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Freight Forwarder

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Freight Forwarder

Importing and exporting goods is essential for many large and small businesses. While shipping internationally provides substantial business opportunities, it can be very daunting. If you’re unaware of the term “freight forwarders,” it may seem confusing. To clarify, freight forwarders are often confused with another word for a freight shipping company. Forward Forwarders are also not a partner in import and export services. They take on much more responsibility.

What is a Freight Forwarder?

A freight forwarder is a firm that arranges cargo on behalf of shippers. In most cases, freight forwarders provide a variety of supply chain services, including:

  • Warehousing and storage services
  • Cargo insurance and customs compliance
  • Ocean or air freight transportation
  • Inland transportation from the origin and to destination
  • Preparation of documentation
  • Consolidation

Most freight forwarders will use their bill of ladings or waybills. Destination agents, the freight forwarders on the consignee’s freight forwarders overseas, step in. These agents provide delivery of documents, deconsolidation, and collection or delivery. In layman’s terms, a freight forwarder is an entity that arranges the import and export of cargo.

What Does a Freight Forwarder Do?

Many things go into the logistics of international cargo shipping. While freight forwarders handle shipments, it’s vital also to get a handle on what they don’t do. This, in turn, can backtrack into what they do for shippers and customers. There is one golden rule to consider when it comes to freight forwarders. In most cases, freight forwarders are not the ones who move the cargo.

Instead, freight forwarders represent intermediaries. They are the step between shipping customers and the services that move cargo. This goes for ocean freight, land transportation, air freight, rail services, and more.

Freight forwarders use existing relationships to negotiate the lowest price for cargo moves. These moves occur along the most effective routes through a bidding /contract process. In the end, the goal is to find a carrier that provides the best balance of cost, speed, and reliability. They also handle the logistics required for shipping goods internationally. This is a complex burden of a task for most clients.

History Of Freight Forwarding

One of the earliest freight forwarders was Thomas Meadows and Company Limited of London, England, established in 1835. According to “Understanding the Freight Business,” written and published by the executive staff of Thomas Meadows and Company in 1972, the advent of reliable rail transport and steamships created a demand for the fledgling freight forwarding industry. Trade developed between Europe and North America, creating additional demand. The first international freight forwarders were innkeepers in London who held and re-forwarded the personal effects of their hotel guests.

The original function of the forwarder was to arrange for carriage by contracting with various carriers. Forwarder responsibilities included advice on documentation and customs requirements in the country of destination. His correspondent agent overseas looked after his customers’ goods and kept him informed about matters that would affect the movement of goods.

In modern times, the forwarder accepts the same responsibilities. It operates as a domestic carrier with a corresponding overseas agent or branch office. In a single transaction, the forwarder may act as a carrier (principal), agent for his customer, or both.

Freight Forwarders vs Freight Brokers

Freight brokers and freight forwarders are both part of the freight industry. Both coordinate the movement of freight for a third party, connect shippers and carriers, negotiate freight rates, and track and ensure delivery.

But there is one key difference. A freight broker coordinates the connection between shippers and carriers but does not handle freight directly. A freight forwarder actually takes possession of the freight, and often stores, packs, and ships it.

In short, a freight forwarder takes on a lot more responsibility for the goods shipped than a freight broker does. Let’s take a deeper look at each one and the differences between the two.

Freight Forwarding Around The World

Freight forwarders around the world face many rules and regulations. Below are specific differences between Canada, the United Kingdom, and the United States. Freight Forwarding in CanadaFreight Forwarding in the United KingdomFreight Forwarding in the United States

Pros and Cons of Freight Forwarding

As with any logistics service, there are many factors that play into the end-to-end process. Freight forwarding may seem like a win-win situation for customers. Despite this, there are also some caveats to be aware of before diving in with a forwarder service. Below are a few of the advantages and disadvantages of freight forwarding.Advantages of Freight ForwardersPotential Disadvantages of Freight Forwarders

Do You Need Freight Forwarding?

Freight forwarding is easy to take your business and cargo to the next level. But, there are times when it is more effective to ship directly with the shipping company, especially when they provide the same end-to-end supply chain services as forwarders, without the markup.

What Does a Freight Forwarder Do?

A freight forwarder arranges the transportation and storage of freight for their shippers. Unlike a freight broker, a freight forwarder takes a hands-on approach by accepting the responsibility of their customer’s cargo in their stead, making them responsible for the potential damage—or worse, loss—of the shipment. They have their own Bill of Lading and occasionally have their warehouses to store goods.

Other Services Include:

  • Negotiating freight charges
  • Preparing shipment documents
  • Freight consolidation
  • Taking care of freight space
  • Tracking shipments
  • Warehousing
  • Freight insurance
  • Filing freight insurance

Is Freightcenter a Freight Forwarder?

FreightCenter is not a freight forwarder; it is a freight broker. We act as your freight shipping middleman, helping you find the perfect carrier for your freight. We don’t physically handle your shipments, but we can get you someone that can! FreightCenter is a non-asset-based third-party logistics company with years of experience and relationship building in the logistics industry.

Your Total Freight Solution

We offer significant volume discounts from today’s top U.S. trucking companies. Our services are a total freight solution for all your transport needs, whether in the first or last mile. Our dedicated freight agents will handle your booking, paperwork, and scheduling. They can assist with recommending the best fit carrier, and online tracking is provided for every shipment.

Get a free online quote today, or get in touch with one of our expert agents at 800.716.7608.

Look Up More Freight Terms

Document transfer fee/document handover fee

International freight forwarders, Non-Vessel-Operating Common Carriers (NVOCCs), and customs brokers often charge for transferring documents to another transportation company at the destination. This fee is a part of the ocean freight charges, being paid by the importer at the port of discharge in the International Commercial Term (incoterm) FOB (free on board) and by the exporter at the origin in the incoterms CFR (cost and freight), CIF (cost, insurance, and freight) and DDP (Transportation cost from factory to delivery port, customs clearance at delivery port, freight, customs clearance at the discharge port, transportation from discharge port to importer factory).[4] This fee is separate from documentation fees charged by carriers and NVOCCs as part of the freight charges on a bill of lading and is different from other fees for document preparation or cargo release.

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