Difference between a Freight Forwarder and Broker

Difference between a Freight Forwarder and Broker

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) although they are not an NVOCC
  • arrange transportation of the cargo from/to the customers’ premises and port
  • have a thorough knowledge of over border cargo movement
  • MAY or MAY NOT also do Customs Clearance
  • may or may not be accredited to customs, port etc and cannot do customs clearance if not accredited
  • acts as a carrier in cases where they issue house bill of lading

Example of a traditional freight forwarder maybe DHL Global, Kuehne & Nagel

A Freight Broker is someone who

  • Arranges transportation whether road, rail or sea with a carrier, either on behalf of the shipper, consignee or freight forwarder..
  • Connects cargo owners to shipping lines and vice versa and works on a commission basis..
  • Outsources all the activities associated with the transportation such as transport, insurance and does not handle the cargo themselves..
  • Brokers generally do not own their own bills of lading like some Freight Forwarders may do..

Example of a traditional broker maybe Clarksons


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12 thoughts on “Difference between a Freight Forwarder and Broker”

  1. While the differences between the two may not be as widely known, it’s important for anyone in the logistics industry to understand why you prefer to deal with a Freight Forwarder vs. a broker.

    Reply
  2. Hi, It would be great that all your “difference between” articles have examples, so then we can have a clearer picture of the concepts and differences.

    could you provide one example of this one?

    thanks
    Alfredo

    Reply
  3. How do we get register as Freight Broker? Is it practical in Sri Lanka? where we can get the information about this?

    Reply
  4. Will someone please advise the police that drugs are
    exported from South America NOT imported into that
    zone, the contineous seal check’s for South American
    containers for exports are becoming very disruptive and costly, especially when the exporter is a approved exporter
    and the packing depot as well

    Reply
  5. In terms of the FOB – Customs Value / Transactional Value, which of these services is considered to be deductible from the price paid of the goods?

    Surely SARS – Customs would be of the opinion that only the actual cost of the freight is deductible and not any other profits by any party?

    Reply

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