At a dinner party recently someone asked my friend Jim, “So Jim, what do you do for a living ?”
Jim said “Oh, I am a freight forwarder”
“A who……….!!” comes the reply..
Freight forwarders are an integral part of the supply chain and global maritime trade, which in turn, is responsible for the carriage of over 90% of the world’s trade..
However, many people are still unaware of Who is a Freight Forwarder and their role in the whole chain..
To explain, there is no one simple and quick explanation as to who is a freight forwarder and what they do..
In the most succinct and layman terms, a Freight Forwarder is a multi-function agent/operator who undertakes to handle the movement of goods from point to point on behalf of the cargo owner..
However, there is more to a freight forwarder’s activity..
The essence of freight forwarding is to ensure that the cargo is picked up from the seller and delivered to the buyer at the required place, at the right price and in the same condition that it is picked up from origin using the most suitable resources and routing possible..
A well established and experienced freight forwarder is expected to have below capabilities (either owned or outsourced)
- experienced in all modes of transportation – road, rail, air and sea
- able to provide cost effective and efficient cargo shipping solutions based on the customer’s requirement
- able to arrange storage for the cargo (usually all big forwarders have their own warehouses)
- able to arrange the distribution or “forwarding” of the cargo as per the instructions of their client
- have the capability to negotiate freight rates with the shipping line
- able to book cargo with the shipping line as per the requirement of the client or under their own contract
- process all relevant shipping documents such as certificates of origin, customs and port documentation, bills of lading and associated shipping/negotiating documentation (Eur1, Certificate of Origin, etc)
- issue their own approved house bill of lading (HBL)
- arrange transportation of the cargo from/to the customers premises and port
- have thorough knowledge of over border cargo movement
- able to arrange customs clearance
So, can just about anyone become a freight forwarder..??
Theoretically the answer seems to be YES..
I say this because there is no global regulation or licensing requirement for anyone wanting to become a freight forwarder compared to someone wanting to become a clearing agent or customs broker which incidentally is different from being a freight forwarder.
As long as one is able to fulfill above duties and the client is satisfied with their credentials, anyone can term themselves a Freight Forwarder..
A forwarder will however need to register with the Local city/revenue authorities, Tax authorities etc as per local regulations for the purposes of issuing an invoice and conducting a forwarding business legally..