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