Freight forwarding, also known as cargo forwarding, facilitates the movement of goods from a manufacturer or supplier to their final destination. It is an indispensable service for businesses that need to transport items from one place to another.
There are two main types of freight forwarding: Domestic Freight Forwarding and International Freight Forwarding. Both require a great deal of expertise to ensure your shipping needs are met without any bumps in the road. Here at Baum Shipping, we have over 35 years of result-driven experience in the industry. If you require domestic or international freight forwarding services, call (800) 383-3157 to speak with a professional or Get a Free Quote online.
Continue reading to discover the key differences between these two types of freight forwarding, where their procedures differ, and how individuals and businesses can determine which operation is needed for their transportation requirements.
Domestic and international freight forwarding is important, but what’s the difference?
Okay, so we know that freight forwarding is an important industry for shipping goods to and from locations across the globe, but why separate domestic and international services? Essentially, there are quite a few factors to consider when determining the shipping process. The differences between domestic and international span far greater than just destination, although that is important.
Here are the five most prominent differences between the two methods:
As the name suggests, domestic freight forwarding handles the transportation of goods within a single country. This involves shipments between cities or states, depending on the country’s size and the specific requirements of the cargo.
On the other hand, international freight forwarding involves shipping goods across international borders. This kind of service is necessary when shipping cargo between countries or continents.
Shipping Regulations and Compliance
Domestic freight forwarding operates under the regulations of a single country, which simplifies the compliance requirements. As long as the domestic freight forwarder adheres to the local shipping standards and rules, there should be no legal obstacles to managing cargo transportation.
International freight forwarding, however, needs to comply with the regulations of both the exporting and importing countries, as well as international shipping laws. These forwarders need to keep track of trade agreements, customs requirements, taxes, documentation, and other compliance-related issues that may arise during the shipping process.
Documentation and Custom Procedures
Domestic freight forwarding rarely requires extensive documentation as it operates within a single country’s legal framework. Only necessary shipping-related information, such as cargo details, pick-up and delivery locations, and contact details, is required.
In contrast, international freight forwarding involves a more complex documentation process. To clear customs, you need proper documents, like the commercial invoice, packing list, bill of lading, certificate of origin, and cargo insurance. These documents serve as proof of the cargo’s origin, contents, value, and destination.
Currency Fluctuations and Payment Terms
For domestic freight forwarding, invoicing and payments happen in one currency, meaning currency fluctuations are not a significant concern.
Conversely, international freight forwarding deals with multiple currencies, exchange rates, and payment terms, depending on the countries involved. These fluctuations can significantly impact the final shipping cost; hence, it’s essential to factor them into the overall shipment pricing.
Transportation Modes and Transit Time
Domestic freight forwarding can utilize various transportation modes, such as land (trucks and trains), air, and water (in certain cases). The transit time generally falls within a predictable range and can be reasonably managed to meet deadlines.
In international freight forwarding, transportation can involve multiple modes, such as sea, air, rail, and road, depending on the cargo’s origin and destination. This results in a more extended transit time, making it essential for businesses to plan shipments accordingly and expect possible delays.
An easy guide on how to determine which shipping process is right for you:
To determine whether you need domestic or international freight forwarding, consider the following factors:
- Shipping Destination: Choose a domestic freight forwarding service if your cargo needs to be transported within a single country. If it has to cross international borders, opt for an international freight forwarding service.
- Compliance Requirements: Familiarize yourself with the regulations of the countries involved in your shipment. If multiple customs and compliance requirements must be met, choose an experienced international freight forwarder to ensure a smooth shipping process.
- Documentation: Assess the documentation requirements for your shipment. If extensive documentation and customs clearance is required, you should opt for an international freight forwarder.
- Transit Time: Consider the transit time needed for your shipment. If the cargo delivery deadline is tight, partnering with a reliable domestic or international freight forwarder, depending on the destination, is crucial.
Contact Baum Shipping Today
Understanding the key differences between domestic and international freight forwarding and evaluating your shipment requirements will help ensure a successful shipment. Partnering with the right freight forwarder will streamline your logistics process and help expand your business’s global reach.
Reach out to Baum Shipping for all of your freight forwarding needs, whether that is domestic or international. Call us at (800) 383-3157 to speak with one of our professionals or feel free to get a quick quote online.
Baum Shipping | International and Domestic Freight Forwarding