Freight brokers and freight forwarders are two unique professions in the logistics industry. Both brokers and forwarders use the services they provide to make shipping goods from one point to the next an easier process. That said, many shippers can often get confused by which services each profession is responsible for.
Freight brokers and freight forwarders are similar in that both are registered with Federal Motor Carrier Safety Administration (FMSCA). This makes shipping easier and cheaper for shippers. Freight brokers differ because they don’t take ownership of the freight or use their own Bills Of Lading (BOL) as freight forwarders do.
To better clarify how freight brokers vs freight forwarders stand out from one another, we’ve created this guide on the responsibilities of these professions and when you should use each.
Freight brokers are people who work between the shipper of the goods and the carrier who will transport them. Shippers hire freight brokers to find them a carrier that has the accommodations to get their freight transported.
The primary tasks of a freight broker include:
Before someone can become a freight broker they must register with the Department Of Transportation’s (DOT) Federal Motor Carrier Safety Administration or FMSCA.
A freight forwarder is someone who performs all of the same responsibilities that freight brokers do. However, freight forwarders also take on many more responsibilities than freight brokers do and as a result, are much more actively involved in the journey of a shipment.
One feature of freight forwarders that sets them apart from freight brokers is that they more commonly ship freight internationally rather than domestically. Like with freight brokers, it’s a legal requirement that freight forwarders register with the FMSCA.
Before understanding their difference, it’s important to understand what freight brokers and forwarders have in common. As we’ve briefly mentioned, both professions share many similarities.
One way that freight brokers and freight forwarders are similar is that they both track the shipper’s freight. They can even inform the shipper if their freight shipment has run into any delays.
Some of the methods that both forwarders and brokers use to track a shipper’s freight are:
With these avenues available, a broker or forwarder is able to give a shipper updates on where their freight is at throughout the shipping process.
When it comes to moving freight, whether internationally or domestically, having assistance from a trained professional goes a long way. Freight forwarders and freight brokers have this knowledge that you can take advantage need.
Forwarders and brokers gain experience through:
Some of the most experienced freight brokers and freight forwarders you can find are the ones that work independently. Typically, these individuals have many years of experience working for other companies that they acquired before starting their own business.
That said, freight brokerage and freight forwarding companies are run by experienced individuals. These companies have more personnel and better resources at their disposal than an independent broker or forwarder would have.
For a freight broker or freight forwarder to serve as the middleman between carriers and shippers, they need to have connections with various personnel throughout the supply chain industry. The business partners they work with all provide some type of service in the supply chain.
Some of the partners that brokers and forwarders work alongside include:
These partners are what allow brokers and forwarders to move freight across great distances with ease.
Another service aspect that freight brokers and freight forwarders both share is that they can negotiate rates with the carriers that will be transporting the freight. Since forwarders and brokers have established relationships with various freight carriers, it’s much easier for them to get a rate that is more beneficial for the shipper who hired them.
On their own, a shipper would be less likely to negotiate a good rate for themselves. This is due to the following reasons:
Having a freight broker or forwarder negotiate a rate for you will make shipping more cost-effective.
Read our article on how to choose a freight forwarder to learn how to pick one.
Many of the similarities the freight brokers and freight forwarders have are why so many shippers have trouble differentiating between the two. That said, freight brokers and freight forwarders have their own unique differences.
These differences include the following:
We’ll explain each of these differences in depth and how they affect the performance of brokers and forwarders.
One distinct factor that sets freight forwarders apart from freight brokers is that freight forwarders take over physical possession of the freight being shipped. Being able to take physical possession lays the groundwork for freight forwarders to perform other services.
Additional services provided by freight forwarders include:
These are some of the ways that freight forwarders take more of an active role in handling freight shipments. Since freight brokers don’t take over physical possession of your goods, they’re unable to perform as wide of a range of services.
Another distinguishing feature between customs brokers and freight forwarders is that brokers usually don’t handle or fill out paperwork on behalf of the shipper who hired them. Freight forwarders use their own bills of lading, which are referred to as house bills of lading (HBL).
Freight brokers can complete documentation for shippers that hire them. That said, they’re much less likely to perform this service than a freight forwarder will be.
Forwarders and brokers can both transport freight in the domestic United States and internationally. However, freight forwarders arrange international shipments at a much more frequent rate than freight brokers do.
Additionally, forwarders have the authority from the FMSCA to transport freight internationally. Freight brokers can handle international shipments, but they tend to focus on domestic shipments because they’re limited in their ability to transport goods as far as freight forwarders can.
Since freight forwarders more often facilitate the transport of freight internationally, they have to perform a wider range of transportation services than a freight broker would.
These modes of transport might include:
To transport freight internationally, your freight will have to cross a variety of different terrain to get to its destination promptly. More often than not, international shipping requires ocean or air transport.
That’s why freight forwarders partner with a variety of carriers that ship using the above-mentioned modes of transportation to get their goods to a destination promptly. As a result, freight forwarders provide a wider range of services covering a wider range of products.
Using a freight broker and freight forwarder each has its own distinct advantages. Deciding which of these to use can often be difficult for shippers. A good rule of thumb to use when determining which one to use is figuring out how far you need to send your freight.
If you only need to ship your freight somewhere in the domestic U.S., then you should go with a freight broker. For international shipments, freight forwarders should be your go-to option.
Freight brokers might perform fewer services than forwarders, but you won’t need as many when transporting your goods domestically. Freight forwarders, on the other hand, offer more services out of the necessity that international shipments demand.
Both the freight broker and freight forwarder markets in the U.S. are huge. Therefore, when you decide which service you need, you won’t have trouble finding a broker or forwarder that can help you.
| Size Of the Freight Broker Market | $1.164 Billion |
| Size Of the Freight Forwarder Market | $145 Billion |
Provided by Verified Market Research and Statista
Learn more about freight forwarders and their role in logistics here.
Freight forwarding services USA is your home for all of your freight forwarding needs. Moving your goods internationally takes significant amounts of preparation. We make the shipping process easier by considering all of these challenges.
We can also transport your freight using ocean or international air shipping. Ocean shipping is great for bulk loads, while international air is the better option when you need to get goods moved fast.
No matter what type of freight you’re shipping, we can offer the following services:
Lastly, we offer 1-on-1 consulting sessions to shippers. During these sessions, we’ll show you what your responsibilities are as a shipper, answer your questions and show you how we’ll provide assistance.
Contact us today at (866)-941-8081 or fill out your free quote today.
