Why you should hire a freight forwarder
A freight forwarder’s main role is to act as a representative for their clients and tackle the overwhelming, and at times frustrating, aspects of logistics and supply chain management. Freight forwarders provide their clients with beneficial insights related to freight pricing and routing, navigating international and domestic regulations and complicated document requirements, to name a few.
If you are going to expand your business internationally, freight forwarders play an integral part in supply chain management. They will negotiate freight rates on your behalf with the primary international cargo carriers (such as airlines and steamship lines), assist with documents, deal with Customs formalities and, finally, organize transport and deliveries.
So, what makes a successful freight forwarder and how do shippers benefit from setting up a relationship with a freight forwarder?
Knowledge
In order to be an effective service provider, freight forwarders who handle your import and export requirements typically have many years of professional experience. In the case of Universal Logistics, aside from a team with years of industry experience, we also have specialists who focus on the various sectors of the industry. These specialists are continually learning and using this knowledge to best serve the needs of our clients.
Versatility
Successful freight forwarders have to be versatile to adapt to market conditions that are continually in flux. While price is a key component, it is only one aspect of an international freight move. It is very important to be fully aware of what is happening at any given time. Issues such as space allocation, equipment requirements, scheduling updates and navigating regulations are matters freight forwarders deal with on an ongoing basis.
Visibility
If your goods are in the process of being transported via ocean, air or road, it is understandable that you might get concerned about the status of your cargo. Freight forwarders track your cargo throughout its journey and provide updates and information when required. This provides shippers with the reassurance that their shipments are in good hands and are being monitored continually.
Supply Chain Optimization
If you are unsure about selecting the correct carrier or mode of transport for your goods, this is where a freight forwarder excels. They will help you decide the best course of transportation for your goods. There is more to a freight move than pricing, as transit times, space availability and carrier reliability are factors that must be considered when routing cargo. Forwarders are continually analyzing all of these factors when deciding on the best routing for a client’s cargo.
Cost Savings
Controlling your freight and using the services of a freight forwarder of your choice is the ideal scenario to protect your interests and save money. Freight costs can be very volatile, as the past year has shown. Working closely with your freight forwarder, who will have the best market insight and advise accordingly, ensures your freight costs are kept in line and you have full visibility to fluid market conditions.
Helps Your Business Create a Broader Network
Global freight forwarders such as Universal Logistics work with a broad network of international agents and, in most cases, these relationships are longstanding with proven service records. Knowing their international shipping requirements will be taken care of, allows shippers to broaden their scope of business worldwide. At the same time, international contacts provide expertise in their local market, and ensure your shipments are coordinated economically and efficiently.
For more information, contact David Lychek, Director – Ocean & Air Services.
Air & ocean freight market update
Air Freight:
At the onset of the COVID pandemic, air passenger activity declined drastically, which reduced overall international cargo capacity. Many dedicated freighters increased operations to offset the capacity shortage, and some passenger aircraft were being repurposed for cargo-only operations. Now that passenger flights to international markets have returned to almost pre-pandemic levels, we expect passenger cargo hold capacity to recover fully and open up more freight options.
Market rates have been trending downward since the fall of 2022, but still remain above 2019 levels. The air cargo industry is subject to many influences, such as the current downturn in consumer demand due to high inflation, high interest rates and energy costs. Capacity is currently sufficient to support demand, which is leading to a slower decline in air rates. If there is no considerable surge in volumes, the trend will be towards fluctuating, yet competitive, rates that will be lower than 2022 levels.
Ocean Freight:
The Asia – North America market is in a state of flux, with volumes severely depressed due to a number of influences. During the COVID pandemic, China adopted a “Zero COVID” policy, which hampered exports and also had importers worldwide looking towards India and other emerging markets as potential manufacturing hubs outside of China. Many importers are sitting on stockpiled inventory, which was meant to combat strong consumer demand last year, and are not importing new products. In some cases, this has caused freight rates on the Asia – North America trade lane to drop below pre-pandemic levels.
Carriers are still reluctant to restructure networks and remove sufficient capacity to match the decline in demand, preferring a weekly blanking strategy and hoping for a rebound in bookings, with capacity recovery aspirations focused on the second half of the year. Blank sailings will be a key factor into Q2 2023, as it pertains to space and availability. One carrier has announced that they will implement a “floor rate” for ocean freight to maintain and protect profitability, ensuring that rates cannot drop below their “floor rate”. Typically, once one carrier implements something new, others will likely follow suit.
The good news, however, is that, lately, securing space and bookings has been much easier than it was this time last year. As well, global liner service schedule reliability has improved to over 50%, from an all-time low last year, when just one-third of vessels arrived at destination ports on time. Many industry forecasters are stating that 2023 should see a more robust volume from the transpacific trade lanes towards the latter half of the year, which is in contrast to 2022, which saw a strong first half of the year.
The Europe – North America market, which is normally very stable, saw ocean rates decrease last year, however not to the extent of rates from Asia. This market is more mature and healthy, and fluctuation and uncertainty are not as impactful as with the Asian market. We expect to see rates gradually decline on the Europe – North American trade lane for Q2 2023, and it is speculated that rates will eventually return to their pre-pandemic level.
For more information, contact Debbie McGuire, Director – Freight Solutions.
Uyghur Forced Labour regulations - Canada & USA
Both Canada and the USA have issued regulations to help fight human rights violations in China affecting Uyghurs and other ethnic minorities from the Xinjiang Uyghur Autonomous Region (UXUAR) of China.
Canada and the USA have taken measures, with a goal of preventing goods made by forced labour from entering either country.
Canada
Effective July 1st, 2020, Canada’s Customs Tariff Act and the Schedule to the Customs Tariff were amended to include a prohibition on the importation of goods produced wholly or in part by forced labour. The Government of Canada expects companies to take every step possible to ensure that their supply chains conform to Canadian law with respect to the prohibition on the import of goods produced by forced labour.
Canadian companies that are 1) sourcing directly or indirectly from Xinjiang or from entities relying on Uyghur labour, 2) established in Xinjiang, or 3) seeking to engage in the Xinjiang market, will be required to sign the Integrity Declaration on Doing Business with Xinjiang Entities prior to receiving services and support from the Trade Commissioner Service (TCS), beyond receiving a briefing of the risks of doing business in this market. Required data elements for the Integrity Declaration can be found here.
In light of the risks inherent in doing business with Xinjiang-related entities, thorough due diligence is essential. The Government of Canada urges businesses and individuals with links to Xinjiang or labourers from Xinjiang to closely examine their supply chains to ensure that their activities do not support repression, including, for example, the Chinese government’s surveillance apparatus in Xinjiang, detention or internment facilities, or the use of forced labour. Similarly, the Government of Canada encourages companies and individuals to closely examine end-users of their products and services to ensure that they are not being used to support these activities.
Canadian businesses and individuals operating in certain high-technology fields such as cameras, sensors and biometric devices may face greater risks when doing business in China, as these products are being used to arbitrarily track Uyghurs and others in Xinjiang. Businesses in these fields should exercise the highest level of due diligence and caution with respect to end-users of their products and services.
For more information about the human rights situation in Xinjiang and the risks of doing business with Xinjiang-related entities, please review Global Affairs Canada’s advisory on doing business with Xinjiang-related entities.
USA
The Uyghur Forced Labor Prevention Act (UFLPA) is a United States law aimed at addressing human rights abuses in Xinjiang, China. The law, which was first introduced in the US Congress in 2020, prohibits the importation of goods produced through forced labour in Xinjiang. The UFLPA establishes a presumption that the importation of any goods and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China is prohibited by Section 307 of the Tariff Act of 1930, and that such goods, wares, articles, and merchandise are not entitled to entry to the United States.
In June 2022, U.S. Customs and Border Protection (CBP) began issuing ‘known importer letters’ to those importers identified as possibly importing merchandise produced using forced labour, so that they may review their supply chains.
All importers are expected to review their supply chains thoroughly and institute reliable measures to ensure imported goods are not produced wholly or in part with forced labour. The UFLPA would require companies to prove that their products are not made using forced labour in Xinjiang. It would also impose penalties on companies that violate the law, including fines and restrictions on imports.
Effective March 18, 2023, as per CBP’s Uyghur Forced Labor Prevention Act Region Alert, the manufacturer’s postal code is required for goods produced in China, in order to determine if those goods may have been produced within the Xinjiang Uyghur Autonomous Region.
When reviewing supply chains related to Xinjiang, businesses should closely examine potential indicators of forced labour and other abuses, including a lack of transparency on the origins of goods, internment terminology (e.g. education training centres, vocational schools, or boarding schools/kindergartens for children), Xinjiang government incentives and factory locations (e.g. near detention or internment facilities).
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Canada bans Russia aluminum and steel imports
As announced March 10, 2023, by The Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, Canada has banned the import of Russian aluminum and steel products.
Through regulatory amendments under the Special Economic Measures (Russia) Regulations, the importation of all Russian aluminum products, such as unwrought aluminum, aluminum sheets, and finished products including containers and other household items made from aluminum, is now prohibited. Also banned are all primary Russian steel products, including iron and non-alloy steel, semi-finished, and finished products such as tubes and pipes.
This ban will further deny Russia the ability to generate the revenues it needs to pay for its war against Ukraine. Canada continues to work alongside its partners and allies to hold Russia accountable.
This import ban covers all noted Russian made goods, destined for Canada, regardless of the country of export.
For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.
Global Spotlight Quiz
Name the city that is home to the Bandra Worli Sea Link
- Home to three UNESCO World Heritage sites, Elephanta Caves, Chhatrapati Shivaji Terminus (Victoria Terminus) and the Victorian Gothic and Art Deco Ensembles.
- Bollywood has been rooted in this city since the 1930s.
- Home to the world’s most expensive house, Antilia.
- Birthplace of author Rudyard Kipling (The Jungle book).
Answer: Mumbai, India
For more information about shipping freight to or from this city, contact Debbie McGuire, Director – Freight Solutions.
Quick Tip
Report Lost and Damaged Cargo to your Forwarder, Carrier and Insurer as soon as possible
Any loss or damage to cargo should be reported immediately to the company or the company’s nearest settling agent. A cargo surveyor is usually appointed to determine the nature and extent, if the amount of the loss or circumstance warrants. The faster one acts, the greater the probability of recovery.
At Your Service:
Yoona Lee
Freight Pricing
Yoona Lee joined Universal Logistics in February 2022, as a member of our Head Office Freight Pricing team, with a background in freight operations.
Yoona is very dedicated to her work and always looking for new challenges. Within the past year, Yoona successfully completed both CIFFA Certificate programs in International Freight Forwarding with exceptional grades.
Yoona can be reached by phone (905) 882-4880, ext. 1244 or by email.
Yoona Lee
Freight Pricing
SMART Logistics
Controlling how freight moves through your supply chain could save you thousands – or more.
Working with us means someone always asks: how can we make this shipment better?
Single-sourced trucking, customs clearance and distribution to expedite your freight shipments between the U.S. and Canada.
Route is produced monthly for the clients of Universal Logistics. Reader comment and story ideas are welcome. Comments of general interest to all Route readers will, with the permission of the writer, be published. Copyright © 2023 Universal Logistics Inc. All rights reserved. Reproduction for any commercial use is strictly prohibited.
Route is produced by Universal Logistics. Editor: Bettina Scharnberg. Email: bscharnberg@universallogistics.ca While every effort has been made to ensure the accuracy of information contained herein, Universal Logistics accepts no responsibility or liability for errors or omissions. Written correspondence should be forwarded to:
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