Freight forwarder

Freight forwarding is a service used by companies that deal in international

or multi-national import and export. While the freight forwarder doesn't actually move the freight itself, it acts as an intermediary between the client and various transportation services. Sending products from one international destination to another can involve a multitude of carriers, requirements and legalities. A freight forwarding service handles the considerable logistics of this task for the client, relieving what would otherwise be a formidable burden. Freight forwarding services guarantee that products will get to the proper destination by an agreed upon date, and in good condition. The freight forwarding service utilizes established relationships with carriers of all kinds, from air freighters and trucking companies, to rail freighters and ocean liners. Freight forwarding services negotiate the best possible price to move the product along the most economical route by working out various bids and choosing the one that best balances speed, cost and reliability. A freight forwarding service generally provides one or more estimates to the client along with advisement, when necessary. Considerations that effect price will range from origin and destination to special requirements, such as refrigeration or, for example, transport of potentially hazardous materials. Assuming the client accepts the forwarder's bid, the freight is readied for shipping. The freight forwarding service then undertakes the responsibility of arranging the transport from point of origin to destination. One of the many advantages of using freight forwarding is that it handles ancillary services that are a part of the international shipping business. Insurance and customs documentation and clearance are some examples. As a consolidator, a freight forwarding service might also provide Non-Vessel Operating Common Carrier (NVOCC) documentation, or bills of lading. Warehousing, risk assessment and management, and methods of international payment are also commonly provided to the client by the freight forwarding service. A good freight forwarding service can save the client untold time and potential headaches while providing reliable transportation of products at competitive rates. A freight forwarding service is an asset to almost any company dealing in international transportation of goods, and is especially helpful when in-house resources are not versed in international shipping procedures.

A freight forwarder, forwarder, or forwarding agent is a person or company that organizes shipments for individuals or corporations to get large orders from the manufacturer or producer to market or final point of distribution. Forwarders will contract with a carrier to facilitate the movement of goods. A forwarder is not typically a carrier, but is an expert in supply chain management. In other words, a freight forwarder is a "travel agent," for the cargo industry, or a third-party (non-asset-based) logistics provider. A forwarder will contract with asset-based carriers to move cargo ranging from raw agricultural products to manufactured goods. Freight can be booked on a variety of carrier types, including ships, airplanes, trucks, and railroads. It's not unusual for a shipment to move along its route on multiple carrier types. International freight forwarders typically arrange cargo movement to an international destination. International freight forwarders, 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 specialize in 'niche' areas such as rail-freight 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.

History of freight forwarding

One of the earliest freight forwarders of record is the now defunct Thomas Meadows and Company Limited of London, England. The firm was established in 1836 and was acquired by Rockwood International Freight Inc. in 1989. Rockwood was acquired by Delmar International of Montreal, Quebec, Canada in 1990. According to "Understanding the Freight Business," written and published by the executive staff of Thomas Meadows and Company in 1972, the advent of reliable rail transport and steamships created the demand for the then fledgling freight forwarding industry. New world trade patterns developed between Europe and North America, creating additional demand. The first international freight forwarders were actually inn keepers in London who held and re-forward the personal effects of their hotel guests. 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' 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 as a domestic US carrier, or otherwise 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.

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. Canada Transport Canada is the federal department responsible for the implementation and enforcement of the transportation policies and programs of the Government of Canada. The Canadian freight forwarding industry falls under the regulatory guidance of Transport Canada. The Canadian Border Services Agency is charged with enforcing the majority of the regulations that international freight forwarders are required to follow. International security measures are the dominant concern of freight forwarders and customs brokers. The Canadian International Freight Forwarders Association was established in 1948 to support and protect the character, status, and interest of foreign freight forwarders by establishing uniform trade practice and regulations. CIFFA also holds an educational role by providing a certificate and advanced certificate programs. 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.[4] 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. 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 domestic U.S. freight must be registred with the U.S. Department of Transportation's Federal Motor Carrier Safety Administration. Such forwarders are "carriers" who accept freight for transportation and are liable for transporting the freight from origin to destination, under their own bill of lading. The legal definition at 49 USC 13102 (8)is: FREIGHT FORWARDER.the term freight forwarder means a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business (A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments; B) assumes responsibility for the transportation from the place of receipt to the place of destination; and (C) uses for any part of the transportation a [surface carrier] carrier subject to jurisdiction [of the Department of Transportation] of under this subtitle. International ocean freight forwarders arranging for shipments to and from the US must be licensed by the Federal Maritime Commission as Ocean Transportation Intermediaries.[5] 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) 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).

Document transfer fee/Document handover fee

International Freight Forwarders and NVOCC's 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) and CIF (Cost, Insurance and Freight). There are many other incoterms; these 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.

What is a Freight Forwarder?

To comply with export documentation and shipping requirements, many exporters use a freight forwarder to act as their shipping agent. The freight forwarder advises and assists clients on how to move goods most efficiently from one destination to another. A Forwarders extensive knowledge of documentation requirements, regulations, transportation costs, and banking practices can ease the exporting process for many companies. Freight forwarders are licensed by the International Air Transportation Association for air cargo and by the Federal Maritime Commission for handling oceanbound cargo.

Why Use a Freight Forwarder?

Whether the exporting firm is large or small, the shipment light or heavy, the freight forwarder will take care of cargo from "dock to door" if requested to do so. This can include the correct filing of export documentation, all arrangements with carriers, packing, crating, and storage needs. The small- and medium-sized company need not deal with many of the details involved with the logistics of exporting their goods. Forwarders typically charge modest rates for their services and have access to shipping discounts. Given the years of experience and constant attention to detail provided by the forwarder, it may be a good investment.

What is a Customs Broker?

A customs broker performs transactions at ports on behalf of other parties. In other words, an importer hires a customs broker to guide the importer's goods into a country. Like the freight forwarder, the

customs broker will recommend efficient means for clearing goods through the maze of customs entry protocol. The broker can estimate the landed costs for shipments entering the country. U.S. exporters typically do not book shipments directly with a foreign customs broker, because freight forwarders often partner with customs brokers overseas who will clear goods that the forwarder ships to the overseas port. Conversely, those same foreign customs brokers contract the services of the domestic freight forwarder when the goods are headed in the opposite direction. The transactions negotiated for the importers will include the entry of goods into a customs territory, payment of taxes and duties, and duty drawback or refunds of any kind. The broker has knowledge of regulations not only from the corresponding customs authority, but also form other regulating agencies involved in imports.