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Freight Forwarder

A freight forwarder arranges shipments for individuals and companies and acts as an agent to dispatch shipments via carriers like ships, airplanes, trucks, and railroads. Freight forwarders typically arrange international cargo shipments and process required documentation. They review documents like commercial invoices, export declarations, bills of lading. Freight forwarders operate as agents for their clients and coordinate with overseas agents or offices to arrange international transport.

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501 views3 pages

Freight Forwarder

A freight forwarder arranges shipments for individuals and companies and acts as an agent to dispatch shipments via carriers like ships, airplanes, trucks, and railroads. Freight forwarders typically arrange international cargo shipments and process required documentation. They review documents like commercial invoices, export declarations, bills of lading. Freight forwarders operate as agents for their clients and coordinate with overseas agents or offices to arrange international transport.

Uploaded by

Sreekese Ps
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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A freight forwarder, forwarder, or forwarding agent is a person or company that organizes

shipments for individuals or other companies and may also act as a carrier.[1][2][3] A forwarder is
often not active as a carrier and acts only as an agent, in other words as a third-party (non-asset-
based) logistics provider that dispatches shipments via asset-based carriers and that books or
otherwise arranges space for these shipments. Carrier types include ships, airplanes, trucks, and
railroads.

Freight forwarders typically arrange cargo movement to an international destination. Also


referred to as international freight forwarders, they have the expertise that allows them to prepare
and process the documentation and perform related activities pertaining to international
shipments. Some of the typical information reviewed by a freight forwarder is the commercial
invoice, shipper's export declaration, bill of lading and other documents required by the carrier or
country of export, import, or transshipment. Much of this information is now processed in a
paperless environment.

The FIATA short-hand description of the freight forwarder as the 'Architect of Transport'
illustrates clearly the commercial position of the forwarder relative to his client. In Europe there
are forwarders that specialise in 'niche' areas such as railfreight and collection and deliveries
around a large port. The latter are called Hafen (port) Spediteure (Port Forwarders). A forwarder
in some countries may sometimes deal only with domestic traffic and never handle international
traffic.

Contents
[hide]

 1 History of freight forwarding


 2 Freight forwarder roles in different countries
 3 Document transfer fee/Document handover fee
 4 Typical day for a freight forwarder
 5 References

[edit] History of freight forwarding


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

In modern times the forwarder still carries out those same responsibilities for his client. He still
operates either with a corresponding agent overseas or with his own company branch-office. In a
single transaction, it can happen that the forwarder may be acting as a carrier (principal) or as an
agent for his customer or both. [4]
[edit] Freight forwarder roles in different countries
Australia

In Australia most licensed Customs Clearance Agents (now more commonly referred to as
Customs Brokers), operate under a freight forwarder.

Bangladesh

In order to start as a freight forwarder a person needs a government license.

Ireland

Even in smaller markets, such as Ireland, the role of freight forwarders is strategically important.
International merchandise trade is worth €148 billion to the Irish economy [5]. 82% of
manufactured products are exported, further highlighting the importance of the freight
forwarders to a nations' economy. Associations like the Irish International Freight Association
and FIATA help maintain the professionalism of this industry through educational and
representative roles. The FIATA Diploma in Freight Forwarding is an example of how this can
be achieved.

Nigeria

Freight-forwarding in Nigeria has been in place since the exporting of groundnut as a cash crop
since 1914, though not initially as freight forwarding but as the means of transportation of both
goods and services from one country to another. Following the methodology of their British
forebears, agents were used to facilitate the transport of goods and services.

UK

In the U.K., freight forwarders are not licensed, but many are members of the British
International Freight Association (BIFA). Freight forwarders in the UK consolidate various
goods from different consignors into one full load for road transport to Europe, which is often
known as groupage. Some freight forwarders offer additional related services like export
packing.

USA

In the U.S., companies that handle international ocean freight must be licensed by the Federal
Maritime Commission as Ocean Transportation Intermediaries. An Ocean Transportation
Intermediary is either an ocean freight forwarder or a non-vessel operating common carrier
(NVOCC). An ocean freight forwarder is an individual or company in the United States that
dispatches shipments from the United States via common carriers and books or otherwise
arranges space for those shipments on behalf of shippers. Ocean freight forwarders also prepare
and process the documentation and perform related activities pertaining to those shipments. An
NVOCC is a common carrier that holds itself out to the public to provide ocean transportation,
issues its own house bills of lading or equivalent document, but does not operate the vessels by
which ocean transportation is provided. Companies may obtain both licenses and may act in both
capacities even on the same shipment. The U.S. legal distinction between the two is that a freight
forwarder acts as the agent of a principal (typically a shipper or consignee or carrier) and the
NVOCC is a transportation company (carrier) that is physically responsible for the carriage of
goods and acts as its own principal. Companies acting strictly as an Ocean Freight Forwarder
typically do not issue their own contract of carriage (bill of lading) and as agent are generally not
liable for physical loss or damage to cargo except in cases of errors in judgment or paperwork or
fiduciary responsibility. NVOCC's act as ocean freight carrier and issue their own bill of lading
and are legally responsible for physical loss or damage in accordance with the terms and
conditions of their bill of lading and tariff. Similar to other countries, freight forwarders that
handle international air freight will frequently be accredited with the International Air Transport
Association (IATA) as a cargo agent however they must obtain an Indirect Air Carrier (IAC)
certification from the Department of Homeland Security (DHS).

[edit] Document transfer fee/Document handover fee


International Freight Forwarders and NVOCCs and customs brokers often charge a fee for
transferring documents to another transportation company at destination. This fee is a part of the
ocean freight charges, being paid by the importer at the port of discharge in the incoterm FOB
(Free On Board) and by the exporter at the origin in the incoterms CFR (Cost and Freight), CIF
(Cost, Insurance and Freight) there are many other incoterms, those are the most common. This
fee is separate from documentation fees charged by steamship carriers and NVOCCs as part of
the freight charges on a bill of lading and is separate from other fees for document preparation or
for release of cargo. Some companies may call this an admin fee, doc fee, doc transfer or other
name but it exists in some form in most destinations around the world and is well known to most
importers and exporters. Steamship carriers do not have this fee.

[edit] Typical day for a freight forwarder


A typical day for a freight forwarder would primarily consist of talking with clients and
warehouse around the world. Taking this information and passing it along to the appropriate
party whether that be a SSL (Steamship Line), United States Customs or the customer
themselves. Along with making sure that the freight the client is importing or exporting gains
entry into the country a freight forwarder must(most of the time) arrange for said freight to be
picked up and delivered to the final consignee's place of business. This requires contacting
trucking companies, rail lines and even sometimes exporting the goods to a different country for
final delivery. A lot of this is now done over the Internet and phones. A typical freight forwarder
will spend most of the day at a desk in front of a computer.

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