Triple F: Freight Forwarding Functions
Are you wondering what exactly is a freight forwarder? What specifically do they do?
This article is here to explain the freight forwarding functions in just a quick read:
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Written by:?Wallace Hester, Director of Sales at?Rogers & Brown
April 11th 2024
Freight Forwarding is one of those shipping terms and definitions that seem logical, yet when considering the various functions of a freight forwarder, one quickly learns that there is much more than meets the eye. Freight forwarders are typically involved in managing various logistical and transportation-related elements associated with day-to-day shipments. To be clear, this article focuses on international freight forwarding and the service functions provided by international freight forwarders, one time more commonly known as foreign freight forwarders.
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An international freight forwarder, is a licensed transportation intermediary – a third party service provider that organizes and arranges international shipments and supports various elements of international freight movements and transactions – logically, freight forwarders are doing all the leg-work to forward the fright from point A to point B. Mostly freight forwarding is synonymous with export transactions, but an international freight forwarder is typically executing both export and import transactions. These forwarders do not have to be global entities to do so. Forwarders that do not have their own presence in foreign countries will work with partner agencies (freight forwarders in those countries with whom they have a financial and operational contract) to offer mutually beneficial services to underlying shippers/buyers. Freight forwarders can also assist in the consolidation of freight shipments on behalf of multiple shippers/buyers. These functions of freight forwarding generally include, but are not limited to:
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Freight Quoting / Contract Management - confirm rates for individual movements and / or supporting shipper contracts.
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Freight Booking - establishing a reservation for space on vessel, airplane or other conveyance.
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Freight Arrangements - setting up pre- and post-legs of transport up to and from origin and destination ports / airports / border crossings.
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Shipment Execution - working with multiple parties to execute transportation arrangements, freight dispatch, communication with shipper, consignee and third-parties, all within required timeline dictated by shipment ready date, and booking dates such as port cut-off and estimated departure date.
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Customs / Government Agency Filings – for cargo exiting the U.S. this is usually the EEI (Electronic Export Information) submission; for inbound freight forwarding it may be AMS filing to carrier or potentially an Importer Security Filing (ISF).
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Documentation Issuance - Issue bill of lading instructions to primary transport carrier; issue specialized shipping documents as required per transaction, participating government agency documents as required plus supporting Letter of Credit review and execution.
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Shipment tracking – ensuring timely meeting of all shipment-related deadlines, tracking underlying carrier movements and addressing delays as needed, all of which is typically reportable to client.
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Now in order for a freight forwarder to execute all of the above functions in a timely manner, while maintaining compliance with all applicable regulatory and transportation requirements and while meeting all the needs of the underlying client as pertains to shipping terms, transit time requirements and any special requirements for the products being shipped requires the freight forwarder to know their stuff!
Freight forwarders need to know what carriers go where - for all modes of transportation, which carriers have the faster routings, which carriers move specialized cargo. Freight forwarders must have a healthy network of vetted carriers across the globe and for all modes of transport. Then the forwarder must be able to procure competitive rates for the needed service. Making a booking is not too hard, but then traffic arrangements must be made in conjunction with all shipment booking dates. Shipment execution, government agency filings and then documentation tracking and problem resolution!!! And THEN multiple that times 20 because more often than not shipments are not the same.
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One, perhaps silly but decent, description of a freight forwarder is a “travel agent for freight”…..seems about right. Like a travel agent, your freight forwarder should guide you, give you numbers and options and be able to execute from door-to-door anywhere in the world.
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Stay tuned for future articles that will delve into pricing for freight forwarding functions and other related functions closely intertwined with freight forwarding.
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