The logistics industry has a full suite of complex jargon and it can often be difficult to unpick what service or provider is right for you. Not to mention, the industry is constantly changing. Brexit, COVID-19 and regulation shifts are all components that continue to make the industry evolve. Roles within the industry have changed with this shift, meaning lines between various logistics providers have begun to blur. Within this eBook, we hope to pull back the curtain on what freight forwarders do, how they sit within the logistics industry at large and how you can harness their expertise.
What is freight forwarding?
Simply put, freight forwarders are the link between the people shipping the goods and the carriers. A carrier, also known as a liner, is a transportation service, like for example, an airline, a shipping line or a haulier. Freight forwarders are in charge of communication with various carriers to negotiate price and decide on the most cost effective, efficient and quickest route. As most freight forwarders handle international goods, they also know how to adapt and handle customs documentation.
Shipping, logistics, freight forwarding- they’re all the same word, or are they? These words often seem interchangeable, and although there are some crossovers between them- there are some key differences.
Freight forwarders provide logistics services, coordinating and shipping goods and cargo domestically and internationally.
They often partner with several logistics companies either nationally or internationally. This means that price checking capabilities are far better and more thorough than what you would get if you worked directly with one logistics company. Freight forwarders also have more knowledge and experience around specialty companies. These tend to vary greatly regarding types of transport, house moving, fragile goods, and lead times, among other factors.
Unlike a 3PL where storage is part of their offering, freight forwarders don’t often tend to include storage. However, they may provide limited storage or warehousing services specific to the transit of goods in some cases. This isn’t long-term storage, but rather any short-term stop or prep work required to move your items.
A 3PL company serves as a warehouse partner by storing, managing, packing and shipping goods. Many 3PL companies have freight forwarding solutions (or access to those solutions), but not every third-party freight forwarder is a 3PL.
Customs and roles
Freight forwarders also handle all the paperwork related to international shipping, helping e-commerce retailers navigate the often confusing world of customs and export declarations.
It’s worth noting that many freight carriers don’t work directly with shippers—they exclusively work with freight forwarders, who are specialist intermediaries.
With the rise in demand for international e-commerce, the demand for freight forwarding has also increased. As a connector of many elements in the supply chain, freight forwarders can help e-commerce retailers keep costs low, whilst simplifying the complex moving parts of logistics for the merchant. Previously, freight forwarders focused on shipping products in bulk to fixed locations such as shops to add to their inventory. Now, with online shopping, individual shipments to a customer’s doorstep both domestically and internationally is a key component of the industry.
Real-time tracking
Online shopping has also brought the advent of real-time tracking. This is something freight forwarders did not offer for vessel and air tracking. Although much of the freight forwarding industry is still archaic, a few freight forwarders are slowly making the transition to transparently show in real time, where cargo is all over the world.
