A freight forwarder or forwarding agent is a person or a company who co-ordinates and organizes the movement of shipments on behalf of a shipper (party that arranges an item for shipment) by liaising with carriers (party that transports goods). The carriers may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks. FIATA describes a freight forwarder as the "Architect of transport".

International freight forwarders typically handle cross-border logistics and have additional expertise in preparing and processing customs documentation and performing activities pertaining to the regulations of different countries. Freight forwarders typically have information with respect to commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment.

Modern freight forwarders offer an end-to-end process i.e. shipping the goods from the place of origin to the final destination and may offer additional services such as warehouse planning, cargo insurance and customs brokerage. Together with tracking, freight forwarding agents often have real time information on the freight. Some forwarders may specialize in niche areas such as rail-freight, and collection and deliveries around a port.

History

The first international freight forwarders were innkeepers in London, England who held and re-forwarded the personal effects of their hotel guests in the early 1800s.[1] One of the earliest freight forwarders was Thomas Meadows and Co. Ltd., established in 1836.[2] With the increase in trade between Europe and United States, Medows served as an intermediary to arrange for the transportation of freight from the manufacturers to customers through rail transport and steamships. The services were later expanded to cover consultative solutions and handling customs requirements.[2]

Definition and functions

A freight forwarder is an entity who co-ordinates and organizes the movement of shipments on behalf of a shipper (party that arranges an item for shipment) by liaising with carriers.[3] A carrier is an entity that actually transports goods and may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, including multiple modes for a single shipment.[4] For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by truck, flown to the destination city and then moved from the airport to a customer's building by another truck.

A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks.[5] International Federation of Freight Forwarders Associations (FIATA) describes a freight forwarder as the "Architect of transport".[6]

The original function of the forwarder was to arrange for carriage by contracting with various carriers. Forwarder responsibilities included advice on documentation and customs requirements in the country of destination. His correspondent agent overseas looked after his customers' goods and kept him informed about matters that would affect the movement of goods. Modern freight forwarders offer an end-to-end process i.e. shipping the goods from the place of origin to the final destination and may offer additional services such as warehouse planning, cargo insurance and customs brokerage.[7] In a single transaction, the forwarder may be acting as a carrier (principal) or as an agent for his customer or both. Together with tracking, freight forwarding agents often have real time information on the freight.[8] Some forwarders may specialize in niche areas such as rail-freight, and collection and deliveries around a port.

International freight forwarders typically handle cross-border logistics and have additional expertise in preparing and processing customs documentation and performing activities pertaining to the regulations of different countries. Freight forwarders typically have information with respect to commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment.[9] Freight forwarders often charge a fee for the activity and might include transportation costs from factory and to delivery, freight charges, customs and other fees and documentation charges.[10]

National variations

See also

References

  1. ^ Jackson, Sarita (2021). International Trade in Services Effective Practice and Policy. Taylor & Francis. p. 12. ISBN 978-1-0003-6969-4.
  2. ^ a b How Logistics Facilitate an Efficient Freight Transportation System. U.S. Government Printing Office. 2013. p. 5.
  3. ^ "Meaning and Definition of "freight forwarder"". Random House. Archived from the original on 10 February 2021. Retrieved 8 January 2023.
  4. ^ "Freight Forwarder Definition & Legal Meaning". Black's Law Dictionary (2nd ed.). Retrieved 24 January 2023.
  5. ^ Huang, Sheng Teng; Bulut, Emrah; Duru, Okan (December 2019). "Service quality evaluation of international freight forwarders: an empirical research in East Asia". Journal of Shipping and Trade. 4 (1): 14. doi:10.1186/s41072-019-0053-6. ISSN 2364-4575.
  6. ^ International Federation of Freight Forwarders Associations (FIATA) (PDF) (Report). United Nations Economic Commission for Europe. Retrieved 1 December 2023.
  7. ^ Michelmann, Marc (1985). Load, Seal, & Ship. Load, Seal, & Ship. p. 14.
  8. ^ "Strategic Considerations for Compliance to Incoterms". SIPMM Publications. Retrieved 5 March 2023.
  9. ^ "What is freight forwarding?". CAF. Retrieved 1 December 2023.
  10. ^ Basic overview of Incoterms (PDF) (Report). DHL. 2020. Retrieved 28 April 2020.
  11. ^ "About licensing". Government of Australia. Retrieved 1 December 2023.
  12. ^ "About our association". CIFFA. Retrieved 1 December 2023.
  13. ^ "Federation of Freight Forwarders' Associations in India (FFFAI)". FFFAI. Retrieved 1 December 2023.
  14. ^ "Irish International Freight Association". IIFA. Retrieved 1 December 2023.
  15. ^ "Clearing fowarding agents". Government of Tanzania. Retrieved 1 December 2023.
  16. ^ Hogendorn, Jan (1978). Nigerian Groundnut Exports: Origins and Early Development. Ahmadu Bello University Press. ISBN 978-9-7812-5005-7.
  17. ^ "About PIFFA". PIFFA. Retrieved 1 December 2023.
  18. ^ "Overview of BIFA". British International Freight Association. Retrieved 29 December 2023.
  19. ^ "Office of Transportation Intermediaries". Federal Maritime Commission. U.S. Government. Archived from the original on 2015-03-28. Retrieved 20 April 2016.
  20. ^ 49 U.S.C. § 13102
  21. ^ "Ocean Transportation Intermediaries". Federal Maritime Commission. United states Government. Retrieved 20 April 2016.