Individual Assignment

Question 2
Freight Forwarders: Explain their roles and responsibilities
In the second part your opinion on how you can get the best service from freight
forwarders

1. Introduction
Freight forwarders perform a key role in any trade. The freight forwarder is the
architect of the international transport and plays an important role in the growth of the
international trade by facilitating exporters, shippers, importers, customs/ports authorities
and others(Laura, 2017).
Freight forwarding is a service used by companies that deal in international or
multi-national import and export(Ataoglu, 2015). While the freight forwarder does not
actually move the freight itself, it acts as an intermediary between the client and various
transportation services. Sending products from one international destination to another
can involve a multitude of carriers, requirements and legalities. A freight forwarding
service handles the considerable logistics of this task for the client, relieving what would
otherwise be a formidable burden(Ataoglu, 2015). Freight forwarding services guarantee
that products will get to the proper destination by an agreed upon date, and in good
condition. The freight forwarding service utilizes established relationships with carriers of
all kinds, from air freighters and trucking companies, to rail freighters and ocean
liners(Laura, 2017). Freight forwarding services negotiate the best possible price to move
the product along the most economical route by working out various bids and choosing
the one that best balances speed, cost and reliability(Laura, 2017).
Freight forwarding plays an important role in facilitating international trade, fulfilling
a number of distinct functions. In basic terms they act on behalf of exporters to buy and
manage transportation services(Laura, 2017). These usually include air or sea freight ,
as well as land transportation services to move goods from the shipper to the port . Freight
forwarding has become an increasingly complex and specialized service in the current
context of globalization, tight security regulations and skills shortages(Ataoglu, 2015).

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2. Types of Freight Forwarders
According to Bill (2017) there are different types of freight forwarders, depending
on the activities they carry out and also the title they have that allows them to be
accredited in certain Official Registers, which is obligatory to carry out certain activities.
From the highest to the lowest level of services, the following types of operators and
agents can be distinguished as freight forwarders:

a. Consolidators/NVOCC (Non-Vessel Operating Common Carriers).

.
b. Multimodal (or intermodal) transport operators (MTO´S).

c. Customs brokers.

d. Port (sea port, airport or cargo terminal) agent.

e. Air freight agent (air waybill agent).

f Road haulage brokers.

g. Loading brokers.

3. Roles and Responsibilities

A freight forwarding service utilizes established relationships with carriers, from air
freighters and trucking companies, to rail freighters and ocean liners, in order to negotiate
the best possible price to move shippers’ goods along the most economical route by
working out various bids and choosing the one that best balances speed, cost, and
reliability (Jagt, 2014). Freight forwarders handle the considerable logistics of shipping
goods from one international destination to another, a task that would otherwise be a
formidable burden for their client.
Freight forwarders provide exporters and importers with assistance in transporting
their product from one place to another. This means assisting traders with advice and

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with all the formal paperwork that must be completed ensure smooth export of
cargo(Sarker, 2019). Modern freight forwarders now take care of the entire supply chain
in addition to serving as the trader’s shipping department, their role also includes
shipping, product sourcing, inventory management customs clearance, warehousing, and
even distribution(Sarker, 2019). A forwarder’s extensive knowledge in all aspects can
ease the exporting or importing process for many companies. Among of freight forwarder
responsibilities are as follows:

a. Give recommendations to the customer

The freight forwarder advice the exporters about their responsibilities and
responsibilities as per law(Brooks, 2018). They also help the customer in choosing
the most affordable means of freight shipping as well as bargain for the best cargo
shipping rates(Brooks, 2018). Freight forwarder also give customer the opportunity
to choose the best way to ship their goods(Ataoglu, 2015). They also makes clear
what tasks they would perform and what the customer would require to perform
during the shipping process as well as advice on ways of receiving payment of
exported goods(Ataoglu, 2015). The most important thing is that they will inform
the customer in advance about the possible problems of freight shipping. Freight
forwarder also help customer get in touch with the experts of trades like
international marketing, financing, international banking, marine insurance and
government export based on their wise rapport(Sarker, 2019).

b. Perform freight shipping operation

The freight forwarder will ensure that the freight shipping is under control
and the goods are safe while in transit(Sarker, 2019). They also will channelizing
the process of empty container to be sent or returned after filled in with the goods.
To better perform, freight forwarder will choose the right mode of transportation,
and transporter to deliver the goods(Laura, 2017). They also deal with booking and
shipping of the shipment, which need special considerations like port of
destination, expected time of arrival at destination required, port of export, size and
type of container, and the type / number of packages(Brooks, 2018).

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 c. Documentation
A forwarder is responsible for getting insurance certificate, inspection
certificate, special customs invoices, and certificate of origin(Ataoglu, 2015). They
also responsible in preparing dock receipts, lading bill, warehouse receipt, and
other related documents. Some freight forwarder also assist or prepare
commercial invoice, packing list, export license, drawback forms, consular
invoices, draft and shipper’s export declaration for the exporters(Ataoglu, 2015).

d. Keep the Shipper Notified

The freight forwarder responsible in updating and send notices to
consignee, consignee’s broker, and shipper with regard to shipment current
location and it progress(Jagt, 2014).

e. Send documents for collection

Freight forwarder also responsible in sending documents to shipper’s
international sales representative, consignee or their broker, and to bank(Sarker,
2019).

4. How to get best service

As a customer, it is vital to choose the right freight forwarder, not only to save the
cost but most important things is able to meet customer expectation especially when
involve with international business trades. It’s important that customer to build a good
relationship with freight forwarder because freight forwarder is responsible for getting
customer freight safely to its destination, so customer should emphasize on having a
good, long-lasting and equally beneficial business relationship. In order to get best
service from freight forwarder, customers are advised to study and consider the
following factors

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a. Experience.
Experienced forwarders probably have encountered a number of problems
over the years, so they are able to quickly and professionally resolve any problems
and difficulties with customer shipment especially international trade. Years of
experience means the freight forwarder has dealt with different situations like
dockworker strikes and port shutdowns, needs for rerouting cargo, smoothing out
customs or warehousing issues and others(Ataoglu, 2015). Experience also
usually means the freight forwarder will help customer avoid customs,
warehousing, and routing problems before they even start so that international
shipping will go smoothly(Sarker, 2019). Experience also gives time for a company
to form and cultivate business relations around the world from which customer will
benefit. Although some forwarding company has established for a long time does
not mean they have wise experience because some companies only deal with
domestic trades and never have experience dealing at international trade.

b. Network
In any case, the freight forwarder must have a strong network. By hiring
an internationally well-connected freight forwarder, customer can get the best
shipping rates for their goods and ensure that products reach to destination on
time(Sarker, 2019). For example, Universal Cargo Management has a very large
network and ships to and from almost anywhere in the world. However, customer
may have noticed a key word in there that is almost. It means that there are a
few places in the world Universal Cargo Management does not ship to or from.
Customer also may have found a freight forwarder who is great for shipping to
the Philippines, but don’t have the connections or experience to do a great job
handling import or export from China. Thus, customer have to ask and find out
the freight forwarder’s connections and experience in the specific locations.

c. Services.
Customer should look at the services offered by the freight forwarder. A
freight forwarder should be able to handle more than just the air shipping or

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 ocean shipping part of customer import or export(Brooks, 2018). They should
also be able to handle the rail and/or trucking portion at international shipping
(Brooks, 2018). If customer only need port to port services instead of door to
door shipping, customer wouldn’t find it a big deal whether or not the freight
forwarder offers this service. However, if the freight forwarder do not have a
trucking options, that says something about the freight forwarder’s network.
Moreover, there are more services required by customer from freight forwarder.
For example, Universal Cargo Management partnered with TOLL that offer
Supply Chain Value Added Services such as improve speed of customers goods
to market, reduce operating costs and manage inventory levels more
effectively(Jagt, 2014).

d. Customer Service.
Like any other industry, customer service is important. A freight forwarder
with excellent customer service will provide the support that customer need to
expand internationally(Brooks, 2018). This is particularly crucial if this involve
customer first foray into the overseas market. Exceptional customer service
ensures customer always have direct access to the agent managing their cargo.
They will provide open lines of communication should customer have any
questions about a shipment(Bill, 2017). What’s more, they will have a high level
of responsiveness, alerting to customer with any issues or delays regarding their
cargo(Jagt, 2014).

5. Conclusion
In conclusion, customer also plays a role in choosing a freight forwarder that
meets the needs. There are various services provided by freight forwarders nowadays
with varying rates depend on volume of goods and how fast the goods is required to
reach its destination. With increasingly complex international trade arrangements such
as import or export of goods, it can be simplified by hiring experienced and well
established freight forwarder.

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References:

Ataoglu, K. A. (2015). The Fundamental Roles of Freight Forwarder in the Execution of

International Logistics. Journal of Applied Business and Economics, (October).
https://doi.org/10.13140/RG.2.1.3885.1282
Bill, A. (2017). What is a Freight Forwarder? Types and Functions. Retrieved January
28, 2020, from https://www.globalnegotiator.com/blog_en/freight-forwarder-
forwarding-agent-meaning-definiton/
Brooks, S. (2018). What is the role of a freight forwarder ? Retrieved January 27, 2020,
from https://www.universalcargo.com/5-tips-on-how-to-choose-a-freight-forwarder/
Jagt, N. Van Der. (2014). Role of Freight Forwarder: Actors of Multimodality and
appropriate modal choice. Retrieved January 27, 2020, from
https://www.unece.org/fileadmin/DAM/trans/doc/2014/wp24/van_der_Jagt__CLEC
AT__-_2nd_session.pdf
Laura, P. (2017). Introduction to Freight Forwarding. Retrieved January 26, 2020, from
https://ww.shippingcollege.co.uk/main-items/376-introduction-to-freight-forwarding-
course-notes
Sarker, S. M. A. N. (2019). Freight Forwarding Industry: Function, Economic Role and
Future Market in Bangladesh. Journal of International Economics, (May 2017).