What does a Freight Forwarder do?
To understand the role of a Freight Forwarder, it is important to differentiate two misunderstood words; freight and shipping.
Traditionally this term referred to the products or goods that are being transported by ship (sea shipping). These days it also refers to goods that are commercially transported by air, rail, or by road in container trucks. The term freight is more commonly used in reference to bulk goods.
Freight is categorised into air freight and shipment freight. Shipment freight is categorised as express, parcel, household goods, and freight.
Traditionally this referred to the transportation of goods by sea. Nowadays, it can be by sea, air or road. Shipping can be commercial or non-commercial. Shipping is usually used when referring to the transportation of goods in bulk for merchandisers.
Difference between Freight and Shipping
- Freight is used in the case of goods in bulk usually of one kind like oil cargo. Shipping is used for smaller amounts of goods usually put together to make a viable cargo for example cars and household goods.
- Freight is used only in commercial transportation while shipping can be non-commercial for example transportation of humanitarian aid.
- Freight uses container ships, railroad cars, and large container trucks while shipping uses air and smaller trucks.
- Freight is usually cheaper than shipping in dollar to weight comparisons.
Who is a Freight Forwarder?
A manufacturer or exporter selling their goods overseas may not have the knowledge of how to find Road Freight, Sea Freight or Air Freight Carriers, to all the hundreds of countries around the world, nor the special customs documentary requirements their buyers in these countries will require. Why should the exporter need to know all this about international shipping, that’s what the Freight Forwarder is for! He is a bit like a travel agent, but instead of knowing how to find your best holidays, the Freight Forwarder knows the best Sea, Air and Road carriers, from the hundreds of international shipping carriers, who advertise shipping overseas.
The Freight Forwarder guides the exporter on all aspects of commercial shipping overseas, from Export Packing, Cargo Transit Insurance, shipping services, shipping documents, export custom requirements, port security and destination logistics requirements. The Freight Forwarder will also explain the seller’s responsibilities and what the buyer’s responsibilities are.
Although the freight forwarder handles the detail of the exporter’s international shipping, the freight forwarder acts as the shipper’s agents only. The Freight Forwarder will rarely actually move the freight themselves, the freight forwarder will not normally own the trucks, the warehouse and certainly not own the sea vessel or the aircraft.
The freight forwarder acts as an intermediary between the shipper/seller of the goods or the overseas buyers and with the actual shipping carriers. A good freight forwarder has established relationships with the main international shipping carriers serving all countries around the globe, negotiating the best shipping freight costs and services, appropriate to the export shipper or overseas buyers’ delivery timelines and the cargo specifications.
Advantages of using a Freight Forwarder
The ordinary exporter will not have the knowledge of the procedures, processes, and documentation of international shipping. There are several advantages of using a freight forwarder in sea freight shipping:
- Handling of ancillary services needed in international shipping including customs documentation, insurance, security and banking among others.
- The forwarder directly provides services including warehousing, risk assessment, and management, processing bills of lading, acting as a conduit of international payments and providing Non-vessel-operating common carrier documentation.
The Freight Forwarder can be said to be the facilitator of movement of goods from ‘dock to door.’
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