance claims
- Making storage and warehousing arrangements
- Collaborating with foreign customs agents to ensure compliance with customs regulations
- Offering expert advice on the best possible routes and costs, customs regulations, country-specific trade laws, political situations and so on.
Freight forwarding industry in Asia
The Asia-Pacific region is the fastest growing freight forwarding market, with China leading the charge. There are various types of forwarding firms in Asia:
- International players: Many international freight forwarding companies, including some big names, have branches in Asia.
- Local firms: These include private companies as well as state-owned enterprises, which are common in a country like China where the manufacturing and export sectors receive ample government support.
- Digital end-to-end service providers: With online rate comparison, freight booking, live cargo tracking, and various other services combined with personnel to provide optimal customer experience, Cogoport offers a simplified, digitised end-to-end experience for traders exporting to or importing from Asia. At Cogoport, we manage a lot more than our customers’ forwarding requirements. Sign up to have one of our in-house experts give you a call and tailor solutions to cater to your exact shipping needs.
Additionally, the freight forwarding market in Asia can be segmented on the basis of mode of transport (sea or air), service (freight transport, warehousing, value-added services such as packaging and customs clearance), and end user (automotive, pharmaceutical, agricultural produce).
Why hire local freight forwarders in Asian Countries
There are many benefits to working with a local forwarder in Asia. In China, these are the obvious advantages:
- Cost-effective: China is a manufacturing powerhouse thanks to its low costs. This price advantage extends to forwarding fees as well. Also, a forwarder based out of China is better suited to offering you the best deals rather than a foreign firm. Cogoport works with local freight forwarders in China to provide our customers with the best prices.
- Linguistic edge: Some knowledge of Mandarin or Cantonese is a must when doing business in China. Hiring a Chinese forwarder takes care of this problem.
- Cultural guide: Chinese business culture is unique. For example, Chinese businesses place more importance on guanxi – which roughly translates as personal connections or social networks – than on laws. Navigating these cultural quirks is easier with a home-grown forwarder.
Click here to read our guide to importing from China to India
The world’s third largest economy is a land of opportunity for traders, but its unique practices can be a deal-breaker. That’s where a local freight forwarder comes in:
- Cultural guide: Like China, Japan has a distinctive business culture. The Japanese market respects the rule of law. It also places great importance on business etiquette. Common forms of etiquette include speaking in a respectful and low tone of voice, bowing as a sign of respect, dressing formally, and building business relationships through informal social gatherings.
- Negotiating power: In Japan, negotiations require a certain level of trust between the parties involved. For a foreign buyer in Japan, a local freight forwarder would be able to negotiate better rates from their supply chain partners, with whom they have built a rapport over the years.
- Linguistic edge: As in the case of China, or the rest of Asia for that matter, knowledge of the local language – Japanese – is a key motivation to hiring a local forwarder in Japan. Cogoport’s strong network of freight forwarders in Japan enables us to ensure our customers efficiency in all their shipments.
Shipping from South Korea, which has clocked record growth in exports in recent months, can be a challenge:
- Cultural guide: South Korean businesses greatly value kibun, which roughly translates as keeping one’s dignity or face. They are also strict about hierarchy; and entertainment – dining and sharing drinks is routine business practice. As in Japan, bowing is a sign of respect. A low bow from your Korean business partner usually indicates a successful meeting or negotiation. These are the cultural quirks a local freight forwarder will have no trouble understanding when working on your behalf.
- Linguistic edge: English is taught in South Korea from the third grade onwards. The language is also widely used in business, especially by senior management and government officials. However, most businesses prefer to communicate and receive proposals in both English and Korean. A local freight forwarder with knowledge of both languages can be a huge asset.
Vietnam is one of the fastest growing, emerging economies in Asia. But complexities in conducting trade and shipping goods can be problematic:
- Negotiating trade barriers: Unclear customs rules, a complicated tax system, red tape, and corruption are concerns cited by foreign traders exporting to or importing from Vietnam. A local freight forwarder, with first-hand knowledge of complex customs procedures, can help you avoid delays and expenses. Additionally, they can advise you in other areas.
- Linguistic edge: Vietnamese is the language used in all documents and licences. Also, importers submitting documents must provide a Vietnamese translation, certified by a court and authenticated by the Vietnamese embassy. A local freight forwarder can ensure that their foreigh client is never lost in translation.
- Cultural guide: In Vietnam, meeting in person is preferred over communicating via email, negotiations can be long-drawn-out processes, and being tactful rather than direct so as to let your business partner save face is common. All of these factors reinforce the fact that hiring a local freight forwarder to handle your shipments in Vietnam is the best way forward.
Cogoport’s end-to-end international trade services will serve you well in ensuring the involvement of local freight forwarder’s to execute your shipments smoothly. Sign up today.
Thailand might be heavily reliant on exports but its business climate can be tough to navigate without a seasoned local partner:
- Weathering political turbulence: For more than a decade now, political instability has ruled Thailand. A country’s political situation can directly impact its trade policies. It is the reason why exporters and importers cite political turbulence as a major risk factor. In a country with an unstable political climate, a local freight forwarder is a foreign trader’s eyes and ears, keeping him informed of key changes in laws, rules and policies.
- Cultural guide: Though more relaxed than other Asian countries, Thailand still has distinct business practices that can be baffling for foreigners. These include building a personal rapport before forming a business alliance, respecting hierarchy, and addressing business partners according to Thai culture.
With its mix of cultures (Malay, Chinese and Indian), Malaysia’s business community has diverse practices that are difficult to understand for foreigners but nothing a local freight forwarder can’t handle.
- Negotiating trade barriers: Malaysia restricts the export of certain categories of exports. Foreign importers sourcing textiles from the country, for example, must ensure the exporter has an export licence for it. Similarly, the export of rubber, timber and palm oil requires special government permission. By working closely with the exporter, a Thai freight forwarder can ensure the foreign importer’s shipment reaches them without any hassles.
- Weathering political turbulence: Like Thailand, Malaysia has experienced multiple political crises in recent years. This political instability implies uncertainty about future policies, including those governing trade.
Rich in natural resources, Indonesia is a natural trade partner for many countries. But cultural differences make importing and shipping from that country a challenge:
- Cultural guide: While negotiations are common and accepted in Indonesian business culture, hard bargains and pressure tactics can be deal-breakers. Rushing a negotiation is also a no-no. Also, the country’s methods of communication differ from Western countries. For example, your Indonesian counterpart might be reluctant to tell you if they disagree with you but might be more open to airing their views to a local person.
- Negotiating trade barriers: Corruption, weak rule of law, and poor infrastructure are some of the challenges cited by foreign traders doing business with Malaysia. These factors again reinforce the need for a local representative, such as a freight forwarder, to handle your shipping operations in that country.
What to look for in a freight forwarder
Asia has a booming freight forwarding market. Picking the right one requires some work. Cogoport ensures all of the below before empanelling forwarders on our platform. Book your shipments with us to skip past the lengthy process of evaluating one on your own.
This criteria list should help you land a trustworthy freight forwarder:
- Registered company: The first step is to confirm that the forwarder shortlisted by you is registered and, hence, a legal entity. There have been instances in the past of fraudulent forwarders in China scamming foreign traders and even freight forwarders of their goods, usually by offering very cheap ocean freight rates. With a registered company, you can protect your goods even in the event of a dispute.
- Good communicator: While knowledge of the local language is key to doing business in Asian countries, it is equally important that your local shipping forwarder can communicate with you in a language familiar to both of you, preferably English. Beyond language matters, the forwarder should also have a good communication system in place that encourages regular exchange of information. If your local Asian forwarder has a point of contact in your country or destination country, it can make communication smoother.
- Experienced and reputable: The forwarder should have been in business for some years at least. Reputation is equally important. One way of verifying a forwarder’s reputation is by checking if they are a member of the World Cargo Alliance (WCAworld) or International Federation of Freight Forwarders Associations (FIATA), which are organisations representing freight forwarders. Memberships to such groups are based on a strong service and financial record.
- Strong supply chain network: A forwarder is only as good as their network of logistics providers, customs agents and other industrial connections. After all, these connections allow a forwarder to offer the best freight rates, get documentation done quickly and accurately, get shipments through customs smoothly, and so on.
- Specialisation: Is your forwarder experienced in shipping the kind of goods you deal in? Does it have the packaging facility you require? This is especially important for businesses dealing in special cargo such as fresh produce, refrigerated goods, and hazardous material. It also comes into play when there is a requirement for a specific freight service or shipping mode. For example, air freight for a high-value shipment or consolidation services for Less than Container Load (LCL) shipments (consolidation is the grouping of multiple small shipments to form one full container shipment).
- Location: Working with a forwarder who operates in the same city as your manufacturer/supplier makes sense. But it’s even better if you can hire one located in the area of the port of departure itself as they will know the ins and outs of shipping from that port. This condition qualifies as a nice-to-have rather than a must-have.
- Cargo insurance: Shipping comes with risks. And transporting goods uninsured is a huge risk. A responsible freight forwarder not only offers insurance advice but also makes the necessary arrangements to insure cargo from origin to destination.
- Cheapest isn’t best: Forwarding fees reflect the services provided. If the quote you receive from, say, your Chinese forwarder sounds too good to be true, it probably is. Compare quotes from a few forwarders and the services they offer before you make a choice.
Where to look for a freight forwarder
- Do a Google search. Narrow the search by including specific details such as product type, origin and destination
- Check the websites of digital freight forwarding companies. You’ll find a lot of useful information such as freight rates and financial services offered
- Ask your manufacturer/supplier. They might already be working with a forwarder who ships to your country of destination
- Get recommendations from business contacts, especially those who import from the same Asian country as you do
- Check FIATA’s website. Go to the ‘Membership’ header, click on ‘Search Individual Members’, then make your selection in the country feed. If you click on China, you’ll receive a list of licenced freight forwarders in that country with their contact details
- Alternatively, ship with Cogoport and we will identify and manage the most appropriate freight forwarder for you
How to verify a freight forwarder
Your search for a reliable freight forwarder ends only after you’ve put in the effort to check that they are what they claim to be. Here’s what you can do to verify their credentials:
- Ask for copies of business licences and certificates. If they have the documents, they shouldn’t have a problem showing them
- Call their offices to check if their phone number is working
- Check their website. Look for customer reviews
- Ask for references
- Raise queries to check if their response is prompt and satisfactory
- Visit their offices. Many foreign traders who source their goods from Asian countries visit their manufacturer’s factory in that country for a physical audit at least once. They can take this opportunity to visit their forwarder too
- If you’ve decided on a freight forwarder, test them with a pilot run
Having a local freight forwarder handle your shipments in China and other Asian countries will not only save you money and time but allow you to focus your energies on other aspects of your business. All it takes is a little effort on your part to find the right firm for the job.
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