An Introduction to Freight Forwarding 

Freight forwarding entails the logistical arrangement of intermodal

transport of commodities across international borders, on behalf of
shippers. Duties include freight rate negotiating, container tracking,
strategizing, and much more.

TABLE OF CONTENTS
What is Freight Forwarding?
What Do Freight Forwarders Do?
Freight Forwarders are…
Roles & Responsibilities
Freight Forwarding Processes

FREIGHT FORWARDING
What is Freight Forwarding?
In a globalized market, freight forwarding entails the logistical
arrangement, organization and monitoring of transported goods from a
supplier and/or manufacturer to intended recipients, internationally. This
includes:

 Tracking Shipments
 Filing Documents for Customs Clearance
 Warehousing
 Negotiating Freight Rates
 Scheduling Cargo Space
 Consolidating Freight
 Supplying Cargo Insurance
 QUESTION

What Do Freight Forwarders Do?

 
ANSWER
Forwarders perform all duties necessary for the intermodal transport of
commodities across international borders, on behalf of shippers.
Shippers often outsource supply chain coordination to freight
forwarders.
 
In short, freight forwarders arrange the importing and exporting of
goods, but do not actually move the goods themselves

Freight Forwarders are…

Architects of transport
The freight forwarding industry is represented by the International
Federation of Freight Forwarders Associations (FIATA), a non-
governmental organization serving approximately 40,000 freight
forwarding and logistics firms that collectively employ 8 to 10 million
people within 150 countries. FIATA endearingly (and accurately) refers
to its member forwarding and logistics firms as “architects of transport.”
Customs brokerage experts
Seamless importing and exporting of goods across international borders
requires refined industry know-how. International forwarders possess
the necessary expertise to prepare and process customs documents.
Forwarders typically are tasked with reviewing the following:

 Commercial Invoices
  Shipper’s Export Declarations
 Bills of Lading
 All Other Documents Required by the Carrier or
Exporting/Importing Countries.

Agile planners
International trade almost always mandates more than one mode of
transportation to move a given parcel from its originating country to its
final destination. This may comprise a combination of road, rail, sea,
and/or air, all within a single supply chain. Forwarders book cargo space
for shipments through each stretch of the journey, and coordinate all
intermodal requirements on behalf of the shipper.
Tactful negotiators
Forwarders know the value of a good carrier, and work hard to nurture
mutually beneficial relationships with preferred steamship lines. With or
without healthy working carrier relationships, savvy forwarders will still
open their business to bids from various carriers, to ensure competitive
freight rates for their shipments.

Freight Forwarders
Roles & Responsibilities

Require
notification of any production or travel delays
 Research
any labor issues at ports involved with transportation

Plan
for extreme weather that could result in delays

Prepare
insurance coverage

Provide
warehousing, at home and abroad
 Consolidate
shipments from multiple suppliers

Communicate
any changes in delivery requirements

Ensure
damaged equipment is inspected at the point of loading

Calculate
estimated delivery times at each stage of intermodal transport
 Monitor
steamship line notices for disruptions

Track
holidays and government actions in origin country

Share
pertinent information regarding hazardous materials
 A 12 STEP PROGRAM
Freight Forwarding Processes

 Step 1

The Purchase

o Find a suitable international supplier.

o Negotiate transaction/payment terms (Letter
of Credit or others).
o Buyer and seller agree upon terms of sale.

 Step 2

Order Awarded & Initiated

Buyer issues a purchase order to the supplier.

 Step 3

Determine & Agree Upon an Anticipated Date of Completion

 Step 4

Goods Are Manufactured

Supplier drafts a packing list.

 Step 5

Shipment Is Prepared for Export

Supplier creates commercial invoice and prepares export documents
required by origin country, including:

o Export Declaration
o Commercial Invoice
o Certificate of Insurance (COI)
o Permit

 Step 6

Vendor Contacts the Buyer Or Freight Forwarder

 Step 7

Freight Forwarder Arranges Cargo Transportation with the

Carrier(s)

 Step 8

Cargo Is Loaded Onto Vessel or Aircraft & Begins Its Journey to

Importing Country
Carrier Transportation Waybill

 Step 9

Customs Broker Submits All Necessary Customs Documents

 o Commercial Invoice
o Customs Invoice
o Copy of Carrier Waybill
o Certificate of Origin
o Permits

 Step 10

Customs Broker Is Notified When the Shipment Arrives at Its

Destination Port

 Step 11

Shipment Is Tendered for Final Delivery

o Receiving Report
o Inventory Report
o Payment Issued
o Entered in the General Ledger
o Customs Compliance Check Conducted

 Step 12

Shipment Is Cleared for Import Duties & Taxes Paid