What is FREIGHT FORWARDER? What does FREIGHT FORWARDER mean? FREIGHT FORWARDER meaning - FREIGHT FORWARDER definition - FREIGHT FORWARDER explanation.
Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.
A freight forwarder, forwarder, or forwarding agent, also known as a non-vessel operating common carrier (NVOCC), 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 or often multiple carriers to move the goods. A forwarder does not move the goods but acts as an expert in the logistics network. These carriers can use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often multiple modes for a single shipment. For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by truck, flown to the destination city, then moved from the airport to a customer's building by another truck.
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 its client. In Europe, some forwarders specialize in 'niche' areas such as rail-freight, and collection and deliveries around a large port.
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 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 (principal) or as an agent for his customer or both.
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 (incoterm) FOB (free on board), and by the exporter at the origin in the incoterms CFR (cost and freight) and CIF (cost, insurance and freight). 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.