A Look Into Domestic And International Freight Forwarding

Freight forwarding is the process of coordinating and organizing the shipment of goods. Freight forwarders can work domestically (within the boundaries of a given nation) and internationally (between nations).

You might assume that domestic freight forwarding is simpler than international freight forwarding—and in some regions, that may be true. Here in Canada, however, both domestic and international freight forwarding carry their own unique complexities. By comparing and contrasting the two, we aim to give you a better idea of the importance of freight forwarding for both domestic and international operations.

What Is International Freight Forwarding

International freight forwarding involves sending freight from one country to another. Freight can be carried by air, sea, or land. In international freight forwarding, a combination of several modes of transportation is common. This is known as multimodal shipping.

International freight forwarders must have a sophisticated understanding of all possible modes of transportation between nations to find the most effective routes for your shipment. 

They must also have comprehensive knowledge of customs regulations, international law, and other regulatory and legal frameworks. These frameworks may be imposed by multiple countries, including the country of origin, the destination, and the countries which the goods will be transported through in transit. 

Knowledge of maritime law, understanding how to ensure goods being transported across international borders, and real-time monitoring systems are also essential for successful international freight forwarding. 

What Is Domestic Freight Forwarding

Domestic freight forwarding involves moving freight within a country. This can occur within a single territory in the country, or across boundaries. Here in Canada, for example, shipping within a province is called intraprovincial shipping, while shipping between provinces is called interprovincial shipping.

As in international freight forwarding, multimodal transportation plays a critical role in domestic freight forwarding. Roads, planes, trains, and boats can be used in domestic shipping routes. In Canada, other modes of transportation, including ice roads and even snowmobiles, are used to reach remote Northern communities. 

What Are The Key Differences 

Scope Of Operations

Typically, international freight forwarding involves a much greater scope of operations than domestic freight forwarding. Your freight forwarder will deal with carriers across two or more countries and may need to work with customs agents at several different borders. As a member of 

This does not mean the scope of operations for domestic freight forwarding is always narrow by contrast. Domestic shipping operations to remote communities in Nunavut, for example, typically involve multimodal transport and several different shipping countries; knowledge of interprovincial and interterritorial trade barriers is also a must. 

Logistical Complexities

Managing a supply chain can be complex even in domestic shipping—when it comes to international shipping, these complexities are amplified. International logistics is fraught with challenges—customs agents who speak different languages than you, transportation costs calculated in different currencies, fluctuating exchange rates, and unforeseen domestic and international events, from earthquakes in a country of origin to trade wars between nations.

All of these complexities affect the cost, speed, and reliability of international shipping—an international freight forwarder must have the resources and connections to navigate these challenges smoothly. Freight forwarders may work with hundreds of different companies and contacts across hundreds of different nations to ensure that your freight arrives without a hitch. BBE is a member of WCA; we have partners in 196 countries, giving you access to global markets. 

Documentation

In both domestic and international shipping, a freight forwarder must ensure that all shipments are accompanied by the appropriate documentation. 

Internationally, this can mean forms for customs clearance—forms that detail origins, Harmonized System (HS) codes, automotive reports, manifests, and more. A variety of forms and documents may also be necessary for both domestic and international shipping; Dangerous Goods identification, commercial invoices to ensure compliance with local laws, and more may be required. 

Costs

Typically, the cost of shipping goods internationally is higher than the cost of domestic freight forwarding—but this isn’t always the case. Shipping goods from Ontario to Michigan, for example, is typically far less expensive than shipping goods from Vancouver Island to Nunavut. 

Costs are, however, typically much more predictable when it comes to domestic freight forwarding because domestic shipments are subject to less market uncertainty. Currency fluctuations and tariffs can affect the cost of international shipping, and the greater number of countries a shipment must move through exposes the shipment to more risk of political or social upheaval. The distance travelled is also typically longer—and the more time a shipment takes to reach its destination, the greater the chance of an unforeseen problem delaying the shipment. 

Choosing The Right Freight Forwarder For Your Needs

There are a number of freight forwarding companies in any given country; honing in on your goals is the key to finding the right one for your needs.

When looking into international freight forwarding companies, begin by exploring which countries different companies offer freight forwarding to. You should also research their value-added abilities to try to keep operations in one place. Here are a few questions you should ask:

• Does the freight forwarder act as a customs broker, or work with customs brokerages in the countries you’re shipping to and from?
• Will it help you fill in customs documentation?
• Is it bonded? 
• Does it arrange for freight insurance?
• Does it offer multimodal transportation? 
• Does it offer hotshot air freight services for delayed shipments?
• Does it offer freight auditing and freight consolidation?
• Does it offer cold chain logistics or similar services for sensitive shipments?
• Does it offer real-time monitoring of shipments?

You can ask similar questions for domestic freight forwarding—though customs brokers are less of a concern. In Canada, you should also consider expertise in northern and remote shipping; the logistics for shipments to Northern Canada is much more involved than the logistics of shipping between two provincial capitals.

The freight forwarding industry is complex—for a freight forwarding partner that can provide all of the services you need, choose BBE Supply Chain Co. We are a comprehensive logistics company with services for multimodal domestic and international freight forwarding, customs clearance expertise, real-time monitoring, and much more.