Freight forwarder
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A freight forwarder, or forwarding agent, is a person or company who, for a fee organizes shipments for individuals or
corporations A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporations
to get goods from the
manufacturer Manufacturing is the creation or Production (economics), production of goods with the help of equipment, Work (human activity), labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary secto ...

manufacturer
or producer to a market, customer or final point of distribution."Freight forwarder."
''Random House Unabridged Dictionary'' (1997). Random House, Inc., on Info, please. Retrieved 21 December 2012.
Forwarders contract with a
carrier Carrier may refer to: Entertainment * Carrier (album), ''Carrier'' (album), a 2013 album by The Dodos * Carrier (board game), ''Carrier'' (board game), a South Pacific World War II board game * Carrier (TV series), ''Carrier'' (TV series), a ten- ...
or often multiple carriers to move the goods from one country to another. A forwarder does not move the goods but acts as an expert in the
logistics Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...

logistics
network. The carriers can use a variety of shipping modes, including
ships A ship is a large watercraft that travels the world's oceans and other sufficiently deep Sea lane, waterways, carrying cargo or passengers, or in support of specialized missions, such as defense, research, and fishing. Ships are generally dist ...
,
airplane An airplane or aeroplane (informally plane) is a fixed-wing aircraft that is propelled forward by thrust from a jet engine, Propeller (aircraft), propeller, or rocket engine. Airplanes come in a variety of sizes, shapes, and wing configurat ...
s,
truck A truck or lorry is a motor vehicle designed to transport cargo, carry specialized payloads, or perform other utilitarian work. Trucks vary greatly in size, power, and configuration, but the vast majority feature body-on-frame construction ...
s, and
railroad Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in Track (rail transport), tracks. In contrast to road transport, where the ...
s, and often use multiple modes for a single shipment. 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. International freight forwarders typically handle international shipments and have additional expertise in preparing and processing customs documentation and performing activities pertaining to international shipments. Information typically reviewed by a freight forwarder includes the commercial invoice, shipper's export declaration,
bill of lading A bill of lading () (sometimes abbreviated as B/L or BOL) is a document issued by a common carrier, carrier (or their Law of agency, agent) to acknowledge receipt of good (economics), cargo for shipment. Although the term historically related on ...
and other documents required by the carrier or country of
export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...
,
import An import is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited ...
, and/or
transshipment Transshipment, trans-shipment or transhipment is the shipment of Cargo, goods or Intermodal container, containers to an intermediate destination, then to another destination. One possible reason for transshipment is to change the means of trans ...
. The FIATA shorthand description of the freight forwarder as the "Architect of Transport" illustrates the commercial position of the forwarder relative to its client. In Europe, some forwarders specialize in "niche" areas such as rail-freight, and collection and deliveries around a large port. Modern freight forwarders offer an end-to-end process i.e. shipping the goods from the place of origin to the final destination. Together with Freight Tracking Technology, freight forwarding agents can view real time freight information.


History

One of the earliest freight forwarders was Thomas Meadows and Company Limited of
London, England London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
, established in 1835 . 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 Rail transport (also known as train transport) is a means of transport that transfers passengers and goods on wheeled vehicles running on rails, which are incorporated in tracks. In contrast to road transport, where the vehicles run on a pre ...
and
steamship A steamship, often referred to as a steamer, is a type of steam-powered vessel, typically ocean-faring and seaworthy, that is propelled by one or more steam engines that typically move (turn) propellers or Paddle steamer, paddlewheels. The firs ...
s created demand for the fledgling freight forwarding industry. Trade developed between
Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a Continent#Subcontinents, subcontinent of Eurasia ...
and
North America North America is a continent in the Northern Hemisphere and almost entirely within the Western Hemisphere. It is bordered to the north by the Arctic Ocean, to the east by the Atlantic Ocean, to the southeast by South America and the Car ...
, creating additional demand. The first international freight forwarders were innkeepers in London who held and re-forwarded the personal effects of their hotel guests. 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. In modern times, the forwarder accepts the same responsibilities. It operates either as a domestic carrier or otherwise with a corresponding agent overseas or with his own branch-office. In a single transaction, the forwarder may be acting as a carrier (principal) or as an agent for his customer or both.


Document transfer fee/document handover fee

International freight forwarders, Non-Vessel-Operating Common Carriers (NVOCCs), and customs brokers often charge for transferring documents to another transportation company at the destination. This fee is a part of the ocean freight charges, being paid by the importer at the port of discharge in the International Commercial Term (incoterm) FOB (free on board), and by the exporter at the origin in the incoterms CFR (cost and freight), CIF (cost, insurance and freight) and DDP (Transportation cost from factory to delivery port, custom clearance at delivery port, freight, custom clearance at discharge port, transportation from discharge port to importer factory). This fee is separate from documentation fees charged by 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 the release of cargo.


National variations


Australia

In
Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...
most licensed Customs Clearance Agents (commonly referred to as Customs Brokers) operate under a freight forwarder.


United Arab Emirates

UAE The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia Western Asia, West Asia, or Southwes ...
freight forwarders are well-versed in the complexities of shipping to and from the Emirates, and can provide a valuable resource for businesses looking to move goods in and out of the country. They can help to navigate the often-complex customs regulations in the UAE, and can also offer advice on the best shipping routes and carriers to use.


Bangladesh

Freight forwarders must have a government license in
Bangladesh Bangladesh (}, ), officially the People's Republic of Bangladesh, is a country in South Asia. It is the List of countries and dependencies by population, eighth-most populous country in the world, with a population exceeding 165 million pe ...
.


Canada

Transport Canada Transport Canada (french: Transports Canada) is the Ministry (government department), department within the Government of Canada responsible for developing regulations, Policy, policies and Public services, services of road, rail, marine and air ...
is the federal department responsible for implementing and enforcing transportation policies and programs. The
Canada Border Services Agency The Canada Border Services Agency (CBSA; french: Agence des services frontaliers du Canada, ''ASFC'') is a federal law enforcement agency that is responsible for border control (i.e. protection and surveillance), immigration enforcement, and Cust ...
is responsible for enforcing most regulations that affect international freight forwarders. International security measures are the dominant concern. The Canadian International Freight Forwarders Association (CIFFA) 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 plays an educational role by providing certificate and advanced certificate programs.


India

Federation of Freight Forwarders’ Associations in India (FFFAI) is the Apex Body and the Sole Representative of 28 Member Associations from all over
India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area, the List of countries and dependencies by population, second-most populous ...
representing 6,500 Custom House Agents (employing over 1.1
lakh A lakh (; abbreviated L; sometimes written lac) is a unit in the Indian numbering system equal to 100,000, one hundred thousand (100,000; scientific notation: 105). In the Indian numbering system, Indian 2,2,3 convention of Indian numbering ...
people).


Ireland

International merchandise trade is worth €148 billion to the
Irish Irish may refer to: Common meanings * Someone or something of, from, or related to: ** Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe ...
economy.Irish International Freight Association
/ref> 82% of manufactured products are exported, further highlighting the importance of freight forwarders to the national economy. Associations including the Irish International Freight Association and FIATA help maintain the professionalism of this industry through educational and representative roles. FIATA offers a Diploma in Freight Forwarding.


Kenya and Tanzania

In
Kenya ) , national_anthem = "Ee Mungu Nguvu Yetu"() , image_map = , map_caption = , image_map2 = , capital = Nairobi , coordinates = , largest_city = Nairobi , ...
and
Tanzania Tanzania (; ), officially the United Republic of Tanzania ( sw, Jamhuri ya Muungano wa Tanzania), is a country in East Africa within the African Great Lakes region. It borders Uganda to the north; Kenya to the northeast; Comoro Islands an ...
freight forwarders are commonly referred to as clearing and forwarding agents. A license is required, which can be acquired from Kenya Revenue Authority and Tanzania Revenue Authority respectively. Freight forwarders in Kenya and Tanzania are responsible for clearing consignments through Kenya and Tanzania customs, arranging transportation and forwarding the consignment to the consignee. Both exports and imports must clear customs in Kenya/ Tanzania.


Nigeria

Freight-forwarding in
Nigeria Nigeria ( ), , ig, Naìjíríyà, yo, Nàìjíríà, pcm, Naijá , ff, Naajeeriya, kcg, Naijeriya officially the Federal Republic of Nigeria, is a country in West Africa. It is situated between the Sahel to the north and the Gulf of G ...
has been in place since the exporting of
groundnut Groundnut may refer to: * Seeds that ripen underground, of the following plants, all in the Faboideae The Faboideae are a subfamily In biological classification, a subfamily (Latin: ', plural ') is an auxiliary (intermediate) taxonomic ra ...
as a cash crop beginning in 1914, though not initially as freight forwarding but as the means of transportation of goods and services from one country to another. Following the method of their British forebears, agents were used to facilitating the transport of goods and services.


Pakistan

Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
International Freight Forwarders Association PIFFA has more than 500 freight forwarding companies as members. The association is the local representative of FIATA and member association for Pakistan.


United Kingdom

In the U.K., freight forwarders are not licensed, but many are members o
BIFA (The British International Freight Association)
BIFA is the trade association for UK-registered companies engaged in the international movement of freight by all modes of transport, air, road, rail, and sea. BIFA has around 1500 corporate members, known generally as freight forwarders, who offer a wide range of services within these various modes.


United States

Companies handling domestic US freight by road must be registered with the U.S. Department of Transportation's
Federal Motor Carrier Safety Administration The Federal Motor Carrier Safety Administration (FMCSA) is an agency in the United States Department of Transportation that regulates the trucking industry in the United States The trucking industry serves the American economy by transporting l ...
. Such forwarders are "carriers" who accept freight for transport and are liable for delivering the freight under their own bill of lading. International ocean freight forwarders arranging for shipments to and from the US must be licensed by the
Federal Maritime Commission The United States Federal Maritime Commission (FMC) is an independent federal agency based in Washington, D.C. that is responsible for the regulation of oceanborne international transportation of the U.S. It is chaired by Daniel B. Maffei. Hi ...
as ''Ocean Transportation Intermediaries''. 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 prepare and process documentation and perform related activities pertaining to shipments." An ''NVOCC'' is "a common carrier that holds itself out to the public to provide ocean transportation, issues its own bills of lading or equivalent documents, but does not operate the vessels that transport cargo"; or, "a shipper in its relationship with the vessel-operating common carrier involved in the movement of cargo."


See also

*
Logistics Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics manages the flow of goods between the point of origin and the point of consumption to meet the requirements of ...
* Physical inventory * Standard trading conditions *
Supply chain In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, activ ...


References

{{DEFAULTSORT:Freight Forwarder Freight transport