What is a Freight Forwarder?

Freight forwarder is a legal entity that accepts the commission of the consignee or shipper of import and export goods, and handles international cargo transportation and related business for the consignee in the name of the consignee or in its own name, and receives remuneration for the service.

Freight Forwarder Freight Services

From the basic nature of international freight forwarders, freight forwarders are mainly entrusted by the entrusting party to engage in matters related to cargo transportation, transshipment, warehousing, loading and unloading. On the one hand, it concludes a contract of carriage with the shipper of the goods, and on the other hand, it concludes a contract with the transport department. Therefore, to the cargo shipper, it is again the carrier of the cargo. At present, a considerable number of freight forwarders master various means of transportation and warehouses for storing goods, and handle the transportation of goods including sea, land and air when operating their business.

International freight forwarding companies engage in business activities as agents or independent operators, and their services inlude:

1. Cargo canvassing, booking, consignment, warehousing, packaging;

2. Supervision of loading, unloading, container loading and unloading, distribution, transit and related short-distance transportation services of goods;

3. Customs declaration, inspection declaration, insurance;

4. Prepare and issue relevant documents, deliver freight, settle and deliver miscellaneous fees;

5. International exhibits, personal effects and transit freight forwarding agents;

6. International multimodal transport and consolidation (including LCL);

7. International express (excluding personal letters);.

8. Consulting and other international freight forwarding business.

According to its business scope, international freight forwarders are divided into sea freight forwarder, air freight forwarder, truck agent, rail freight forwarding, intermodal freight forwarding, shipping agent, non-scheduled freight forwarder, liquid bulk freight forwarder, etc. And the business process is divided into booking and freight forwarding agency, cargo customs declaration agency, airline agency, cargo import agency, cargo export agency, container freight agency, container unpacking and packing agency, cargo handling agency, transit agency, tally agency, storage and transportation Agents, inspection agents and inspection agents, etc.

For Whom The Freight Forwarder Serves

(1) Serving the shipper

The freight forwarder undertakes any procedure in the transportation of different goods on behalf of the shipper:

1. In the fastest and most economical way of transportation, arrange the appropriate packaging of the goods and choose the appropriate transportation route.

2. Advise customers on warehousing and distribution.

3. Choose a reliable and efficient carrier and be responsible for concluding the contract of carriage.

4. Arrange the weighing and measurement of goods.

5. Carry out cargo insurance.

6. Handle the assembly of goods.

7. Warehousing goods prior to shipment or distribution at destination.

8. Arrange the transportation of the goods to the port, go through customs and related documents, and deliver the goods to the carrier.

9. Pay freight, duties and taxes on behalf of the shipper.

10. Handle any foreign exchange transactions related to the transportation of goods.

11. Obtain the bill of lading from the carrier and deliver it to the shipper.

12. Liaise with foreign agents, supervise the progress of the shipment and let the shipper know where the shipment is going.

(2) Serving the customs

When a freight forwarder acts as a customs agent to handle customs formalities for imported and exported goods, it not only represents its customers, but also represents the customs authorities, and is responsible for declaring the exact amount, quantity, and name of the goods so that the government is not lost in these respects.

(3) Serve the carrier

The freight forwarder makes a timely booking with the carrier, negotiates fair and reasonable fees for both the consignor and the carrier, arranges delivery at an appropriate time, and resolves issues such as freight accounts with the carrier in the name of the consignor.

(4) Serving airlines

A freight forwarder acts as an agent for an airline in the air transport industry. In this relationship, it uses the airline's cargo means to serve the cargo owner, and the airline pays a commission. At the same time, as a freight forwarder, it continues to serve the consignor or consignee by providing services suitable for air freight.

(5) Serving liner companies

The relationship between freight forwarders and liner companies varies from business to business. In recent years, the LCL service provided by freight forwarders, that is, the consolidation service of LCL cargo, has established a relatively close relationship between them and liner companies and other carriers.

(6) Provide LCL service

With the growth of container transportation in international trade, the service of consolidation and consolidation has been introduced. In providing this service, the freight forwarder plays the role of the client. The basic meaning of consolidation and LCL is to collect small pieces of goods from several consignors from one place of shipment to several consignees from another destination, and use them as a freight forwarder for a whole piece of goods to be sent to the destination. And through it the single-ticket goods are delivered to various consignees. The freight forwarder issues a bill of lading, that is, a separate bill of lading or other similar receipts are handed over to the consignor of each shipment; the agent at the port of destination of the freight forwarder delivers the original bill of lading to the consignee. The consignee and consignor of LCL do not directly contact the carrier. For the carrier, the forwarder is the consignor, and the forwarder's agent at the port of destination is the consignee. Therefore, the carrier issues a full bill of lading or a waybill to the forwarder. If the consignor or consignee has special requirements, the freight forwarder can also engage in pickup and delivery services at the origin and destination, providing door-to-door services.

(7) Provide multimodal transport services

In the role of freight forwarding, a more far-reaching impact of containerization is that it intervenes in multimodal transport, acts as the main carrier, and undertakes to organize a single contract for door-to-door cargo transportation through multiple modes of transportation. It can negotiate and contract separately with other carriers or other service providers as a party. However, these distribution contracts do not affect the execution of the multimodal transport contract, that is, the consignor's obligations and liability for damage and loss during the multimodal transport process.

Classification of Freight Forwarder Companies

International freight forwarder companies can be classified from different angles. In order to better understand their industry characteristics and business content, they can be divided into the following types based on the establishment background and operating characteristics of the company.

1) International freight forwarder enterprises with the background of foreign trade transportation enterprises

Such international freight forwarder companies mainly refer to China Foreign Trade Transportation (Group) Corporation and its branches, subsidiaries, holding companies and joint ventures. Focusing on sea, land and air international freight forwarding business, it integrates sea transportation, air transportation, air express, railway transportation, international multimodal transportation, automobile transportation, warehousing, ship operation and management, ship leasing, shipping agency, comprehensive logistics as one. Its characteristics are: one industry is the main business, multiple operations; wide business scope, developed business network, strong strength, abundant human resources, and strong comprehensive market competitiveness.

2) International freight forwarding companies with actual carrier companies as the background

Such international freight forwarding enterprises mainly refer to international freight forwarding enterprises invested or controlled by road, railway, sea, air transportation departments or enterprises. Its characteristics are: professional operation, close relationship with the actual carrier, obvious advantages in freight rates, well-informed transportation information, convenient for cargo owners, and strong market competitiveness under specific transportation methods.

3) International freight agent companies with the background of foreign trade and industry and trade companies

Such international freight agent enterprises mainly refer to international freight forwarding enterprises invested or controlled by various professional foreign trade companies or large industrial and trade companies. Its characteristics are: relatively stable supply of goods, rich experience in handling goods and documents, and strong competitive advantages as transport agents for certain types of goods, but most of them are small in scale, their service functions are not comprehensive enough, and their service network is not developed enough.

4) International freight forwarder companies with warehousing and packaging companies as the background

Such international freight forwarder companies mainly refer to international freight forwarding companies invested or controlled by warehousing and packaging companies or international freight forwarding companies with increased business scope. Its characteristics are: relying on the advantages of warehousing to pick up the source of goods, it has won the trust of the owner, and has rich experience in the transportation of special items, but most of them are small in scale, with fewer service outlets and weak comprehensive service capabilities.

5) International freight forwarding enterprises with the background of port, waterway and airport enterprises

Such international freight forwarding companies mainly refer to international freight forwarding companies invested and controlled by ports, waterways and airports. The characteristics of this type of international freight forwarding enterprises are: close relationship with port and airport enterprises, rich experience in port and station operation, competitive advantage in container freight forwarding, high personnel quality and management level, but the service content is relatively simple and lacks. Service Network.

6) International freight agent companies with the background of overseas international transportation and transportation agency companies

Such international freight agent companies mainly refer to foreign-invested international freight forwarding companies established in China by overseas international transportation and transportation agency companies in the form of joint ventures and cooperation. Its characteristics are: the international business network is relatively developed, the degree of informatization, personnel quality, management level is high, and service quality is good.

7) International freight forwarder companies with other backgrounds

Such international freight forwarder companies mainly refer to international freight forwarding companies invested or controlled by other investors. It has various investment entities, different business scales and business scopes, and uneven personnel quality, management level and service quality. Some have strong strength, a wide range of business, a relatively developed service network, a high level of informatization, personnel quality, management level, and better service quality. Some are small in scale, single in service content, low in personnel quality and management level, and average in service quality.

From STU Supply Chain: https://stusupplychain.com/what-is-a-freight-forwarder.html