What Is Freight Logistics And How Does It Work?

Freight logistics is the process of managing international goods shipments. It takes significant knowledge, experience and resources to ensure goods arrive safely at the right place and time while keeping costs low for customers. Successful freight logistics systems typically involve:

• Choosing and engaging carriers 
• Negotiating carrier rates
• Labeling shipments and preparing the correct international paperwork
• Maintaining customs compliance
• Planning efficient routes
• Insuring loads during transit
• Invoicing services and collecting payments
• Coordinating the activities of different carriers to ensure smooth journeys

The logistics of freight management differ from other types of transportation. While shipping and freight logistics have much in common, shipping typically refers to transporting loads of any type and size, while freight companies usually handle bulk shipments. Meanwhile, third-party logistics companies offer transportation services alongside other processes, such as inventory management and order fulfillment. 

Working with a specialist freight logistics provider offers several benefits, including more economical services and a deeper understanding of international customs requirements. Let’s explore the freight logistics process in more detail.

The Freight Logistics Process Explained

Planning and executing successful freight operations includes several complex processes, highlighting the importance of an expert logistics provider. Here’s a step-by-step list of the processes involved in seamless freight shipping.

1. Selecting Carriers and Negotiating Contracts

The first step of freight logistics is selecting the right carriers. Some routes may involve multiple transport modes, adding an extra layer of complexity to the selection process. While evaluating carriers, freight logistics coordinators consider each company’s performance track record and risk-management arrangements. 

After selecting the most suitable carriers, a logistics coordinator negotiates favorable contract terms. These negotiations can help you achieve the best shipping rates and terms to suit your circumstances, such as volume flexibility.

2. Preparing Shipping Documentation and Paperwork

Before shipping, goods must be accurately labeled so carriers can identify and deliver them to the intended destination. High-quality labeling makes it easier to track and monitor goods during shipping and provides essential handling instructions. 

Freight logistics coordinators also prepare export documentation to comply with customs laws in the destination country. Submitting complete, accurate documentation prevents delays and reduces the risk of compliance issues and penalties.

3. Scheduling and Coordinating Freight Pickup and Delivery

Your freight logistics provider schedules the collection of your goods and coordinates delivery to their destination. This process is particularly complex in routes involving several carriers. For example, your planned route may involve transporting goods by road to a port before loading them onto a freight ship. Freight logistics coordinators communicate with carriers and plan timings in detail to ensure seamless transitions between locations.

4. Managing Customs Clearance and Regulatory Compliance

Customs authorities closely monitor goods entering and exiting a country to prevent illegal trade and ensure payment of duties and taxes. Compliance procedures vary significantly between countries, so it’s worth working with a logistics coordinator to ensure compliance with local laws. Freight logistics coordinators are experts in import and export regulations, and they can help you obtain the correct customs clearance and maintain legal compliance.

5. Tracking Shipment Progress and Monitoring Performance

Throughout the transportation process, your logistics coordinator monitors your shipment's progress and makes adjustments if necessary. They also carefully analyze carrier performance and implement improvements to make your route as efficient and cost-effective as possible.

Freight logistics coordinators often use transportation management systems to help them plan and optimize freight operations. TMS software allows users to track shipments, manage billing and automate repetitive processes for a more streamlined experience.

Freight Forwarders, Freight Brokers & Other Players in Freight Logistics

When you engage an expert coordinator, several entities work together to deliver successful freight logistics and ensure your shipment arrives safely and on time. Key players involved in your freight shipment project may include:

• Freight brokers: Freight brokers act as intermediaries between shipping carriers and clients. They manage communication between parties and ensure smooth handovers between carriers. Many freight brokers specialize in specific freight types, bringing significant expertise to the table. Unlike freight forwarders, freight brokers don’t take possession of your goods. 
• Freight forwarders: Freight forwarders offer services similar to freight brokers, but they also take possession of your shipment. In addition to acting as an intermediary between you and your carrier, they may also assist in storing, packing and shipping your goods.
• Shipping carriers: Shipping carriers transport goods from point A to point B by truck, train, ship or air. Specializations range from smaller local deliveries to large-scale international transport operations. For some international shipments, your freight logistics manager may coordinate handovers of your goods between multiple carriers to get them to their destination. 
• Non-Vessel Owning Common Carrier: An NVOCC provides similar services to traditional ocean carriers. However, they lease space in existing shipping containers instead of transporting goods on their own ships. Working with an NVOCC could be a good option for smaller businesses that don’t require an entire shipment container.
• Third-Party Logistics: 3PL companies provide supply chain services to businesses. Available services vary between companies, but many provide storage, packing and brokerage alongside strategic planning. 

Every shipping operation is unique, so which companies you need to involve in freight transportation depends on your needs. A dedicated freight logistics coordinator can help you choose the most effective services for your requirements. 

Optimizing the Freight Logistics Process

Achieving the most economical and efficient transportation for loads takes significant planning. Selecting the correct transportation method, finding the most efficient route and planning your loads can reduce the rates charged by carriers. Freight logistics companies take this planning off your plate, using their expertise and experience to select practical and effective options for your business. 

Shipping goods overseas comes with financial and logistical risks, from customs noncompliance to lost or damaged loads. Ensuring you obtain the correct customs clearance and comply with local regulations is essential to avoiding delays and fines. Insuring your goods also minimizes your financial exposure if something goes wrong during the shipping process. 

Identifying and mitigating risks to your business caused by shipping and customs issues is complicated. Having a freight logistics expert in your corner maximizes the chances of everything going smoothly and helps you put contingencies in place for unexpected hiccups.

Elevate Your Global Supply Chain With Atlas International's Logistics Expertise

At Atlas International, we’ve spent decades building a trusted global network and have extensive expertise in managing complex freight operations. When you partner with us, we provide a full suite of services to optimize your supply chain, from freight logistics coordination to warehouse management. Schedule a free consultation today to learn more about our freight logistics services and discuss your needs with one of our experts.