Freight forwarder

A freight forwarder is a company that organises the movement of goods for shippers — booking space with carriers, consolidating cargo, preparing documents and often handling customs — without necessarily owning the ships, planes or trucks. Some act only as agents; others, by issuing their own transport documents, take on a carrier's responsibility for the shipment.

What a forwarder does

FIATA, the international federation of forwarders, defines freight forwarding as services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of goods, plus ancillary and advisory services — including customs and fiscal matters. In practice a forwarder sells the whole door-to-door move and buys each leg from carriers.

Agent or carrier

Under the FIATA Model Rules, a forwarder that issues its own transport document, or otherwise undertakes to act as a carrier, is liable as a principal — as the carrier. One acting only as an agent arranges the carriers rather than performing the carriage itself. US law draws a similar line for surface forwarders, which assemble and consolidate shipments and assume responsibility for the transportation from receipt to destination.

US ocean forwarders

• An ocean freight forwarder dispatches shipments from the US via a common carrier, booking space on behalf of shippers.
• It needs a licence from the Federal Maritime Commission and financial security of USD 50,000.
• One that issues its own house bills of lading as a carrier is an NVOCC, with its own licence and bond.

Worked example: a door-to-door quote

Suppose a forwarder quotes one 40 ft container door to door: pickup USD 350, export clearance USD 120, ocean freight USD 1,800, destination port charges USD 400, import clearance USD 150, delivery USD 450.

The mistake people make

Not knowing which role the forwarder took. Whether it issued its own transport document decides whether a cargo claim goes to the forwarder as carrier or past it to the carriers it booked.