Understanding Shipping: What is a freight forwarder?

19/12/2023

Shipping goods across the world can be a complicated business, and it can be helpful to have some help on hand, especially during busy periods.

This is where a freight forwarder could come in and help alleviate some of the pressure. Acting as middlemen, freight forwarders deal with shipping companies, logistics experts and port authorities. Working on behalf of cargo owners to arrange the transportation of goods, one of their chief responsibilities is to process all the paperwork, including customs documentation, bills of lading and import/export paperwork involved in international cargo shipping.

The Distinction Between a Freight Forwarder and a Shipper?

A freight forwarder is an agent that works on behalf of shippers – businesses that own the goods that are being shipped. Freight forwarders organise the shipments, working with shipping carriers like MSC, intermodal providers, and ports to ensure that shipments move smoothly through the logistics network.

They act like a travel agent for your shipments, helping to reassure that transportation will be an efficient process. Freight forwarders try to find the most cost-effective way to transport cargo, including selecting optimum routes, times and costs.

Many freight forwarders started out as customs brokerage experts. They have a wealth of experience in the procedures, legislation, customs tariffs and rules around import and export duties, all of which helps ensure that the administrative aspect of organising international shipping run smoothly.

There are several instances where the services of a freight forwarding company might be used:

Customs regulations
Helping to prepare the necessary shipping documents, such as bills of lading, export declarations, and customs clearance documents
Import/Export clearance
Arranging transport
Packaging and labelling
Logistics and security
Insurance
Tracking and monitoring of shipments

In these instances, or if you’re looking for added support when shipping large volumes of goods, it might be worth considering working with a freight forwarder.

Freight forwarders serve customers shipping cargo by sea, air, rail or highway, and operate on an end-to-end basis. Some will specialise in certain industries like food, automotive, pharmaceuticals or clothing.

The Journey Through the Freight Forwarding Process

Freight forwarders have procedures to follow at every step of a cargo’s journey. They will prepare all paperwork in advance of any shipment, some of which may be complex especially for long distance shipping routes.

Export haulage and customs clearance

Typically, on international shipments, the first stages of the freight forwarding process involve transporting the goods to the freight forwarder’s warehouse or port of load. Customs officials inspect the goods leaving the country of origin and must approve the product, its safety and legality, and the customs documentation before this can happen.

Items checkpoint and customs clearance

Goods will be inspected in the destination country, to ensure that they match the booking documents and have arrived undamaged. Freight forwarders can be on hand to ensure that goods with restrictions, such as alcohol, dangerous items and perishable produce, meet each country’s regulations.

Arrival, handling and import haulage

After import checks have been made, paperwork is confirmed for the products. The goods make the last stage of their journey by road, rail or whichever mode of transport is suitable for the goods and the final destination.

Freight Forwarders: Customs Regulations Experts

Perhaps the most specialised area for freight forwarders, is the procedures and documentation around customs clearance. Freight forwarders should have AEO (Authorised Economic Operator) status, indicating that they are approved by national customs authorities and comply with supply chain security standards.

This expertise in customs clearance is not limited to freight forwarders. Thanks to their local expertise in each country agency, some shipping companies (including MSC), can also clear imports and exports for their customers. As these requirements can vary from country to country, these local connections are vital.

Freight forwarders have a detailed knowledge of customs tariffs and import and export clearances for commercial and non-commercial goods. Their knowledge of the processes and systems, as well as their direct connections enable export and import declarations to be sent quickly and efficiently.

Freight Forwarding Jargon-Buster

FOB
Free on board.
A shipment term that defines the point in the supply chain when a buyer or seller becomes liable for the goods being transported.
CIF
Cost, Insurance and Freight. With Cost, Insurance, and Freight, the seller covers the costs, insurance, and freight of a buyers order while in transit.
DDP
Delivered Duty Paid. Responsibilities and costs of delivery are covered by the seller, including export and import formalities, fees, duties and taxes.
Inco-terms
11 internationally recognised rules defining the responsibilities of buyers and sellers of goods, with regards to insurance, shipment, documentation, customs clearance and other logistics activities.

Ask MSC

Here at MSC we provide consultation and advice on all your shipping requirements, and can help with our range of shipping and logistics services. Contact us today to explore how MSC’s full range of shipping and transportation solutions could be beneficial for your business.