Own-account or public transport: what is the role of the freight forwarder?
With own-account transport (also known as private transport), a company transports its goods with its own fleet of vehicles. According to the French Ministry of Ecological Transition, this represents around 13% of road haulage carried out in France under the national flag. The vast majority of companies therefore choose to outsource theshipment of their goods. They call on the services of a transport professional. What are the advantages of outsourcing certain operations in the logistics chain?
Own-account transport management
In-house management of the transport function allows us to control all operations. This part of the logistics chain requires perfectly coordinated work between the fleet manager, the drivers and the company's operational departments. However, own-account transport requires significant investment in the purchase,maintenance and management of the vehicle fleet. This only makes sense if the company's management and/or shareholders feel that transport is such an important part of the value proposition marketed and expected by the company's customers, that outsourcing it is undesirable.
Organization of transport activities within a company
Fleet management must be flawlessly organized, otherwise it can become a financial drain on the business. The fleet manager must be fully conversant with all safety and environmental standards, and the company must in particular have a manager in charge of the activity who holds a transport capacity certificate. He sets up processes that include a continuous training program for drivers, and actions to promote safe, fuel-efficient driving. He has to manage staff, vacations, absences due to illness, departures, recruitment, etc...
The manager uses fleet management software to collect information on the performance and efficiency of the resources deployed, and in particular on the management of drivers' driving hours, as well as vehicle maintenance and repairs.
The cost of managing a fleet of transport vehicles
Managing a truck fleet involves both fixed and variable costs. Fixed costs include everything not related to fleet operation. In accounting terms, this mainly involves the salaries of non-vehicle personnel, information systems, the purchase, depreciation or leasing of vehicles, insurance and taxes. Variable costs include everything connected with the use of trucks. These include driver salaries, fuel, servicing and maintenance. That said, in reality, only the costs of fuel, tolls, maintenance and driver travel are actually variable, since in the event of a drop in activity, the costs of driver salaries will still have to be paid.
To these standard operating costs, whether fixed or variable, must be added all the "exceptional" but recurring costs associated with repairs or time lost due to breakdowns, accidents and other imponderables, and even if the vehicle is guaranteed and the risk insured, the time and effort spent managing these incidents always puts a strain on the profit and loss account.
The freight forwarder, a specialist in the shipment of goods
The freight forwarder manages and coordinates transport operations on behalf of a customer. Compared to a transport company focused on managing a directly owned and operated fleet, the freight forwarder represents a real asset for a company entrusting it with its transport needs. For some, it is capable of managing all transport and logistics requirements, including those of global companies, for a reasonable commission:
- the freight forwarder adapts to the different needs of its customers, in all the road transport professions that the latter may require: full loads, partial loads, courier services, express transport, shuttles, etc...
- the biggest European and global carriers can also offer multimodal solutions (land, air and sea) throughout the world, whether as part of an integrated network or as part of alliances, known as forwarding agents, who can also handle all customs issues.
What does a freight forwarder do?
The freight forwarder organizes the entire logistics process involved in freight forwarding. This includes receiving, storing and shipping goods. He performs his duties in his own name, and assumes all liability. As an intermediary, he negotiates contracts with transport companies. He determines the most advantageous transport plans for his customer.
The relationship between a freight forwarder and his customer (or principal) is defined in a freight forwarding contract. This contract specifies the nature and purpose of the shipment, as well as the terms and conditions for carrying out the assignment. It also defines the obligations of each party (shipper, freight forwarder, carrier and consignee), as well as the price of the service.
The legal obligations of a freight forwarder
In France, road haulage is a highly regulated activity. The attestation de capacité professionnelle (certificate of professional competence) and the condition d'honorabilité (good repute) are compulsory documents for the legal exercise of this profession.
Attestation of professional competence in transport
This official document authorizes a company to operate in the road transport sector. It guarantees that the freight forwarder has mastered all aspects of his profession, and that he has the necessary skills to carry it out in complete safety.
The transport qualification is obtained after passing a fee-paying examination. Holders of a diploma or certification (BTS, DUT) in the field of transport are exempt. Exemptions from the examination are also available for those with at least five years' professional experience in a road transport company.
Good repute requirements for a transport company
The condition of good repute implies not having been the subject of a conviction recorded in bulletin no. 2 of the criminal record. Article R1422-7 of the French Transport Code lists all the offences concerned. Entry in the forwarding agents' register is also impossible if the company has already been struck off the register less than two years previously.
The advantages of choosing a freight forwarder
Freight forwarders put their many skills to work for companies. A true expert in his field, he advises his customers according to the nature and volume of the goods to be shipped. Thanks to their distribution networks, they can offer fast, flexible transport solutions tailored to the shipper's budget.
Commission agents offer real-time tracking of goods. They are equipped with TMS (Transport Management System) software to ensure merchandise management and traceability. They are responsible for ensuring that delivery deadlines are met, and that parcels are in good condition on delivery.
With this professional, legal standards no longer hold back international development. The freight forwarder is generally a RDE, a Registered Customs Representative. As such, he or she prepares documents and customs declarations relating to the import, export and transit of goods.
The choice of transport outsourcing depends on the volume and specificity of the goods to be shipped. It depends on the company's available resources and operational objectives. HK Courses, a road haulage contractor and owner-operator of its own fleet of vehicles, puts its expertise at your disposal for urgent and less urgent transport, finding the most appropriate solution for each customer's needs.
