The Role of a Freight Forwarder Explained

One of the most common questions we get asked is: What does a freight forwarder do?  The answer is not always the simplest to explain. The reason being that as freight forwarders we do many things. 

The simplest Freight Forwarders specialize in making things go from point A to point B.  That may not seem like the most technical explanation.  But the legal definition can be confusing to someone unfamiliar with international shipping.  The literal textbook definition can be found in US code  49 U.S.C. § 13102 and is taxing to read.  That’s why we’re here today to break it down so you can see the many ways a Freight Forwarder can help you with all your transportation needs.

A simplified definition of Freight Forwarding 

As mentioned above freight forwarder’s primary function is to do everything necessary to get goods from its origin to its intended destination.  It is often assumed that forwarders only handle the major movement of the cargo such as the ocean or air freight. 

But forwarders will also arrange for legal, government, and regulatory requirements for shipping cargo. They can also assist in the preparation and loading of cargo. Freight forwarders will also be experts in knowing how to protect cargo value with insurance products.  All this said we will break down some functions your forwarder may offer you may be unaware of.  

Rolls of your Freight Forwarder

Moving Your Cargo

This one is obvious.  But what is more important is a freight forwarder will move your cargo efficiently.  The best transit time, routing, and carrier will all be considered in accordance with your budget and timeline.  Not all modes of transit are created equal. Logistics is certainly not a one size fits all solution. Your cargo and your team goals will dictate different carrier requirements. 

Freight forwarders have a network of carriers they know and trust. They will be familiar with which carriers best suit your needs. Navigating through many carriers is taxing especially if you are unfamiliar with the market.  Also, many major carriers may require a shipping contract or other registration requirements prior to being able to book with their service. Using freight forward cuts through a lot of these steps saving you time and money.

The takeaway

 Forwarders have a network of carriers and are familiar with the best ones for your needs.  They will already have existing contracts or relationships with them saving you time of having to commit to a shipping contract or long registration processes.  

Documentation Submission

Shipping requires a lot of documentation.  From booking requests, dock receipts, bill of lading instructions, etc.  All of this documentation must be filed accurately.  Mistakes can cause delays and fines. Forwarders are very well trained in how to submit this documentation accurately and timely.  They can also help you create required documents for shipping if you are unfamiliar such as packing lists and commercial invoices. Shipping lines now require the proper declaration of HS and HTS codes.  A good freight forwarder will be able to guide you to find the right codes so your documentation is submitted correctly.  

The takeaway 

A freight forwarder can handle the documentation requirements of your companies logistics needs.  Improper documentation can cause custom issues on departure or arrival. Relying on your freight forwarder for documentation needs can be vital to your logistical efficiency.

Customs Clearance and Regulatory Preparation

Before cargo can move anywhere it must adhere to all local, federal, and international laws and regulations.  A good freight forwarder will be able to assist in accessing all necessary requirements and help the shipper gather the proper information.  Custom clearance is required for any shipment inbound and outbound to/from any country. A forwarder will be able to help get your goods properly classified so you pay the proper duties and taxes on your goods. 

They can also help fulfill any regulatory requirements from agencies such as the FDA, USDA, or other government entities. If your cargo is hazardous they can assist with hazardous paperwork as well as be familiar with how certain hazmat goods need to be prepared and shipped.  These important steps to ensure your cargo does not get rejected at the port or face delays. 

There are many things that may need to be done prior to your cargo being able to be transported.  A good freight forwarder will help assess your cargo’s requirements and the steps necessary to get them done.

Cargo Preparation and Storage

Certain cargo may require special preparation prior to it being able to be loaded onto its intended vessel.  Cars may need to be dismantled and braced within a container. Fuel may need to be drained and accessories removed from machinery.  Special fumigation may be needed for wood products. All of these requirements must happen prior to special cargo moving anywhere. When cargo arrives at the destination a forwarder can arrange for warehousing or other special storage requirements to keep cargo safe and secure.  They can also arrange for cargo to reside in a Free Trade Zone (FTZ) to manage proper duty assessment.

Freight forwarders can also make proper arrangements for when your cargo isn’t moving at all!  Ask your forwarder for how they can assist should your cargo have special storage requirements.

Value Protection

Insuring your goods properly is an important part of shipping.  Most carriers will not offer any type of protection so insurance products are the only way to protect the value of your cargo.  A good freight forwarder will help advise the best insurance product for your goods. They will also be able to help walk you through a claim process should your cargo get damaged in transit.  Again, these products and services are unrelated to the actual movement of your cargo. However, a freight forwarder can be of great assistance with cargo insurance and claims.  

Freight forwarders will be able to properly find the best insurance products for your cargo.  They can also help you with your claims should you need to file one.

What should you look for in your Freight Forwarder?

A good forwarder will not just provide the best price.  In addition to being competitive in pricing, a good forwarder will seek to explain the terms of your shipment, the method of transport available, and the pros and cons of each solution.  We recommend not just focusing on price because although it is important to get competitive rates, rates themselves do not tell the whole picture. For instance, a general forwarder provider may have set rates they give generally to a multitude of customers.  But those rates may not have the best transit times, insurance coverage, or safest packing methods.

There may be options that are faster, more efficient, and better insured for a slightly higher price, but protects your goods and your customer’s interest much better.  Ultimately it is up to your team to decide the best option, but in order to do so, you need a forwarder that will take the time to present to you all of the options and explain them thoroughly.

At Maximum Freight, we want to ensure that our customers fully understand the scope and details of their shipment so they feel confident in their logistic decisions.

It is clear that a freight forwarder plays many roles in the transportation of cargo.  Many of which are not related to the actual movement of cargo. Be sure you choose a reliable forwarder to ensure proper transportation of your cargo.  At Maximum Freight we love to take the time to truly understand each and every one of our clients. We aim to develop long term relationships and to grow with each of our customers.  Please contact us today for all your shipping needs. We look forward to hearing from you!