Engineering:Freight forwarder
A freight forwarder or forwarding agent is a person or a company who co-ordinates and organizes the movement of shipments on behalf of a shipper (party that arranges an item for shipment) by liaising with carriers (party that transports goods). The carriers may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks. FIATA describes a freight forwarder as the "Architect of transport".
International freight forwarders typically handle cross-border logistics and have additional expertise in preparing and processing customs documentation and performing activities pertaining to the regulations of different countries. Freight forwarders typically have information with respect to commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment.
Modern freight forwarders offer an end-to-end process i.e. shipping the goods from the place of origin to the final destination and may offer additional services such as warehouse planning, cargo insurance and customs brokerage. Together with tracking, freight forwarding agents often have real time information on the freight. Some forwarders may specialize in niche areas such as rail-freight, and collection and deliveries around a port.
History
The first international freight forwarders were innkeepers in London, England who held and re-forwarded the personal effects of their hotel guests in the early 1800s.[1] One of the earliest freight forwarders was Thomas Meadows and Co. Ltd., established in 1836.[2] With the increase in trade between Europe and United States , Medows served as an intermediary to arrange for the transportation of freight from the manufacturers to customers through rail transport and steamships. The services were later expanded to cover consultative solutions and handling customs requirements.[2]
Definition and functions
A freight forwarder is an entity who co-ordinates and organizes the movement of shipments on behalf of a shipper (party that arranges an item for shipment) by liaising with carriers.[3] A carrier is an entity that actually transports goods and may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, including multiple modes for a single shipment.[4] For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by truck, flown to the destination city and then moved from the airport to a customer's building by another truck.
A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks.[5] International Federation of Freight Forwarders Associations (FIATA) describes a freight forwarder as the "Architect of transport".[6]
The original function of the forwarder was to arrange for carriage by contracting with various carriers. Forwarder responsibilities included advice on documentation and customs requirements in the country of destination. His correspondent agent overseas looked after his customers' goods and kept him informed about matters that would affect the movement of goods. Modern freight forwarders offer an end-to-end process i.e. shipping the goods from the place of origin to the final destination and may offer additional services such as warehouse planning, cargo insurance and customs brokerage.[7] In a single transaction, the forwarder may be acting as a carrier (principal) or as an agent for his customer or both. Together with tracking, freight forwarding agents often have real time information on the freight.[8] Some forwarders may specialize in niche areas such as rail-freight, and collection and deliveries around a port.
International freight forwarders typically handle cross-border logistics and have additional expertise in preparing and processing customs documentation and performing activities pertaining to the regulations of different countries. Freight forwarders typically have information with respect to commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment.[9] Freight forwarders often charge a fee for the activity and might include transportation costs from factory and to delivery, freight charges, customs and other fees and documentation charges.[10]
National variations
- In Australia , most licensed Customs Clearance Agents operate under a freight forwarder. The entities are registered with the government with the licenses renewed every three years.[11]
- Transport Canada is the federal department responsible for implementing and enforcing transportation policies and programs with the Canada Border Services Agency responsible for enforcing most regulations that affect international freight forwarders. The Canadian International Freight Forwarders Association (CIFFA) was established in 1948 to support and protect the character, status, and interest of foreign freight forwarders by establishing uniform trade practice and regulations.[12]
- Federation of Freight Forwarders’ Associations in India (FFFAI) is the apex body and the umbrella body of 28 associations across India representing 6,500 custom house agents, employing over 1.1 lakh people.[13]
- With more than 82% of manufactured products being exported, freight forwarders are important contributors to the Irish economy. Associations including the Irish International Freight Association represent the industry through educational and representative roles.[14]
- In Kenya and Tanzania, freight forwarders are commonly referred to as clearing and forwarding agents. A license is required, which can be acquired from the respective revenue authorities. Freight forwarders are responsible for clearing consignments through customs, arranging transportation and forwarding the consignment to the consignee.[15]
- Freight-forwarding in Nigeria has been in place since the exporting of groundnut as a cash crop beginning in 1914, though not initially as freight forwarding but as the means of transportation of goods and services from one country to another. Following the method of their British, agents were used to facilitating the transport of goods and services.[16]
- Pakistan International Freight Forwarders Association PIFFA has more than 500 freight forwarding companies as members and is the local representative of FIATA and member association for Pakistan .[17]
- In the United Kingdom , freight forwarders are not licensed, but many are members of the British International Freight Association (BIFA), a trade association for UK-registered companies engaged in the international movement of freight by all modes of transport, air, road, rail, and sea. BIFA has over 1600 members, known generally as freight forwarders, who offer a wide range of services within these various modes.[18]
- Companies handling domestic freight in the United States by road must be registered with the U.S. Department of Transportation's Federal Motor Carrier Safety Administration.[19] Such forwarders are "carriers" who accept freight for transport and are liable for delivering the freight under their own bill of lading.[20] International ocean freight forwarders arranging for shipments to and from the US must be licensed by the Federal Maritime Commission as ocean transportation intermediaries, who are ocean freight forwarders or non-vessel-operating common carriers (NVOCC). NVOCCs dispatch shipments from the United States via common carriers and books or otherwise arranges space for those shipments on behalf of shippers; ocean freight forwarders prepare and process documentation and perform related activities pertaining to shipments.[21]
See also
- Logistics
- Physical inventory
- Standard trading conditions
- Supply chain
References
- ↑ Jackson, Sarita (2021). International Trade in Services Effective Practice and Policy. Taylor & Francis. p. 12. ISBN 978-1-0003-6969-4.
- ↑ 2.0 2.1 How Logistics Facilitate an Efficient Freight Transportation System. U.S. Government Printing Office. 2013. p. 5.
- ↑ "Meaning and Definition of "freight forwarder"". Random House. https://www.infoplease.com/dictionary/freight-forwarder#ixzz2FhueT97J.
- ↑ "Freight Forwarder Definition & Legal Meaning". Black's Law Dictionary. https://thelawdictionary.org/freight-forwarder/.
- ↑ Huang, Sheng Teng; Bulut, Emrah; Duru, Okan (December 2019). "Service quality evaluation of international freight forwarders: an empirical research in East Asia" (in en). Journal of Shipping and Trade 4 (1): 14. doi:10.1186/s41072-019-0053-6. ISSN 2364-4575.
- ↑ International Federation of Freight Forwarders Associations (FIATA) (Report). United Nations Economic Commission for Europe. https://unece.org/DAM/trans/doc/2017/itc/Informal_document_No_13_FIATA.pdf. Retrieved 1 December 2023.
- ↑ Michelmann, Marc (1985). Load, Seal, & Ship. Load, Seal, & Ship. p. 14.
- ↑ "Strategic Considerations for Compliance to Incoterms". SIPMM Publications. https://publication.sipmm.edu.sg/strategic-considerations-for-compliance-to-incoterms/.
- ↑ "What is freight forwarding?". CAF. https://www.cafworldwide.com/blog/what-is-freight-forwarding.
- ↑ Basic overview of Incoterms (Report). DHL. 2020. https://www.dhl.com/content/dam/dhl/global/dhl-global-forwarding/documents/pdf/glo-dgf-incoterms-2020-brochure.pdf. Retrieved 28 April 2020.
- ↑ "About licensing". Government of Australia. https://www.abf.gov.au/licensing/brokers/about.
- ↑ "About our association". CIFFA. https://www.ciffa.com/our-association/.
- ↑ "Federation of Freight Forwarders' Associations in India (FFFAI)". FFFAI. https://www.fffai.org/.
- ↑ "Irish International Freight Association". IIFA. http://www.iifa.ie.
- ↑ "Clearing fowarding agents". Government of Tanzania. https://www.tra.go.tz/index.php/clearing-forwading-agents.
- ↑ Hogendorn, Jan (1978). Nigerian Groundnut Exports: Origins and Early Development. Ahmadu Bello University Press. ISBN 978-9-7812-5005-7.
- ↑ "About PIFFA". PIFFA. https://www.piffapk.com/aboutpiffa.php.
- ↑ "Overview of BIFA". British International Freight Association. https://bifa.org/overview-of-bifa/.
- ↑ "Office of Transportation Intermediaries". U.S. Government. http://www.fmc.gov/bureaus_offices/office_of_transportation_intermediaries.aspx.
- ↑ 49 U.S.C. § 13102
- ↑ "Ocean Transportation Intermediaries". United states Government. http://www.fmc.gov/resources/ocean_transportation_intermediaries.aspx.
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