What is a freight forwarder?
Many people wonder what is a freight forwarder and what do they do? This article has valuable information that may shed light on that question. Freight Forwarding is a vital part of our global economy. Various types of businesses may create profitable opportunities by implementing international shipping. However, managing the shipping of your cargo from the United States to another country can be a burden. That is why most businesses utilize the services of freight forwarders. The safe and timely transportation of cargo from point A to point B is a freight forwarders primary focus. However, a freight forwarder does not transport any goods. Freight forwarders are multi-function agents and/or operators who arrange the shipment of cargo from and to anywhere in the world. They do this on behalf of their clients or what is called a BCO (Beneficial Cargo Owner).
Apart from arranging the transportation, a freight forwarder also prepares and processes the documentation while also performing all activities related to the safe shipment of cargo. They do so using an NVOCC or a VOCC which uses either their own service contract or the BCO’s service contract. However, an ocean freight forwarder that provides services in the USA is required to be licensed by the FMC and must also submit proof of financial responsibility for payment of any claims that may arise or submitted while they are responsible for shipments.
Defining “What is a freight forwarder”
BusinessDictionary.com currently defines a freight forwarder as an “agent or firm specializing in arranging shipping of merchandise on behalf of its shippers. It usually provides a full range of services including: tracking inland transportation, preparation of shipping and export documents, warehousing/storage, booking cargo space, negotiating freight charges, freight consolidation, cargo insurance, and filing of insurance claims. Freight forwarders usually ship under their own bills of lading or air waybills (called house bill of lading or house air waybill). Their agents or associates at the destination (overseas freight forwarders) provide document delivery, de-consolidation, and freight collection services. Also called forwarder.”
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What does a Freight Forwarder Do?
To fully understand what a freight forwarder does you first need to understand what goes in to transporting cargo internationally. It is much easier to understand what a freight forwarder does not do and that is actually transport your goods. A freight forwarder is essentially the middle-man or intermediary between the BCO or shipper and the many carriers worldwide. A freight forwarder will usually have many relationships established with various types of transportation services such as air freight providers for expedited shipping, ocean shipping on cargo ships around the world, trucking / drayage carriers, and rail freight. These relationships with ocean liners, air / rail freighters and trucking companies allow them to negotiate the best possible rate for you.
Price is not the only variable they measure your estimate by. A good freight forwarder will always aim to meet their clients needs while also protecting their interests. Having an agent who is experienced in the process, documentation, and shipping requirements related to international shipping gives you a valuable advantage. It also frees your business from dealing with insurance requirements, customs documentation, customs clearing, and much more.
Do I Need To Use A Freight Forwarder?
Many shippers utilize the services of a freight forwarder for one primary reason, it almost guarantees that you have someone who is versed in the shipping process and can guide you every step of the way. A freight forwarding firm takes on majority of the logistics that are involved in shipping your cargo from one international destination to another. This is a responsibility many shippers would not be able or willing to handle. Negotiating rates, advising shippers on route and timing, and processing paperwork are not the only tasks a freight forwarding agent handles. They also work their network to create a shipping plan that balances speed, cost, and reliability.
So do you really need a freight forwarder? No, however working with one may help you speed up your shipment process and the transport itself. Avoid hefty fines and delays due to poor documentation and planning, and simply enjoy the freedom of a daunting burden. A well established and experienced freight forwarding firm can help save you immeasurable amount of time and potential losses while providing you with savings with competitive rates. With that said, a reliable and knowledgeable freight forwarder in an asset to any company shipping cargo internationally. They are your best source to getting your goods from “dock to door” if needed. We now hope that when someone asks you what is a freight forwarder, you know the answer.
Below is an outline of the many advantages a freight forwarder offers:
- FCL and LCL Services
- Customs Clearing & Documentation
- Insurance Requirements and Coverage
- Price Negotiating and Bidding
- Logistical and Route Planning
- NCOCC Documentation
- Bills of Lading
- Warehousing and Storage
- Risk Assessment Management