10 steps to kick-start a freight forwarder business

1. Do your research

A freight forwarder is a company that specializes in arranging the transport of goods via air, sea, road, or rail. Therefore research is pivotal to gaining strategic insight in order to: stay gamed up on big hitters in the industry, analyze current market trends, and understand the current market trends.

After gathering your research, create a business plan that includes the products and services you will offer, the target customers, how you will stand out from competitors, and detailed financial projections.

2. Determine your mode of transportation

Freight forwarder licensing depends on how you will operate, so you will need a specific license that matches your plan to work on the sea, in the air or on the road. Below are the different types of licenses that are specific to each form of transportation, along with hyperlinks to access more information about them.

• Trucking and road freight forwarders need to get their license through Federal Motor Carrier Safety Administration (FMCSA).

• Ocean freight forwarders need to get their license through Federal Maritime Commission (FMC)

• Air freight forwarders aren’t subject to a federal license, but will need training and a membership number from the International Air Transport Association (IATA). Also, air freight forwarders must adhere to rules by the Transportation Security Administration (TSA).

• Intermodal freight forwarders use two or more modes of transportation to carry goods. You’ll need multiple licenses depending on where you operate. For example, you’ll need a license from the FMCSA and the FMC if you operate on land and on the water.

3. Choose a legal structure, get your license, and permits

To be a sole proprietor, start a partnership, or own a corporation are questions you have to ask yourself when beginning a freight forwarding business. Each type of entity has specific laws, regulations, tax implications, ownership requirements, and liability protections that must be explored before making a decision.

4. Establish reliable partnerships in the shipping industry

The last place you want to be is in bad business with the wrong partner. When choosing partners in the shipping industry, start off by considering their reputation, customer service, experience, commitment to quality service, safety record, pricing structure, discounts availability, and payment terms.

5. Invest in software to manage shipments + quotes

With all that hustle you’ve been up to, you need a seamless management system to help bring order to all the tasks at hand. Automated systems are the perfect solution for tracking orders, invoices, and other documentation. That’s because it clears up space for you to put more energy toward other important areas in your business.

6. Develop customer service policies

Maintain positive relationships with customers by developing clear customer service policies. This should look like outlining what services you will provide, setting delivery timelines, and responding promptly to customers.

7. Market your services

Marketing your services significantly increases your chances of securing business with potential clients. Anyone can do this by choosing the right mediums to target your audience; whether that be on Facebook, Instagram, YouTube, Twitter, or LinkedIn. And even marketing through events, search engine optimization (SEO) and pay-per-click (PPC) advertising.

8. Monitor your competitors

Monitoring your competitors regularly gives you the ability to avoid wrong business decisions. As a result, you can use their failed practices and strategies as a benefit to minimize your business losses.

9. Focus on quality

To succeed in any business, it's important to prioritize quality. Make sure to ship goods safely and securely and provide excellent customer service. This will help build trust with customers and encourage them to come back again.

10. Watch your growth

Lastly, it’s important to track your progress to make sure you're meeting goals and being successful. Create reporting systems and regularly analyze data to find areas where you can improve and adjust plans as needed.

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⚡Level up⚡

Strategic tips and tricks for new freight forwarders:

✅ Plan, plan, plan.

✅ Define roles and responsibilities to eliminate uncertainty and bring transparency to your business.

✅ Implement risk management to avoid penalties and being put out of business.

✅ Review your transportation process to ensure you’re always carrying a full load and using the most cost effective shipping methods for each cargo.

✅ Enlarge your storage and study order patterns for fast delivery and maximize available space to optimize loading and unloading shipments.

Trivia segment

Sometimes we know less than what we think. Trivia is one of the funnest ways to exercise our brain and expand our knowledge. See what you know this week!

1. Who is known as the first freight forwarder?

2. When was the first freight forwarding company established?

3. Where are ocean freight charges paid at?

4. What is the CFR?

5. Who pays for the ocean freight charges?

6. What is the other term for International Commericial term?

🫣 Scroll to the bottom to check your answers!

Trivia Answers

1. Thomas Meedows and Company

2. In 1836

3. At the port of discharge

4. Cost and Freight

5. The importer

6. Incoterm