A freight forwarder or forwarding agent plays a critical role in commerce and international carriage of goods. Conventionally, the freight forwarding agent acted as a link between the carrier and the owner of the goods and offered forwarding and clearing services. Today, freight forwarders have adopted new roles besides assisting the owner of the goods and the carrier. They nowadays transport the carriage by their means or by contracting other transport providers. Even with this role, freight forwarders do not take ownership of the carriage but rather use the declarations made by the owner of the goods of what the goods are, their weights, dimensions, and purpose of the carriage.
Contact HIS Spedition to see how we can add value to your supply chain and logisitcs requirements
The roles of freight forwarders vary depending on the type and size of the employer (owner of the goods). Here are the core roles of a freight forwarder.
1) Offering advice to the shipper
The forwarding agent advises and helps clients in transporting goods more efficiently from the buyer to the seller. They inform the client in advance about the possible challenges of freight transportation. They negotiate with transport agents to reduce the cost of shipping the carriage.
The freight forwarder’s knowledge of shipping regulations, banking practices, and transportation costs can ease the shipment process.
2) Booking freight space on the modes of transportation
Among the fundamental roles of a freight forwarder is to book cargo space on airplanes, trains, ships or other means of transportation. Many freight forwarders have particular expertise and extensive networks to enable their clients import of export from individual countries. Most common forwarding agents provide shipping options like containerization, road haulage, and air freight.
3) Packaging, warehousing, and distribution
Before shipment or after the arrival of the goods, the freight forwarder can organize for packaging, warehousing, and distribution. The forwarder can store the goods before export or import while awaiting transportation or distribution. Sometimes a contract of transportation can include storage services before and after delivery of the cargo while waiting for customs clearance.
4) Providing insurance services
Unlike cargo underwriters, forwarders arrange cargo insurance for a service fee as agents for their clientele. Some of the best freight forwarders suggest to their clients to purchase insurance cover for their cargo on a gratis basis. However, in some countries like EU member states, it is illegal to sell insurance. According to the EU Insurance Mediation Directive (IMD), all sellers of insurance are required to register with the Financial Services Authority (FSA), banning UK forward agents from selling cargo insurance.
5) Perform documentation and custom clearance
The role of the forwarding agent is to export documentation and shipping requirements. The freight forwarder prepares and submits documentation for the export and import of goods, complying with the legal and customs requirements and the sales agreement.
The forwarder represents the customer during payment of duty, customs assessment and taking the freight and the documents from customs after clearance.
Freight forwarding companies play a crucial role in the global freight shipping industry. With the increasing complexities of the intermodal transport system, the role of forwarders is becoming even more important in the export and import business.