SME

By FedEx | May 15, 2025

Freight forwarders handle the hard parts of shipping, so you can focus on running your business. Our simple guide to freight forwarding will help get you up and running in no time.

• Is your business up to speed with freight forwarding? Many SMES rely on freight forwarders to handle logistics, so they can focus on business growth.
• By outsourcing delivery, you can use freight forwarding services to manage customs clearance, route planning, and shipment tracking – while also reducing delays, errors, and unexpected costs.
• New to shipping and logistics? Our guide outlines what freight forwarding is all about, and how small businesses in Asia Pacific can benefit from these services.

You’ve just landed your first big overseas order – congratulations! Now, the real work begins: you need to figure out customs forms, plan a shipping route, and get your products to the buyer on time.

For many small businesses, logistics can be confusing and overwhelming. One mistake can cause costly delays or additional fees. This is where freight forwarding services come in. Simply entrust your preferred freight forwarder with your shipment, and they’ll handle all the paperwork, choose the best route, and make sure your goods clear customs smoothly.

Wondering if freight forwarding is right for your business? Our 101 guide breaks down what freight forwarders do, and why they’re useful. Read on to learn how they can help you ship overseas with less stress and more confidence.

What is freight forwarding?

Let’s start by defining a few key terms related to logistics and freight forwarding. Understanding this basic vocabulary will help you navigate freight forwarding services more easily.

Freight forwarding: The process of organizing and managing the shipment of goods from one country to another, handled by a third-party service provider known as a freight forwarder.

Freight (Cargo): The term used by freight forwarders to refer to the goods or cargo transported via air, road, rail, or sea. Freight forwarders often consolidate shipments from multiple shippers into a single air cargo hold or shipping container to optimize cost and efficiency.

Freight (Volume): The term “freight” can also refer to a single large or heavy shipment. For example, at FedEx, shipments over 68kg can be sent as freight and may qualify for discounted shipping rates.

Shipper: This is you – the company or business sending the goods.

Carrier: The service provider physically moving the goods, such as trucking companies, airlines, or ocean liners. Freight forwarders negotiate with these carriers, often leveraging longstanding relationships to secure competitive rates.

Documentation: The paperwork required for shipping, such as commercial invoices, packing lists, and air waybills. Freight forwarders manage this on your behalf.

Typically, freight forwarders don’t physically transport the goods themselves. They act as intermediaries between your business and logistics carriers – a single point of contact coordinating everything from booking cargo space to preparing customs documents. Their services may include:

• Preparing necessary documents for import or export
• Selecting carriers to move goods to their destination
• Negotiating freight charges
• Combining shipments to lower transportation costs
• Managing inventory during storage transportation 
• Filing insurance claims when necessary

As logistics grow more complex, freight forwarders have become increasingly vital to global business operations.

This is especially true in the Asia Pacific region. Freight forwarding services in APAC generated revenues of $65.9 billion in 2023, driven by the region’s heavy reliance on cross-border trade and its patchwork of customs procedures.

Businesses in the region use freight forwarders to streamline their global supply chains. This allows them to focus on what they do best, leaving logistics to specialists with the infrastructure, expertise, and networks to move goods efficiently and reliably.

Freight forwarders vs. direct shipping: Which one fits your business?

When it comes to international shipping, businesses can choose between direct shipping and freight forwarding. Both options have their advantages – it all depends on your specific needs.

With direct shipping, you work directly with a carrier to send goods from your location to the buyer, without passing through a distribution center. This can be faster and more straightforward for small shipments going to a single destination. It also gives you more control over the process.

The downside? You’re responsible for everything: packing, paperwork, customs, tracking, and more. Things can get complicated fast once multiple destinations or customs requirements are involved.

Freight forwarding, on the other hand, involves outsourcing logistics to a third-party expert. Freight forwarders handle the entire journey, making them ideal for businesses shipping in bulk, navigating multiple destinations, or expanding internationally.

While freight forwarding services may sometimes cost more upfront, they can also save time, reduce errors, and provide better long-term value through efficiency and expertise.

How do freight forwarding services work?

From a shipper’s point of view, the freight forwarding process is quite simple. The freight forwarder takes charge of the cargo, and it arrives at the destination on time.

Behind the scenes, freight forwarders manage complicated processes to get your shipment where it’s needed. A step-by-step process might look like this:

1. Export transport: The freight forwarder arranges for the cargo to be transported from the shipper’s warehouse to the airport or origin port.

2. Origin handling: Once at the freight forwarder’s warehouse, the cargo is unloaded, inspected, and prepared for export.

3. Export customs clearance: Freight forwarders work with customs brokers to complete all required paperwork.

4. Transportation: The freight forwarder selects the best carrier and books the consignment using various methods, like air, sea, road, or rail.

5. Import customs clearance: Customs agents in the destination country inspect the cargo and verify the required paperwork upon arrival. The freight forwarder works with a customs broker to ensure compliance. They may cover any import fees or fines and bill the shipper later.

Freight forwarders with Authorized Economic Operator (AEO) certifications can streamline this step further by offering deferred payment of import duties and other benefits.

6. Destination arrival and handling: On arrival, customs handles and inspects the cargo. The freight forwarder coordinates with relevant authorities to ensure the cargo passes inspections. They select a carrier to receive the shipment after it clears customs and transport it to the import warehouse.

7. Import transport: This is the final stage. The cargo is transported from the import warehouse to its final destination. The freight forwarder coordinates with a land carrier to ensure the safe and timely delivery of the goods, right up to the last mile.

Ship smarter with FedEx’s freight forwarding services

The logistics process gets more complicated every day. That’s why small businesses turn to freight forwarding services as a smarter, more efficient way to manage international shipping. Once you understand how freight forwarding services work, you’ll be better positioned to optimize your shipping strategy, saving valuable time, resources, and costs along the way.

At FedEx, we simplify freight forwarding services for SMEs across Asia Pacific. Our global network and logistics expertise offer you the flexibility to ship with confidence, delivering goods speedily through a robust air network serving over 220 destinations worldwide.

Explore FedEx air freight services today for large or heavy shipments and grow globally with ease.