What is an International Freight Forwarder?

 

... "Once upon a time, people thought of customs brokers and freight forwarders as simply agents somehow linked to the shipping industry.  Now, at last, these go-betweens are being given their due as crucial middlemen in making life easier for importers and exporters.  ....  Simply put, the freight forwarder is the cargo expediter.  As intermodal transportation becomes more complex, the job of freight forwarder becomes more essential and difficult.  He must coordinate the complexity of financial, transport and other service activities.  For example, he will:

- Arrange to receive export shipment for a client at any point of origin in the United States.

- Arrange consolidations of less-than-container load lots.

- Arrange forwarding to seaboard of the cargo loaded aboard ship.

- Arrange for insurance coverage.

- If necessary, arrange free domicile delivery abroad.

... Many forwarders offer the same service on air freight and are consolidators."

... Journal of Commerce, March 6, 1989

 

"Freight Forwarders can be thought of as travel agents for cargo shipped to overseas locations.  Most employ highly skilled and knowledgeable staffs who search for the most economical means to ship your cargo.  The myriad of documentation requirements and government formalities are the details commonly handled by the Freight Forwarder."

... International Trade Line of Balto. County Chamber of Commerce, January, 1992 issue

 

            "An international freight forwarder brings together all the loose ends that must be coordinated if American products are to be shipped to foreign buyers in the course of our nation's international trade. 

            They are both small and large firms that have been licensed by the Federal Maritime Commission as fit, willing and able to provide the expert know-how and expertise needed to arrange for the movement of cargo from inland points to foreign destinations with maximum speed and efficiency and at the least cost to the exporter. 

            The international freight forwarder must have an intimate knowledge of transportation techniques, both their possibilities and limitations, and has to know how to advise and act in the best interests of his exporter principal. 

            Often called the "Architect of Transport", the forwarder performs an essential role in America's constantly growing foreign trade".

...  "Freight Forwarder: Transport Architect", National Customs Brokers & Freight Forwarder's Association

 

" 'Ocean freight forwarder' means a person in the United States that:

            (1) Dispatches shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers; and

            (2) Processes the documentation or performs related activities incident to those    shipments."...Part 510.2(n) of "Licensing of Ocean Freight Forwarders"

 

What specific functions does a freight forwarder normally perform?   

.... "Forwarder's Procedure", courtesy of Journal of Commerce

 

1.  Preliminary advice to the exporter:

 

            Explaining exporter's responsibilities / obligations under Terms of Sale (Incoterms) requested.

 

            Assist in negotiating inland and ocean rates; provide ideas on optimal and most cost effective shipping alternatives.

 

            Assist in determining the best way to ship i.e. - container vs. breakbulk, consolidation vs. exclusive use, conference vs. non-conference, air vs. ocean.                    

           

            Packing / Marking recommendations.

 

            Explain port functions in connection with export.

 

            Advice as to what the exporter should accomplish and what the forwarder will accomplish for him.

           

            Review import licenses, where applicable.

 

Recommendations regarding receiving payments for exports -- explanation of methods of payment.

            Interpret and control Letters of Credit.

            Advice as to possible problems may encounter: Improper packing, cheapest method of shipping not always the best, document discrepancies that can cause slow or non payment and/or confiscation of freight in foreign port, consequences resulting from late delivery of freight and/or late documents.

            Estimate complete Export transportation and related costs for quotes (on Proforma invoice) and L/C.

            Advise of drawback opportunities for previously imported cargo being exported.

            Can put exporter in touch with experts in the fields of trade financing, international marketing, government export requirements, international banking, and marine insurance.

            Most forwarders have a "library" of information on U.S/overseas ports, which exporters can use as guidance.

2. Booking the freight / Shipping Operations:

            Provide custody and control of material in transit.

            Expedite production and delivery.

            Coordination of positioning empty container to be delivered / returned (inland carrier), where stuffing takes place.

`           Choosing the steamship line as required.

            Mechanics of booking and shipping: special handling considerations, ETA destination required, port of export, port of destination, direct vs. transshipment, number/kind of packages, commodity precise description, size and type of container.

            Handling freight or other moneys advanced by shippers, or remitting or advancing freight or other moneys or credit in connection with the dispatching of shipments.

            Provide NVOCC consolidation services to exporters for LCL and FCL modes.

3. Documentation for shipping:

            Certify and notarize invoices.

            Normally prepare dock receipt, bill of lading; warehouse receipt, insurance certificate, AID documents, certificate of origin, special customs invoices, inspection certificate.

            May prepare or assist in preparing with exporter: commercial invoice, packing list, draft, transmittal letters, consular invoices, export license, drawback forms, shipper's export declaration.

 4.  Notifications made in connection with the shipment:

            Notification normally made to exporter/shipper, consignee, consignee's broker.

            Notification made for insurance, L/C, contract, payment, and advice purposes.

            While shipment is underway, forwarder may trace as necessary, assist in filing claim when necessary and correct errors learned after the fact.

5.  Distribution of negotiable documents for collections:

            Forward documents to Bank, exporter's foreign sales representative, consignee or consignee's broker.