Freight forwarders: what is it

Freight forwarders are companies that offer transport and logistics services for the distribution of goods internationally. These act as intermediaries between the company that sends the merchandise and its final destination. Therefore, freight forwarders doesn’t ship itself. But it offers different ways of transportation such as sea freight, road transport and air shipments.

To carry out their mission, freight forwarders make use of their trusted contacts with carriers, partners or collaborators, from specialists in air transport or trucking companies to transoceanic lines, to negotiate the best possible price and choosing the most convenient route, optimizing speed, costs and reliability, considering all the variables necessary for the analysis of each case.

Besides, a freight forwarder works both for private clients and for other companies. These can be exporters or importers of products. They are a key piece in triangular operations, since they usually manage a considerable volume of shipments, between different international destinations. These types of operations are complex from the point of view of documentation and above all tax with the VAT settlement.

It is worth mentioning that most freight forwarder are Authorized Economic Operators (AEO). And with it, the advantages at the level of simplification of customs activity and security of the facilities.


What are the functions of freight forwarders?

As we have already mentioned, their functions are very different. In general, we could say that this type of company provides added value to both the transport and distribution of goods. Thus, we can say that it is an international logistics service. However, we can simplify its main functions as the following:

  • Carring out international transport of products and merchandise.
  • Making personalized performance reports for each client.
  • Using key performance indicators (KPIs) when monitoring processes.
  • Offering advice when it comes to promoting cost optimization.
  • Insurance of the products or goods that are going to be moved.
  • Advicing you on the most suitable packaging depending on the type of product.
  • They also offer customs advice so that the client has all the necessary documents

How is a freight forwarder different from a customs broker?

In common, both freight forwarders and customs brokers work with the relevant documents so that the products pass customs. However, and unlike a customs broker, a freight forwarder will also be in charge of negotiating rates related to transportation on behalf of the client. And thus obtaining more competitive prices and a better service together for them.