When Do You Pay To A Freight Forwarder?

Discover the Secrets of Payment Timing with Freight Forwarders: A Conversation with Unicargo's Founder

Hey there!

Are you navigating the world of freight forwarding payments with uncertainty?

Wondering when and how to manage your expenses effectively?

How about diving into a conversation that unpacks the ins and outs of paying freight forwarders while unlocking valuable insights into securing better payment terms?

Cool, no?

Well, my name is Vova Even, and I recently sat down for an eye-opening chat with Refael Elbaz, the brilliant mind behind Unicargo – a leading digital freight forwarding platform.

Refael and I delved deep into this topic and explored strategies for securing favorable payment terms.

And that's not all – we also uncovered valuable tips on navigating the complexities of shipping payments.

Plus, I shared an exclusive special offer from Unicargo that you won't want to miss.

Now, if you're intrigued and eager to learn more, you're in luck!

This article lays out everything we discussed in the same conversational format.

So, grab a cup of coffee, sit back, and let's embark on a journey to unravel the secrets of smart shipping together.

Related Read: 3 Best Freight Forwarders For Amazon FBA (I Worked With All Of Them)

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Vova: So, when exactly do we have to pay?

Is it when you guys pick up the cargo?

Or is it when you check the cargo in your warehouse and make sure it matches what we told you?

How does the whole payment process actually work?

Refael: That's a really good question, actually, a great one!

You know, I often see online sellers grappling with this dilemma.

They wonder, should they cough up the cash upfront?

Or is it better to settle the bill after the goods are delivered?

It's a real head-scratcher, isn't it?

And, here's the thing: there's no one-size-fits-all answer to this.

It really depends on your unique situation.

Let me break it down for you.

Imagine you're a seasoned seller, shipping out hundreds of packages every month.

Or maybe you're just starting out, with a handful of shipments under your belt.

Your payment terms might vary based on factors like your shipping volume and your history with a freight forwarder.

Most freight forwarders you'll come across will offer you payment terms like net 30, where you settle the bill 30 days after the invoice is issued.

Or perhaps you can pay after the delivery – they're pretty flexible with their terms.

Now, your company's setup also plays a role here.

If you're based in the US, Europe, or Israel, it's relatively easy to check your company's history.

You can run a quick credit score check to see if you're good for the money.

That's exactly what our finance team does at Unicargo – they make sure everything checks out before we proceed.

If your credit score looks good, we're happy to extend credit terms to you.

It's a win-win situation – you get a smooth payment process, and we get another satisfied customer.

But if you're someone we don't know, like a random visitor from the web filling out a quote request for the first time, we might ask for payment upfront.

It's just a precautionary measure to ensure everything goes smoothly.

Let me explain what I mean by payment in advance.

First, we'll pick up your cargo and coordinate with our team in China and the supplier.

After confirming that the cargo matches the details you provided, we'll send you an invoice for payment.

Once that's settled, we'll proceed with the shipping process smoothly.

Sometimes, someone might request a quote for a 5 CBM shipment, but when we pick it up, it turns out to be 8 CBM instead – almost double the size initially estimated.

So, here's the deal: sometimes, there's a discrepancy between what you think you're shipping and what actually gets loaded onto the truck.

It's not really a mix-up, more like a misunderstanding or miscommunication.

The supplier might not provide accurate details, leading to surprises when we pick up the cargo.

That's why we prefer to start the shipment process before sending you an invoice.

This way, we avoid the hassle of issuing multiple invoices due to discrepancies in cargo sizes.

We'll pick up the cargo, inspect it at our warehouse, measure it, and then proceed with the shipment – all without bothering you for payment upfront.

Once we've got your shipment sorted out, we'll need you to settle the payment.

But here's the key point: whether you're a newbie or a seasoned shipper, you can still negotiate payment terms.

How?

Well, it's all about building relationships rather than just transactions.

Reach out to your freight forwarder, have a chat, maybe even hop on a Zoom call

Tell them about your business, who you are, and try to establish a connection.

Remember, you're dealing with people here.

Once they see you're in it for the long haul, looking to build a solid business relationship, they'll likely be open to discussing payment terms with you.

If someone seems legit after we talk to them – like they know their stuff – even if it's their first time shipping with us, we'll let them pay after the delivery.

Honestly, it's not a huge risk for us.

But managing finances with online clients does require some know-how and experience.

Most of our clients find us through online channels, so we've had to develop solid procedures to avoid losing money.

The thing is, every freight forwarder deals with unpaid bills every year.

It's just part of the business.

Some big players like Amazon sometimes don't pay their bills, and then they just vanish.

Every year, freight forwarders end up losing some money because of this.

The amount lost depends on how big the freight forwarding company is and how many shipments they handle.

As you can imagine, the larger the company, the more money they might lose due to unpaid bills or debts.

So, it really boils down to the size of the company and their experience dealing with online sellers.

Vova: So, as you pointed out, it comes down to who you are and what experience you bring to the table in the industry.

If you have a solid reputation or some clout in the industry, you might have more room to negotiate different payment terms.

But for newcomers, it's pretty standard to pay upfront, at least in the beginning.

I remember when I first started shipping, I paid in full upfront because, well, it just seemed like the right thing to do.

After all, they didn't know me, so I figured it was fair.

You know, it's like being the new kid on the block – you might feel a bit like a cookie, not quite sure where you fit in yet.

So yeah, it all depends on your circumstances and how confident you feel diving into the shipping world.

Refael: Exactly, you're right. Even if a seller is asked to pay upfront initially, that's totally fine.

But after you've had a few successful shipments with the same provider, it's very common to discuss setting up payment terms.

It's all about acknowledging the growth of your business and the relationship you've built with your provider.

Asking for payment terms is a normal part of being a business owner, and you should absolutely feel comfortable doing so.

After all, it's your right to negotiate terms that work for you.

Paying upfront isn't the norm in the shipping world, especially with traditional freight forwarders.

They typically handle bigger accounts and are accustomed to working with established companies in the import-export business.

These companies usually don't require payment upfront.

Instead, they prefer to establish a relationship with their clients over time.

As a business owner, it's important to engage with your freight forwarder, whether it's through online meetings or face-to-face discussions, to negotiate payment terms that suit both parties.

Building a solid relationship with your provider can lead to more favorable payment terms in the long run.

The Bottom Line

So, what's the bottom line of my chat with Rafael?

Well, it's simple: when it comes to paying freight forwarders, understanding your options and negotiating payment terms can make all the difference.

Whether you're a seasoned shipper or just starting out, building a solid relationship with your provider is key.

And with Unicargo's expertise and special offers listed below, navigating the world of shipping payments becomes a whole lot easier.

Unicargo Partner Program - Get Free Audit and Supply Chain Optimization

And to sweeten the deal, I've also got an exclusive 10% discount for your first shipment.

Simply use the coupon code PROAUDIT10 during the booking process.

So, take what you've learned here and apply it to your shipping strategy.

Here's to smooth sailing ahead!