What is Freight Forwarding?

Freight Forwarding 101

As our world’s economy continues to grow, shipments across the world continue to increase both domestically and abroad. For some companies, domestic freight is not a problem, but as companies expand internationally they must choose if they would like to expand their own in-house shipping functions or choose a freight forwarding company.

Shipping abroad adds complexity. Expanding internally means a higher investment in logistics, technology licenses, and finding the correct skill set(s) to keep things running smoothly. Sometimes the investment of building or expanding a company’s logistics team is undesirable, the cost is too high, or companies prefer to keep their focus on their own business items.

What is a freight forwarder?

A freight forwarder is a business that organizes shipments for individuals or corporations to get goods from the manufacturer to a customer or final point of distribution.

Freight forwarders specialize in lowering costs and facilitating the logistics of transportation.

What does a freight forwarder do?

The freight forwarder is an intermediary between a shipper and the final point of distribution. While the freight forwarder does not actually move the freight itself, the freight forwarder arranges various transportation services such as ocean shipping on cargo ships, road transport, and expedited shipping by air freight.

A freight forwarder utilizes established relationships with carriers, from air freighters and trucking companies, to ocean liners, in order to negotiate the best possible price to move shippers’ goods along established trade routes by working out various bids and choosing the best path that optimizes speed, cost, and reliability.

Freight forwarders typically handle ample amount of logistics of shipping goods from one international destination to another, a task some companies view as a formidable or too complex.

NEXT MONTH: Why choose a freight forwarder?