A freight forwarder can be a crucial partner for shipping supplies and delivering goods to customers. Additionally, an exceptional freight forwarder can be more than just an intermediary between you and the carriers who move your freight.

In this article, we’ll explain:

If you’re not already working with a freight forwarder, this article will help you evaluate potential partners. And if you’re already working with a freight forwarder, this article can help you get more out of your relationship—and secure an even bigger advantage for your business.

What Is a Freight Forwarder, Exactly?

A freight forwarder is a company that arranges shipments on behalf of its customers by working with carriers to move cargo from one place to another.

In the United States, the Federal Motor Carrier Safety Administration oversees freight forwarders. As they define the role:

A freight forwarder organizes shipments for individuals or corporations. Freight forwarders assemble and consolidate shipments and provide for break-bulk and distribution of shipments. Unlike brokers, freight forwarders assume responsibility for the transportation and may transport the freight itself. Therefore, they are involved directly or indirectly with the cargo.


You’ll notice a couple of important distinctions in the FMCSA definition:

  • Freight forwarders assemble consolidations. This involves combining shipments from multiple shippers headed for the same destination into a single load. When they travel by ocean freight, they’re called less-than-container load (LCL)
  • Freight forwarders may also transport freight themselves using their own fleets. Forwarders who own resources like fleets, warehouses, and distribution centers are called asset-based freight forwarders.

Finally, some freight forwarders may also register as non-vessel operating common carriers (NVOCC). Read more about NVOCCs and the advantage they offer.

What Does a Freight Forwarder Do?

Freight forwarders act on behalf of their customers to move freight from one place to another. Freight forwarders provide services that may include:

  • Coordinating ocean, air, or over-the-road freight transportation
  • Simplifying multiple carrier invoices into a single invoice
  • Assisting customers with choosing the right freight modes to improve efficiencies, meet business goals, and control costs
  • Warehousing and storing freight
  • Assembling consolidated/LCL loads to particular destinations
  • Tracking shipments for their customers
  • Assisting with paperwork for international shipments
  • Connecting customers with customs brokers as needed

Each freight forwarder offers a slightly different roster of services. To find a one-stop shop for your needs, you may need to talk to several freight forwarders before you find the perfect partner.


What Are the Advantages of Working with a Freight Forwarder?

Top-level freight forwarders can leverage their logistical expertise, industry experience, and network of partnerships to provide your business with several advantages.


In fact, a close working relationship with a forwarder could help simplify your operations, reduce your shipping expenses, and streamline your supply chain.


Let’s take a look at how that might work:

Advantage #1: Simplifying Charges and Invoices from Carriers

If you’ve ever looked through an invoice from a steamship line, you might find yourself confused by all the ocean freight charges you’ll see. Drayage, wharfage, fuel surcharges, terminal handling fees (and more!) add up—and yet you still might not precisely understand what you’re paying for.


Because these charges don’t always feel transparent, you could miss opportunities for cost savings.


That’s where a freight forwarder comes in.

  • A freight forwarder can simplify the multitude of charges you’d get from a steamship line by walking you through each line item, so you understand exactly what you’re paying for.
  • Additionally, they can help you understand these numbers to uncover potential savings. If the cost of your ocean freight increases due to rising fuel prices, that’s mainly out of your control. However, if different packaging could reduce your freight costs, your forwarder can help you make the changes you need to save on shipping.

Advantage #2: Better Rates on Consolidations and Other Types of Shipments

As a result of the role they play—as well as their logistics expertise—your freight forwarder may be able to help you find lower rates for your shipments.


For example, when it comes to consolidations, freight forwarders look for the right mix of freight to piece together a full container load. In many ways, it’s a little like a puzzle.


If you happen to be the missing piece of that puzzle, your forwarder may be able to offer you a lower rate for your shipment to complete the load and send it on its way.


For example, maybe a forwarder has a relatively heavy load nearly ready to go, but they still have available space—as long as the cargo is on the lighter side. If you’ve got a load of pillows to ship, a forwarder might offer you a good rate to move those pillows in their consolidation.

How to Choose a Forwarder for a Consolidation
  • When it comes to consolidations, look for a forwarder that does a significant volume of business to your destination. Why?
  • Consolidated shipments don’t move until the load is complete. If you’re working with a forwarder with low volume to your destination, you may experience delays waiting for your goods to move.

However, if you choose a freight forwarder with a specialty in a particular destination, it’s much more likely that the consolidation will be completed—and shipped—faster.

Your forwarder can also help you save across shipping modes. Forwarders work with multiple types of carriers—ocean, truck, rail, and air. They can help you spot when a change of mode might save you some money.

For example, many companies sourcing small shipments from China use ocean freight. However, after all of the ocean freight charges on a shipment, air freight and its flat-rate handling fee of $20 might prove the cheaper option. Your forwarder can simplify the math to help you make the right decision.

Advantage #3: Assistance with Paperwork and Customs Clearance on International Shipments

When you’re shipping items internationally—or receiving them from abroad—the import/export requirements and the paperwork can get incredibly tricky. For example, if you try to send chewing gum to Singapore, toothpaste to Algeria, or greeting cards that play music to Saudi Arabia, big trouble could ensue from trying to import these prohibited items.


Additionally, if you’re missing essential paperwork when your shipment arrives in the U.S., you could be responsible for huge fines—or your shipment could be flagged for inspection, which could delay it by weeks.


All this is to say: When it comes to importing and exporting internationally, you need an expert on your side. An experienced freight forwarder can help you understand all the procedures and paperwork you need to make clearance quick and easy.


Additionally, if there’s a problem with an import, experienced freight forwarders have an existing network of customs brokers who can assist in navigating the system. These brokers have deep expertise in customs regulations and procedures. As a result, they can help expedite clearance as necessary.


In other words, with a top-notch freight forwarder as your partner, you’ll reduce a significant amount of hassle on your part and set yourself up for fast customs clearance.

Advantage #4: Improvements in Your Logistics Flow

Finally, a knowledgeable freight forwarder can leverage their logistics expertise to streamline your operations.

A qualified freight forwarder can help you:

  • Spot inefficiencies in your supply chain. For example, many retail companies in Hawaii ship all their supplies to a central warehouse in Oahu before repacking them and reshipping them to neighbor islands. An experienced freight forwarder may be able to create a more efficient solution that sends stock straight to stores on neighbor islands, saving you money on trucking, handling, and storage, as well as reducing shipping times.
  • Create processes that solve business issues, like returns. Accepting returns, while good for customer service, can add significant expenses to your business. An experienced freight forwarder can help you create an efficient logistical solution that moves returns back to your central warehouse efficiently, keeping those costs to a minimum.
  • Establish efficiencies through volume. When you work with a freight forwarder to streamline your entire supply chain, they may also be able to create new efficiencies, like consolidating multiple shipments to reduce overall shipping costs.

Ultimately, these improvements can significantly impact your bottom line by reducing inventory carrying costs, lowering shipping costs, eliminating unneeded warehouse space, and more.


Leveraging the Advantages of Working with a Freight Forwarder

On the most basic level, a freight forwarder acts as an intermediary between you and the various carriers your business uses to move goods and supplies.


However, a freight forwarder can be so much more. An experienced forwarder can be a vital business partner to help you streamline your operations, create new efficiencies, and uncover new ways to reduce the costs associated with your supply chain.


Whether you’re looking for a new partner or you have an existing relationship with a freight forwarder, make sure that you use their wealth of logistics expertise to get all these advantages—and more—from your relationship.


Looking for a partner with the logistics expertise to streamline your supply chain and operations? We can help! Just get in touch with us for a free consultation with one of our experts. They’ll walk through your current operations to help you create new efficiencies and uncover potential cost savings.

Get a Free Quote

  • This field is for validation purposes and should be left unchanged.