What is the role of a freight forwarder? A freight forwarder specializes in arranging the transportation of goods from one place to another, ensuring that everything runs smoothly. Without their expertise, importing or exporting goods can become a daunting task filled with unexpected challenges.
The International Federation of Freight Forwarders Associations (FIATA) states that freight forwarders are crucial in the world of global trade. Their role is to coordinate shipments and manage the complexities of international logistics. They handle customs clearances, transport arrangements, and ensure documentation is in order.
To understand what freight forwarders do and their responsibilities, continue reading our comprehensive guide.
In logistics, the movement of goods is essential to the global commercial market. However, one may ask, “how is the transportation of goods handled?” The process of getting exports and imports from their country of origin to their destination takes careful and precise planning.
This is where freight forwarding comes into play. Freight forwarders cover all modes of transportation that revolve around domestic and international freight in commodity-based shipping.
Various challenges and details must be managed when dealing with the complex market of global commerce. These challenges include working closely with exporters and importers to arrange transportation to and from warehouses, direct transit to the ports, air and rail terminals, and also over-the-road truck shipping.
A wide array of solutions is commonly deployed to deliver your goods safely and on time.
Forwarders are familiar with these solutions. Let’s break down the role and duties of a freight forwarder in shipping.
A freight forwarder serves as an intermediary between exporters and importers worldwide. They are directly responsible for establishing and organizing modes of transportation in international shipping.
The freight forwarder creates and deploys logistical strategies through their substantial network of trust partners to meet the needs of your business. Essentially, they act as an organizer and mover of goods through transport management and planning services.
These international shipping experts specialize in networking and building relationships with carriers in multiple countries. Through these vast networks, they can provide the best price and availability to meet the needs of your business’s timetable.
A freight forwarder’s entire function is to take the burden off the shoulders of their customers. These agents also have a wide breadth of knowledge and expertise about adhering to international rules and regulations and proper documentation filing.
These wizards of logistical planning and management wear many hats while performing their services.
Freight forwarder agents not only facilitate transportation arrangements, but can also offer the following services to their customers worldwide:
These are just samples of what this intermediary in international freight shipping regularly handles.
For a more detailed understanding of what a freight forwarder does, let’s see how the job compares and combines with other customs processes.
Before hiring a forwarder, learn about what documents are required for freight forwarding.
A freight forwarder can act as an (IOR) but it’s not a common practice. The IOR is responsible for ensuring that imported goods comply with local regulations. They bear the liability for the shipment. While freight forwarders have the expertise to manage shipments, it’s usually the buyer, recipient of the goods, or a third party broker that acts as the IOR.
Similar to the IOR, a freight forwarder can technically serve as the EOR as well: however, it’s not common. The EOR is responsible for the accuracy of information provided on export documentation. They ensure compliance with export regulations.
Usually, the EOR is the manufacturer, sender, or a broker.
The US Principal Party in Interest (USPPI) refers to the entity primarily responsible for exporting goods from the country.
Frequently, this party is the manufacturer, seller, or order party. It’s highly uncommon for forwarders to also play the role of USPPI, but it does happen.
Yes, a freight forwarder can broker freight. In fact, many freight forwarders offer brokerage as part of their suite of services. Their in-depth knowledge of transport networks and regulations makes them effective in this role.
Freight forwarders can issue a bill of BoL. When a freight forwarder issues a BoL, it’s often referred to as a ‘House Bill of Lading.’
This document is used when a forwarder consolidates multiple smaller shipments into a larger one to simplify transport.
The freight forwarding process is generally accomplished through Incoterms® which help define international shipment trade terms. Freight forwarding agents often work closely with importing and exporting goods directly.
Whenever an importer orders goods from an overseas supplier, arrangements are made to transport those goods. The freight forwarder makes arrangements for a container and the means to get it to the shipping point of origin.
This point of origin is usually an ocean port or an air freight terminal. There are pros and cons to both methods of international transportation. The following information illustrates why ocean freight or air freight are used in shipping.
| Pros | Cons |
| Fast max speed (575-600 MPH) | Limited carrying capacity |
| Quicker load and unload times | Very high carbon footprint |
| Freight is sorted out by supply chain staff | More expensive than ocean freight |
| Pros | Cons |
| Favors large or bulk cargo | Slow max speed (14-23 MPH) |
| Very low carbon footprint | Delays can affect shipping |
| The most cost-effective means of shipping | Increased surcharges during peak season |
Once they determine the best way to ship the order to its destination, the freight forwarder arranges transportation with an ocean or air freight line. This includes filing the necessary paperwork.
If a warehouse is farther from the ocean port or air terminal and requires extensive inland transportation, two options are available: truckload and rail line transport services.
Once the goods have made their journey across the ocean, the process continues. The agent will reverse the actual process of getting goods from a warehouse to the port or terminal.
For example, when the goods arrive at the port or terminal, the freight forwarding agent will arrange transportation and unloading from the port or terminal of the destination to the importer’s warehouse or distribution center.
The freight forwarder and the freight broker perform similar duties. However, some notable exceptions between the two do exist.
Let’s review some key differences between these roles.
Freight Broker
Freight Forwarder
The key takeaway here is that brokers do not physically handle freight, they manage the shipment. A forwarder does that while also arranging transport in and out of the point of origin.
Through these differences in role and responsibility, both forwarders and brokers are involved in the movement of goods between buyers and sellers. The freight forwarder is more directly involved, while the broker takes a more hands-off approach.
Need to know more about how these two differ from an NVOCC? Check out our article.
Using the services of a freight forwarder is an advantage for anyone who wants to import or export goods worldwide. The most obvious advantage is the forwarding company’s network and assets that are available at any time.
There are several essential benefits of freight forwarding; some examples are:
These are just a few of the benefits enjoyed by the clients of freight forwarders. The entire point of freight forwarding is to make it easy and painless to ship goods anywhere in the world with little to no effort from the shippers.
Why worry about how to ship your goods anywhere in the world? When dealing with international shipping, it’s best to have a trusted partner at your side at every step. USA Freight Forwarding Services is that partner, able to ensure that your needs are always a top priority.
Our dedicated, knowledgeable, and friendly staff are here to serve you whenever and wherever your business needs take you. We offer freight forwarding services that cover any of your shipping needs.
No matter what type of freight you’re shipping, we can offer the following services:
Get started today by speaking to one of our consultants at (866) 941-8081 or by contacting us online. We’ll get you on the correct track to shipping goods from anywhere in the world. Get it done right the first time with USA Freight Forwarding.
