A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating
common carrier, is a person or company that organizes shipments for individuals or corporations
to get goods from the manufacturer or producer to a market, customer or final point of distribution.
Forwarders contract with a carrier to move the goods. A forwarder does not move the goods
but acts as an expert in supply chain management. A forwarder contracts with carriers to move
cargo ranging from raw agricultural products to manufactured goods. Freight can be booked
on a variety of shipping providers, including ships, airplanes, trucks, and railroads. It
is not unusual for a single shipment to move on multiple carrier types. International freight
forwarders typically handle international shipments. International freight forwarders
have additional expertise in preparing and processing customs and other 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 and other documents required by the carrier
or country of export, import, and/or transshipment. Much of this information is now processed
in a paperless environment. The FIATA shorthand description of the freight
forwarder as the 'Architect of Transport' illustrates the commercial position of the
forwarder relative to his client. In Europe, some forwarders specialize in 'niche' areas
such as rail-freight, and collection and deliveries around a large port.
Lloyd's Loading List is the freight forwarding industry's journal of record, first published
160 years ago as a UK export directory. Today it provides details of forwarders, NVOCCs
and shipping lines/agents who serve over 10,000 ports globally.
Some forwarders handle domestic shipments only.
History One of the earliest freight forwarders was
Thomas Meadows and Company Limited of London, England, established in 1836. 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 and steamships created
demand for the fledgling freight forwarding industry. Trade developed between Europe and
North America, 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 movement of
goods. In modern times the forwarder accepts the
same responsibilities. It operates either as a domestic US 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 or as an agent for his
Document transfer fee/Document handover fee International Freight Forwarders, NVOCCs and
customs brokers often charge for transferring documents to another transportation company
at 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 FOB, and by the exporter at
the origin in the incoterms CFR and CIF. 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 release of cargo. Some companies call
this an administration fee, document fee, document transfer fee, but it exists in some
form in most destinations and is well known to most shippers Steamship carriers do not
have this fee. National variations
Australia In Australia most licensed Customs Clearance
Agents operate under a freight forwarder. Bangladesh
Freight forwarders must have a government license.
Canada Transport Canada is the federal department
responsible for implementing and enforcing transportation policies and programs. The
Canadian Border Services Agency is responsible for enforcing most regulations that affect
international freight forwarders. International security measures are the dominant concern.
The Canadian International Freight Forwarders Association 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. Ireland
International merchandise trade is worth €148 billion to the Irish economy. 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
In Kenya freight forwarders are commonly referred to clearing and forwarding agents. A license
is required, which can be acquired from Kenya Revenue Authority. Freight forwarders in Kenya
are responsible for clearing consignments through Kenya customs, arranging transportation
and forwarding the consignment to the consignee. Both exports and imports must clear customs
in Kenya. Nigeria
Freight-forwarding in Nigeria has been in place since the exporting of groundnut 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
methodology of their British forebears, agents were used to facilitate the transport of goods
and services. Pakistan
Pakistan International Freight Forwarders Association has more than 1000 freight forwarding
companies as members. UK
In the U.K., freight forwarders are not licensed, but many are members of the British International
Freight Association. They consolidate goods from different consignors into full loads
for road transport to Europe, known as groupage. Some offer services such as export packing.
USA Companies that handle domestic U.S. freight
must be registered with the U.S. Department of Transportation's Federal Motor Carrier
Safety Administration. Such forwarders are "carriers" who accept freight for transport
and are liable for delivering the freight under their own bill of lading.
The legal definition at 49 U.S.C. § 13102 is: "Freight Forwarder—the term 'freight
forwarder' means a person holding itself out to the general public to provide transportation
of property for compensation and in the ordinary course of its business — assembles and consolidates,
or provides for assembling and consolidating, shipments and performs or provides for break-bulk
and distribution operations of the shipments; assumes responsibility for the transportation
from the place of receipt to the place of destination; and uses for any part of the
transportation a [surface carrier] carrier subject to jurisdiction [of the Department
of Transportation] of under this subtitle." International ocean freight forwarders arranging
for shipments to and from the US must be licensed by the Federal Maritime Commission as Ocean
Transportation Intermediaries. An Ocean Transportation Intermediary is either an ocean freight forwarder
or a non-vessel operating common carrier. 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. Companies may obtain both licenses
and may act in both capacities. The U.S. legal distinction between the two is that a freight
forwarder acts as the agent of a principal and the NVOCC is a transportation company
that is physically responsible for the carriage of goods and acts as its own principal. Companies
acting strictly as an Ocean Freight Forwarder typically do not issue their own contract
of carriage and as agent are generally not liable for physical loss or damage to cargo
except in cases of errors in judgment or paperwork or fiduciary responsibility. NVOCCs act as
ocean freight carrier and issue their own bill of lading and are legally responsible
for physical loss or damage in accordance with the terms and conditions of their bill
of lading and tariff. Similar to other countries, freight forwarders that handle international
air freight frequently obtain accreditation with the International Air Transport Association
as a cargo agent; however, they must obtain an Indirect Air Carrier certification from
the Department of Homeland Security. References