Differences Between a Freight Forwarder and a Carrier

When it comes to global logistics, understanding the distinct roles of a freight forwarder and a carrier is crucial. Both play vital roles in ensuring goods move smoothly from one point to another, but their functions and responsibilities differ significantly. Continue reading and learn about the key differences between a freight forwarder and a carrier and how they interact within the global and local supply chain.

What is a Carrier?

A carrier, often referred to as a common carrier, is the entity that owns the transportation assets and is responsible for the actual movement of goods. Carriers can be shipping lines, airlines, trucking companies, or rail operators.Types of Carriers· Shipping Line: A shipping line operates a fleet of ships that transport goods across seas and oceans. Major shipping lines include Maersk, MSC, and CMA CGM.· Airlines: These carriers transport goods via air, which is crucial for time-sensitive and high-value shipments.· Trucking Companies: They handle overland transport, providing flexibility and direct routes for domestic and cross-border shipping.· Rail Operators: Rail carriers are ideal for bulk goods over long distances within continents.Carriers are responsible for the safe and timely delivery of cargo and for operating the vessels, aircraft, trucks, or trains that physically move the goods.

What is a Freight Forwarder?

A freight forwarder acts as an intermediary between the shipper and various transportation services, such as shipping lines, air freight, and trucking companies. Essentially, a freight forwarder does not transport goods directly. Instead, they arrange the logistics and coordinate with carriers to ensure the efficient movement of cargo.Services Provided by a Freight Forwarder· Logistics Planning: A freight forwarder helps plan the most efficient and cost-effective route for shipping goods.· Documentation: They handle necessary paperwork, including customs documentation, ensuring compliance with international shipping regulations.· Cargo Insurance: Freight forwarders often offer insurance options to protect goods against potential damage or loss during transit.· Consolidation: They can consolidate smaller shipments into one larger shipment, reducing shipping costs.An international freight forwarding company leverages its network and expertise to navigate complex shipping regulations, ensuring timely and secure delivery of goods.

Key Differences Between a Freight Forwarder and a Carrier

When it comes to their roles in the supply chain, a freight forwarder acts as a coordinator, arranging transportation, handling documentation, and ensuring smooth logistics. On the other hand, a carrier owns and operates the transport vehicles and is directly responsible for the physical movement of goods.Here are other differences between the two:


A freight forwarder offers a comprehensive suite of services, including route optimization, documentation, and shipment consolidation, ensuring efficient logistics management. In contrast, a carrier is dedicated to the actual transportation of goods, focusing on maintaining schedules and ensuring cargo safety throughout the transit process.

Relationship with Shippers

A freight forwarder directly collaborates with shippers to plan and manage logistics, offering customized solutions to meet specific needs. On the other hand, a carrier works with freight forwarders or shippers to deliver transport services according to established schedules and routes.

Can a Carrier Be a Freight Forwarder?

While primarily distinct in their roles, a carrier can offer freight forwarding services. Some large shipping lines and airlines have established logistics divisions to provide end-to-end solutions, acting as both carrier and freight forwarder. This integration allows them to offer comprehensive services, from planning and documentation to the actual transportation of goods.


Understanding the differences between a freight forwarder and a carrier is essential for efficient and effective logistics management. While a freight forwarder arranges and oversees the shipment process, a carrier is responsible for the actual transportation of goods. Both roles are vital, and their collaboration ensures the seamless movement of goods across the globe. Whether working with an international freight forwarding company or directly with a common carrier, businesses can optimize their supply chains by leveraging the strengths of each entity. 

10 Shipping Tips for Small Businesses

Shipping is a crucial aspect of any small business that deals in physical products. This is regardless of whether you’re sending a batch of handcrafted furniture to a boutique overseas or delivering custom tiles to a residential project across town. When you better understand the nuances of shipping, it can save you time, money, and stress.

Streamline your business and learn the 10 essential shipping tips for small businesses, particularly those catering to homeowners and builders worldwide.

shipping strategy

Shipping tips for small businesses

For many businesses whose services may revolve around small products and documents, timely delivery ensures customer satisfaction and business success. Reasons such as these often highlight the complex shipping industry whose logistics requires strategic planning and reliable partners. Small businesses need to learn key considerations and strategies for their businesses and in shipping their goods effectively.

1. Understand Your Shipping Needs

The best way to start your shipping business first starts with assessing your shipping needs. Are your products fragile? Do they require special conditions like temperature control? Understanding these needs will help you choose the right carrier and packaging, ensuring that your goods arrive in top condition.

2. Choose the Right Packaging

The right packaging does more than protect your product—it can also reduce shipping costs. Invest in quality materials and consider custom-sized boxes to avoid paying for extra weight or space. For fragile items, ample padding is non-negotiable. Remember, the first impression matters when your product reaches your customer’s doorstep.

3. Leverage Technology

Use technology to streamline your shipping process. Many software solutions can help you manage orders, track shipments, and update customers in real-time. This not only improves efficiency but also enhances customer satisfaction with up-to-date information at their fingertips.

4. Know the Regulations

Shipping across borders? Build a shipping strategy. Make sure you understand the customs regulations of both the sending and receiving countries. Non-compliance can result in delays, fines, or even seized shipments. Always include the necessary documentation and consider consulting a customs expert if you frequently ship internationally.

5. Optimize for Cost-Effective Shipping

Explore different carriers and compare their rates and services. Don’t just stick to one—sometimes, a mix of carriers can offer the best bang for your buck depending on the destination and speed required. Also, consider offering free shipping thresholds to increase customer orders while managing costs effectively.

6. Build Strong Relationships with Carriers

Good relationships with your logistics providers can lead to better rates, priority services, and inside information on the best shipping practices. Regularly meet with your carriers, understand their challenges, and work together to find solutions that benefit both parties.

7. Plan for Peak Seasons

For businesses involved in construction and home improvement, peak seasons can mean a surge in demand. Prepare for these times with adequate stock, extra packaging materials, and perhaps even temporary additional help to manage orders. Advance planning prevents last-minute chaos and shipping delays.

8. Consider Insurance

Shipping insurance might seem like an unnecessary expense, but it can be a lifesaver for high-value products. Determine the cost-benefit ratio of insuring your goods, especially for international shipments that are more prone to risks.

9. Focus on Customer Service

Shipping is a part of your customer service. Transparent communication about shipping times, costs, and policies can help set realistic expectations. Also, be ready to handle shipping issues swiftly—how you manage problems can significantly impact your business reputation.

10. Regularly Review and Adjust

Shipping is not a set-it-and-forget-it part of your business. Regularly review your processes, carrier performance, and customer feedback. Stay flexible and ready to adjust to new challenges, whether they’re changes in shipping regulations or shifts in customer preferences.

By implementing these shipping tips, small businesses can improve their operations and customer satisfaction simultaneously. Whatever your business niche be, a local artisan or a small enterprise aiming to expand internationally, effective shipping strategies are key to success.

Learn more by reading these related article:

How to Mitigate Currency Fluctuation Risks When Shipping

The importance of Sustainability in the Shipping Sector

How the Suez Canal Issue Affects the Global Supply Chain

The recent Suez Canal blockage caused by the Houthi rebel attacks has sent ripples through the global supply chain. As one of the busiest waterways, the canal facilitates the daily transit of billions of dollars’ worth of goods between Europe and Asia. The disruption has led to a backlog of vessels, delaying shipments of vital commodities.

Many international freight forwarding company rerouted around the Cape of Good Hope, while others container ships paused their cargo movements until further notice. This resulted to the prolonging of many shipments’ journeys which adds up costs to maritime companies. This is also expected to add to yet another pile of inflation causing further economic strain.

With the current low water level of the Suez, it is expected that prolonged delays will likely impact industries worldwide, from manufacturing to retail, highlighting the vulnerability of the interconnected global supply chain to unexpected disruptions, prompting reassessment of logistical strategies.

Importance of Suez Canal in Global Trade

Engineered by French diplomat Ferdinand de Lesseps, the Suez Canal was constructed between 1859 and 1869, during the era of European colonial expansion. Situated in Egypt, this waterway holds immense economic significance in global trade due to its strategic location and pivotal role as a maritime artery connecting the Mediterranean Sea to the Red Sea. Upon its completion, the Suez Canal immediately transformed global trade patterns, reducing travel distances and transit times for maritime vessels.

This ambitious endeavor emerged as a vital lifeline for global trade, serving as a crucial conduit for the transportation of goods between Europe, Asia, and Africa. Approximately 12% of global trade volume passes through the canal annually, encompassing a diverse range of commodities, including oil, natural gas, manufactured goods, and agricultural products.

Impact on Global Supply Chain

The Suez Canal is a vital link in many global supply chains, particularly for time-sensitive goods such as perishable items or components used in manufacturing. During the pandemic which started at the end of 2019, supply chains were put to extreme pressure but was able to flow smoothly by 2023.

However, by the end of the year, another disruption happened when the Yemeni rebels—the Houthis attacked Israel. Adding to their strategy is attacking civilian container ships at the Red Sea that goes to and from the Suez. This is seen as a major global impact as it will again cause long term effects on global trade and supply chains such as the following:

Shipping Delays and Increased Costs

In the event of geographical conflicts, maritime traffic through the canal is greatly disrupted altogether. This result in delays and congestion as vessels are forced to reroute around the Cape of Good Hope, significantly extending transit times and increasing costs for shipping companies.

What adds to the price are higher fuel costs and additional expenses for shipping of the goods and other commodities therein. These increased costs would likely be passed on to consumers, leading to higher prices for goods transported by sea.

Impact on Energy Markets

Approximately 10% of global seaborne oil trade passes through the Suez Canal, making it a critical route for the transportation of oil and gas between the Middle East and Europe. With the recent events unfolding every day definitely leads to fluctuations in oil prices and supply shortages affecting energy markets worldwide.

Financial Losses

The economic impact is so significant that billions of dollars is lost revenue for shipping companies, insurers, and other businesses reliant on maritime trade. The ripple effects of supply chain disruptions would also be felt across various industries, leading to financial losses and decreased economic growth.

Response and Risk Mitigation Efforts

As these attacks happen, the UK and US governments are trying their best to pacify the rebel group through airstrikes. However, the group keeps all efforts to strike back at any moment they can.

As for analysts, the problem has happened before and many say that ocean freight security process will again be restored. It is a hopeful take. However, time can only tell when it is to happen. But as of now, the most feasible course of action are the shipping alternatives around the southern part of South Africa. Some industry experts focus on nearshoring or relocation of their supply to avoid further delay of goods, streamline production, and avoid going through middlemen system.

While the attacks are showing no signs of halt, shipping companies are doing their best to think of ways to protect and keep the supply chain going. The expected recovery timeline is still bleak and all that commercial vessels can do is move forward doing the effective commerce despite the danger of the continuing conflict.

How Does the Israel War Affect Global Logistics and Freight Forwarding?

The ongoing war between Israel and Palestine has caused suffering and political instability among citizens. It has also disrupted the operations of the logistics industry, affecting different modes of transportation like air, sea, and land vehicles.

Moreover, the Israel-Hamas conflict that has led to a humanitarian crisis has also affected the supply chains of various sectors like electronics, defense, healthcare, and agriculture.

Disruptions to Transportation Routes of the Global Logistics Industry

The Israel-Palestine conflict continues to unfold in a geographically strategic location with numerous major seaports, airports, and land transit routes that can affect the operations of a logistics company in the Philippines. This conflict has led to severe disruptions in transportation routes and has significantly slowed down the flow of goods in the global supply chains, causing substantial delays in international deliveries.

Increased Insurance and Transportation Costs

The ongoing instability in Israel could potentially result in increased insurance costs for various goods transported in the region. Global logistics companies must carefully consider this factor when pricing international air freight forwarders. The resultant increase in cost could impose a significant financial burden on both companies and end consumers.

Reassessing Current Operations of the Maritime Shipping Industry

The Israel and Palestine conflict has also led the maritime industry to rethink its current operations. The maritime trade route through the Suez Canal for transporting goods between Europe and Asia passes through the Middle East. Any disturbances around the area, such as the Israel-Palestine war, can negatively impact shipping schedules and create bottlenecks in the global supply chain.

Given the current situation, maritime experts are actively monitoring the developments. It is crucial for the maritime shipping industry to promptly adjust its current routes and schedules to mitigate potential risks, underlining the urgency of the situation.

Negative Impact on Global Demand Supply Balance

The disruption of different transportation modes has also negatively affected the supply chains of various sectors that rely on Israel’s production and consumption. One of the affected sectors is electronics, as Israel is known as a major supplier of computer processors and telecommunications equipment in Europe and other markets.

The ongoing war has disrupted the production and delivery of various products. This disruption can affect the global trade demand and supply balance.

Moreover, Israel is prominent for being a leading supplier of military equipment and technology to countries like India, Singapore, Azerbaijan, and Colombia. The ongoing war has increased the demand for these products, but there is also a reduced capacity to fulfill this demand.

Renegotiation of Contracts and Current Supplier Relationships

Another major effect of the ongoing conflict in Israel is the renegotiation of contracts with partners and suppliers. This adjustment can be challenging, but for suppliers and logistics companies, it can be a way to meet new challenges and address uncertainties related to the conflict in Israel. This move will require more effort and flexibility to adapt to a rapidly evolving situation.


The war in Israel has a big impact on the global logistics industry as it generates disruptions in transportation routes, cost increases, and challenges in managing global supply chains. Logistics companies must be prepared to adapt to changing circumstances. Diversification and risk management are crucial for logistics companies to continue operations despite the challenges.

To learn more about the logistics industry, read these informative articles from Excelsior:

Tips when Working with a Freight Forwarder

How Currency Exchange Affects Freight Forwarding Costs

How Different Conflicts Affect the Global Shipping Industry?

Exploring All Modes of Freight Transportation for 2024

In the global business landscape, the challenges of transporting goods have evolved through innovation, effectiveness, and adaptability, giving rise to a robust industry. Logistics corridors no longer follow the straight lines of the past; rather, they span the boundaries of technology, sustainability, and creativity. This year of 2024, check out the various modes transportation in an international freight forwarding company that bring a distinctive level of service in the freight forwarding industry and how it help meet the growing need for better logistics.

Here is are the possible best modes of freight transportation that will continue to shape the industry’s future because of new emerging technologies.

Traditional Modes of Freight Transportation

Trucking: The backbone of freight transportation continues to be trucking, but with technological advancements. Autonomous trucks and platooning are becoming more prevalent, promising increased efficiency and reduced operational costs.

Rail Freight: With high capacity and eco-friendly advantages, rail freight is experiencing a resurgence. Innovative technologies, such as precision scheduled railroading, are optimizing routes and enhancing overall efficiency.

Air Freight Revolution
Drone Delivery: Unmanned aerial vehicles are taking center stage for last-mile deliveries. Companies are investing in drone technology to achieve faster and more cost-effective deliveries, especially in remote or congested areas.

Air Cargo Innovations: The air freight industry is witnessing advancements in cargo planes, including increased fuel efficiency and capacity. Supersonic air travel is also on the horizon, potentially reducing shipping times across the globe.

Seaborne Solutions

Smart Shipping: The maritime industry is incorporating IoT and blockchain technologies for smarter shipping operations. From predictive maintenance to real-time tracking, these innovations are enhancing reliability and transparency. However, this may affect forwarding costs due to currency exchange which is also true for other modes of transportation.

Autonomous Ships: The concept of autonomous vessels is gaining traction, promising to revolutionize the maritime sector. These ships can navigate oceans efficiently, reducing human error and operational costs.

Underground Freight

Hyperloop and Tube Transport: The emergence of hyperloop technology and tube transportation systems is changing the game for long-distance freight. With the potential for high-speed travel and minimal environmental impact, these systems are being explored for their viability in the near future.

Urban Mobility Solutions
Cargo Bikes and E-scooters: In congested urban areas, cargo bikes and electric scooters are becoming popular for last-mile deliveries. These eco-friendly options help reduce traffic and emissions, contributing to sustainable freight transportation.

Space-Age Logistics
Satellite Logistics: As technology continues to advance, satellite logistics is playing a crucial role in tracking and managing freight globally. This space-age solution ensures real-time visibility, security, and efficiency in the supply chain.

Electric and Sustainable Initiatives
Electric Trucks and Ships: The shift towards electric vehicles is impacting freight transportation. Electric trucks and ships are gaining momentum, reducing the industry’s carbon footprint and contributing to a more sustainable future.

Green Initiatives: Companies are increasingly adopting eco-friendly practices, such as carbon offset programs and sustainable packaging, to align with environmental goals and consumer demands.

The future of freight transportation in 2024 is a fascinating amalgamation of traditional methods and cutting-edge technologies. From the skies to the seas, and even beneath the ground, the logistics industry is exploring every avenue to create a more efficient, sustainable, and interconnected global supply chain.

In Excelsior we embrace these innovations to ensure that the freight transportation sector remains dynamic and adaptable in the years to come.

Freight Forwarding Trends 2024: Things to Expect in the Industry

Trends come and go, and the same is true with the freight forwarding industry. Its constant evolution is shaped by technological advancements, global economic shifts, and changes in consumer behavior—something to always look out for.

As we step into a new year, several leanings are poised to redefine the landscape of freight forwarding trends in 2024.

From digital transformation to sustainability initiatives, these are not only reshaping the industry but also providing opportunities for innovation and efficiency.

freight forwarding

Freight Forwarding Trends of 2024

Take, for example, the current consumer behavior that boomed during the pandemic—online purchasing. This is one good reason and factor in predicting the industry trend for the coming years.

Businesses need to stay ahead and learn from this developing habit of consumers and also to take good care of their supply and its flow.

Counting the days to 2024, here are some of the things to expect in the freight forwarding industry:

1. Digital Transformation and Automation

In 2024, the freight forwarding industry is experiencing a significant digital transformation.

Automation technologies, such as robotic process automation (RPA) and artificial intelligence (AI), streamline processes, reduce errors, and enhance overall efficiency. Automated booking systems, real-time tracking, and predictive analytics are becoming the norm, empowering freight forwarders to make data-driven decisions and optimize supply chain operations.

2. Blockchain Integration for Enhanced Security

Blockchain technology is gaining traction in the freight forwarding sector, offering enhanced security, transparency, and traceability.

By implementing blockchain, an international freight forwarding company can address key challenges such as documentation errors, fraud prevention, and real-time visibility across the supply chain.

Smart contracts within blockchain systems enable the automated execution of agreements, minimizing delays and disputes.

3. Real-time Tracking and Visibility

In 2024, real-time tracking and visibility have become essential components of freight forwarding.

Advanced tracking technologies, including Internet of Things (IoT) devices and sensors, enable shippers and logistics providers to monitor the location and condition of goods in transit.

This level of transparency not only enhances customer satisfaction but also allows for proactive problem-solving and risk management.

4. Eco-friendly Initiatives and Sustainable Practices

Sustainability is no longer a choice but a necessity in the freight forwarding industry.

With increasing awareness of environmental issues, companies are adopting eco-friendly initiatives to reduce their carbon footprint.

Electric vehicles, alternative fuels, and optimized routing for fuel efficiency are some of the sustainable practices gaining momentum in 2024.

Freight forwarders are not only meeting regulatory requirements but also aligning with the growing demand for environmentally conscious supply chain solutions.

5. Resilience Planning and Risk Management

Global events, such as the COVID-19 pandemic and geopolitical tensions, have underscored the importance of resilience planning in the freight forwarding industry.

In 2024, companies adhere to using a guide for international freight forwarding process to help prioritize risk management strategies and mitigate disruptions.

This includes diversifying supply chain sources, leveraging technology for scenario planning, and implementing flexible logistics solutions to adapt to unforeseen challenges.

6. Collaborative Platforms and Ecosystems

Collaboration is key in the evolving landscape of freight forwarding. Digital platforms and ecosystems are connecting various stakeholders in the supply chain, fostering communication and collaboration.

These platforms enable seamless information sharing, coordination, and optimization of resources, ultimately leading to more agile and responsive supply chains.

As we navigate through 2024, the freight forwarding industry is embracing a paradigm shift driven by digitalization, sustainability, and a commitment to resilience.

Companies that adapt to these trends will not only thrive in the current landscape but also position themselves as leaders in a future that demands innovation, efficiency, and a sustainable approach to global logistics.

The convergence of technology and a forward-thinking mindset is paving the way for a new era in freight forwarding.

To learn more, read these informative articles by Excelsior.

Tips When Working with a Freight Forwarder

How Currency Exchange Affects Freight Forwarding Costs

Tips when Working with a Freight Forwarder

Working with a freight forwarder international has been a crucial part of exporting products to various ports worldwide for many years. This allows exporters to have third-party support that can handle the consignments when they arrive at their destination. There are also freight forwarders that act as a customs brokerage firm as they assume responsibility for managing clearances on behalf of the shipper. 

However, despite being a vital part of the global trading process, many exporters fail to build a healthy working relationship with their international freight forwarding provider. This usually led to price fluctuations, delays in procurement, and details getting overlooked. A solid connection with a forwarder provides several benefits, including lower freight rates that shippers might not secure on their own. 

Here are some tips you can consider if you want to start partnering with an international freight forwarding company or improve your connection with them.

freight forwarder international

·         Ensure Proper Communication

The most crucial part of working with freight forwarders is ensuring effective communication throughout the shipping process. You can communicate your priorities and possible future projects to help the forwarders make the process more efficient. In addition, you can also communicate any potential negative experiences with previous forwarders, as it can help build a healthy relationship with your new freight forwarder. 

Communicating about the expectations, responsibilities, and projects will make the shipping process more manageable than usual. This will also allow both sides to collaborate on particular issues that might arise during transport. 

·         Pay On Time

One of the most significant issues faced by freight forwarders for years is late payments. This leads to them having problems paying their own vendors and creditors, which can further delay shipment. This is why exporters must pay on time, enabling them to have a good credit relationship with their freight forwarder. Payment overdue jeopardizes the entire shipping process and can lead to forwarders ending their relationship with the exporters. 

·         Avoid Cramming Shipments

Transporting shipments takes many things to be successful, which is why it is vital that you plan it in advance. Only giving yourself a few days to have the shipment out will lead to various complications. This includes difficulties in finding vessel space and shipment booking. This will also result in more expenditure due to delayed container use. 

·         Understand Export Compliance

Another crucial thing to do when exporting products is to ensure you properly understand the requirements to transport your product. For example, you must accurately classify what items you are shipping. You should also know the requirements when labeling the cargo and the paperwork required for your goods. This can help forwarders properly tender shipments and ensure they arrive at their destination without complications. 

·         Focus on Long-Term Goals

If you are looking to expand your business in the future, it is vital that you consider your freight forwarders as a part of your logistics team. You should not only see them as a third-party service that provides the lowest prices, as this can result in a challenging situation. Making them a part of your internal team will allow you to develop a healthy connection with them, helping you get competitive prices and faster transport speeds. 


With freight forwarding expected to be more crucial in the succeeding years, exporters must be able to find a freight forwarder that they’ll be confident working with for a long time. Building a healthy relationship can be a game-changer for many exporters, enabling them to reap several benefits that make shipping cost-effective and faster than usual. 

And if you are looking for the best freight forwarder in the Philippines for all your transport needs, then Excelsior Philippines is for you. We have been in the industry for more than two decades, providing our clients with peace of mind that their shipments will arrive at their destination safely. To learn about our services, contact us by visiting www.excelsior.ph/contact-us or calling (+632) 8525-9775. 

How to Mitigate Currency Fluctuation Risks when Shipping

For decades, exporting products has been vital to the Philippine economy, allowing entrepreneurs to increase profits through global trading. Despite its downward trend recently, exports still account for more than $5 billion of the nation’s GDP. The continuous expansion of digital trading can provide new opportunities for Filipino business owners to export their products to various countries, potentially increasing export rates moving forward. 

And despite being an essential part of the economy, numerous exporters face unique issues that can hinder their operations in the long run. For starters, not partnering with an international freight forwarding company can significantly risk the packages getting lost or damaged while in transit. But what remains one of the top issues exporters face on a day-to-day basis is foreign exchange, which constantly fluctuates for several reasons. 

Understanding Currency Fluctuations

International forwarding invoices are often complex, with many factors contributing to freight rates around the globe. And one of the significant ones is currency exchange, which mainly refers to how much of each currency is needed when people exchange them. Some factors that lead to currency fluctuations are economic conditions, market sentiment, and political situations. 

Currency exchange rates have always been a massive part of calculating freight costs, and even a tiny change in the rates will significantly affect shipping prices. Besides freight prices, currency fluctuation can negatively impact a company’s potential revenue and profit margins. This can decrease an enterprise’s competitiveness in the market, especially if most of its competitors come from countries with stronger currencies. 

Mitigating Currency Exchange Risks

The risks of currency fluctuations when it comes to shipping prices are not a new thing. Many organizations have already implemented different techniques that allow them to reduce the impact of fluctuating currency rates when shipping their products. 

1.      Use Forward Contracts

One of the most straightforward solutions to decrease the complexities of shipping costs is to use forward contracts. This means that the merchant and buyer will agree to a fixed exchange rate that they can use for future transactions. This will allow both parties to know exactly how much the payment would be without worrying about changes in the currency rate. 

2.      Understand the Currency Adjustment Factor (CAF)

The concept of CAF is mainly used by freight forwarders, enabling them to mitigate the risk of currency fluctuations, especially for long-term contracts. Here, the shipper will have a flat percentage surcharge on the invoices sent to their clients, and this usually is based on the currency where the freight will depart and arrive. Exporters must know this concept to help them plan out their finances in the long run. 

3.      Currency Options

Apart from forward contracts, it will also help if companies consider currency options strategies when exporting their products. Many enterprises have used this risk management technique to protect themselves against currency fluctuations. 

Like forward contracts, this hedging strategy gives businesses the right to export at a fixed price in the future. But the main difference is that the parties are not forced to finish the transaction when the deadline arrives. This is beneficial if the exporter believes they will get a more favorable currency rate, allowing them to mitigate the risks of financial losses. 


With digital platforms opening up new opportunities for merchants to sell their products to international customers, exports are expected to continue to rise in the coming years. And so, firms must know the risks they might encounter when exporting products, such as the ever-changing foreign exchange rate. By understanding this, they can implement the proper currency fluctuation management solution that will protect them from financial losses in the long run. 

Excelsior Philippines, the country’s top freight forwarding and customs brokerage company, has been in the industry for more than two decades, providing our clients with peace of mind that their shipments will arrive at their destination safely. We can also help you negotiate freight charges for the best shipment value. To learn about our services, contact us now by clicking here or calling (+632) 8525-9775. 

How Currency Exchange Affects Freight Forwarding Costs

Global trading has significantly grown in the past decade as more and more businesses and individuals rely on imports and exports to make money. Experts forecast that international trade will hit more than $32 trillion in 2022 as countless products from different industries are shipped across borders daily. 

And along with the positive development in global commerce is also the rise of the international forwarding industry. Numerous enterprises are now partnering with international freight forwarding companies to effortlessly transports their shipments to their destination. In addition, a freight forwarder can help companies tackle various factors that affect the shipping process, including the constant currency exchange rate fluctuation. 

What is Currency Exchange?

In its simplest form, the currency exchange rate refers to how much each currency is needed to be exchanged with one another. The US Dollars has always been the standard for currency exchange rates and holds the most daily shares with more than 88%. Currency rates are always considered floating as various factors affect them daily, including economic activity, GDP, and the supply and demand for different products. 

The continuous fluctuation of currency rates across the globe can result in shipping surcharges for companies. This makes freight forwarding invoices complicated for organizations to handle. Currency exchange rates affect various factors in how freight costs are calculated, and companies must know how to manage them to avoid massive financial losses in the long run. 

Impact on Freight Forwarding Costs

The primary currency used for freight costs is US dollars, and its value against other currencies can affect the overall shipping prices. Various things contribute to the total freight costs, and currency rates significantly affect whether the amount will increase or decrease. 

Varying Currency Exchange Rate 

The exchange rate in every nation is different, which can significantly impact freight costs. The amount needed to transport goods to one country differs considerably in other nations. Exports to a nation with a weaker currency than the US dollar are a little more expensive. This means that you need to adjust your budget. 


For decades, imports have been subject to taxes even before arriving at the destination port. Authorities do this to generate income and protect local producers, as imported items must be sold at a higher price. A specific percentage of the total value of the shipment usually calculates the tax to be paid. Stronger currency rates between the two nations decrease the overall cost of the freight and offset any increase in the tariff rate. 

Transaction Fees

Apart from tariffs, many exporters also pay different transaction fees based on how the shipment is delivered. The amount may fluctuate based on the currency value of where the importer or exporter is paying. Financial institutions implement foreign currency conversion and transaction fees, which a shift in the exchange rate can significantly impact. 


As global trade continues to expand, it is vital that businesses that rely on shipping understand the various factors that affect forwarding costs. One of which is the exchange rate, which significantly affects the overall shipping expenditures. Currency exchange rates adjust daily, and it can be tedious for importers and exporters to handle them. But partnering with a reputable logistics company can help them efficiently plan the needed amount for every freight. 

Excelsior Philippines, the country’s top freight forwarding and customs brokerage company, has been in the industry for more than two decades, providing our clients with peace of mind that their shipments will arrive at their destination safely. We can also help you negotiate freight charges for the best shipment value. To learn about our services, contact us now by clicking here or calling (+632) 8525-9775. 

How China’s Latest COVID-19 Outbreak Affected the Global Supply Chain

The COVID-19 pandemic has crippled various industries worldwide. This led to many companies scrambling to keep their business afloat amid uncertain times. Contactless transactions have become the norm, and the adoption of modern solutions has significantly increased as organizations pivot to remote work and digital commerce.

And one sector heavily impacted by the global health crisis is the international freight forwarding industry. Strict lockdowns have led to international freight forwarding companies suffering losses due to a decrease in manufacturing and massive congestion in major ports worldwide. 

It’s been more than two years since the first wave of the pandemic hit the globe, and freight forwarder international firms have slowly recovered since then. But a recent COVID-19 outbreak in China has brought new uncertainties in the global supply chain, with the sudden increase in cases causing worker shortages in ports and important factories across the country. 

The Latest COVID-19 Outbreak in China

After easing their harsh zero-COVID policies amid the wide protests in big cities, China has faced what many experts consider the worst COVID-19 wave recorded. Authorities in the country estimated that almost 250 million individuals contracted the virus during the first 20 days of December 2022, making it the fastest rise of COVID patients in the nation since 2020. 

This unprecedented situation has led to businesses needing to close down again, as most of the workforce is infected or exposed to an infected individual. Reports also said that medical establishments are overwhelmed by the situation, most of which are struggling to cope with the sudden spike in COVID cases right after the government became lenient with their COVID prevention policies. 

Effects on the Global Supply Chain

As home to some of the biggest ports around the world, there is no wonder that the latest COVID surge in China significantly affected the world’s supply chain. Some crucial ports like Shanghai and Shenzhen have recorded a notable increase in shipment cancellations rate, with reports expecting it to go up to 31%. This came as factories found it hard to operate with limited people, especially with many reporting that more than half of workers were infected with the virus. 

The latest COVID surge in China also further decreased the demand, which was already down before the fiasco, for goods and raw materials coming from the country. This led to domestic and international factories experiencing delays in procuring products and consumers seeing a shortage in supply for some necessities. 

The lack of workers and reduced demand has also led to shipping companies decreasing the number of cargo ships sailing. The delays in the acquisition of freights have significantly contributed to the growth of blank sailings, referring to shipping firms skipping one port or altogether canceling their ship’s voyage. This causes delays in the delivery not only of goods but also consumer parcels in many parts of the globe. 


As economies continue to bounce back from the crippling effects of the COVID-19 pandemic three years ago, new disruptions brought fresh challenges to the global supply chain. China’s latest COVID surge led to factories operating at limited capacity and ports experiencing bottlenecks. Countless Chinese manufacturers could not complete orders in time, and freight rates plummeted along with it. 

The fear of another COVID-19 outbreak is already expected, especially with the country celebrating the Lunar New Year in late January 2023. But reports show that port congestion and freight procurement have improved in recent weeks, with pickup charges increasing by almost 10%. This can be a good sign that the supply chain will gradually go back to normal, despite the worries of another COVID surge in China. 

Looking for a Reliable Freight Forwarder in the Philippines? 

The whole shipping fiasco can be daunting for Filipino importers and exporters, but partnering with a reliable freight forwarding company can help you navigate the possible hurdles you’ll encounter. Excelsior Philippines has been in the industry for more than two decades, providing our clients with peace of mind that their shipments will arrive at their destination safely. To learn about our services, contact us now by clicking here or calling (+632) 8525-9775. 

Excelsior Worldwide Logistics Corp.