View source for Freight forwarder

{{Short description|Handles logistics for freight}}
{{Redirect|Forwarding agent|the concept used prior to the modern postal system|Forwarding agent (philately)}}
{{About|freight forwarders|companies that forward mail and parcels but not cargo|Commercial mail receiving agency}}
{{Admiralty law}}

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 [[common carrier|carriers]] (party that transports goods). The carriers may use a variety of shipping modes, including [[ships]], [[airplane]]s, [[truck]]s, and [[railroad]]s, 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. [[International Federation of Freight Forwarders Associations|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]], [[automated export system|shipper's export declaration]], [[bill of lading]] and other documents required by the carrier or country of [[export]], [[International trade|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 transport|rail-freight]], and collection and deliveries around a port. 

==History==
The first international freight forwarders were innkeepers in [[London|London, England]] who held and re-forwarded the personal effects of their hotel guests in the early 1800s.<ref>{{cite book|page=12|title=International Trade in Services Effective Practice and Policy|first=Sarita|last=Jackson|year=2021|isbn=978-1-0003-6969-4|publisher=Taylor & Francis}}</ref> One of the earliest freight forwarders was Thomas Meadows and Co. Ltd., established in 1836.<ref name="Meadows"/> 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 [[steamship]]s. The services were later expanded to cover consultative solutions and handling [[customs]] requirements.<ref name="Meadows">{{cite book|title=How Logistics Facilitate an Efficient Freight Transportation System|year=2013|page=5|publisher=U.S. Government Printing Office}}</ref>

== Definition ==
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 [[common carrier|carriers]].<ref>{{cite web|title=Meaning and Definition of "freight forwarder"|url=https://www.infoplease.com/dictionary/freight-forwarder#ixzz2FhueT97J|publisher=Random House|access-date=8 January 2023|archive-url=https://web.archive.org/web/20210210003838/https://www.infoplease.com/dictionary/freight-forwarder|archive-date=10 February 2021}}</ref><ref>{{cite book |editor1-last=Garner |editor1-first=Bryan A. |title=Black's law dictionary |date=2009 |publisher=West |location=St. Paul, MN |isbn=978-0314199492 |page=738 |edition=9th}}</ref> A carrier is an entity that transports goods for a fee,<ref>{{cite book |last1=Black |first1=Henry Campbell |last2=Garner |first2=Bryan Andrew |title=Black's law dictionary |date=2009 |publisher=West |location=St. Paul, Minn |isbn=978-0314199492 |page=242 |edition=9th}}</ref> and may use a variety of shipping modes, including [[ships]], [[airplane]]s, [[truck]]s, and [[railroad]]s, including multiple modes for a single shipment. 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.<ref>{{cite journal|last1=Huang|first1=Sheng Teng|last2=Bulut|first2=Emrah|last3=Duru|first3=Okan|date=December 2019|title=Service quality evaluation of international freight forwarders: an empirical research in East Asia|journal=Journal of Shipping and Trade|volume=4|issue=1|pages=14|doi=10.1186/s41072-019-0053-6|issn=2364-4575|doi-access=free|hdl=10419/217544|hdl-access=free}}</ref> [[International Federation of Freight Forwarders Associations]] (FIATA) describes a freight forwarder as the "architect of transport".<ref>{{cite report|url=https://unece.org/DAM/trans/doc/2017/itc/Informal_document_No_13_FIATA.pdf|title=International Federation of Freight Forwarders Associations (FIATA)|publisher=United Nations Economic Commission for Europe|access-date=1 December 2023|archive-date=17 September 2023|archive-url=https://web.archive.org/web/20230917153018/https://unece.org/DAM/trans/doc/2017/itc/Informal_document_No_13_FIATA.pdf|url-status=live}}</ref>  

== Functions and responsibilities ==
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.<ref>{{cite book|title=Load, Seal, & Ship|first=Marc|last=Michelmann|page=14|year=1985|publisher=Load, Seal, & Ship}}</ref> 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.<ref>{{cite web|title=Strategic Considerations for Compliance to Incoterms|date=23 October 2021 |publisher=SIPMM Publications|url=https://publication.sipmm.edu.sg/strategic-considerations-for-compliance-to-incoterms/|access-date=5 March 2023|archive-date=3 February 2023|archive-url=https://web.archive.org/web/20230203021301/https://publication.sipmm.edu.sg/strategic-considerations-for-compliance-to-incoterms/|url-status=live}}</ref> Some forwarders may specialize in niche areas such as [[Rail freight transport|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]], [[automated export system|shipper's export declaration]], [[bill of lading]] and other documents required by the carrier or country of [[export]], [[International trade|import]], and/or [[transshipment]].<ref>{{cite web|url=https://www.cafworldwide.com/blog/what-is-freight-forwarding|title=What is freight forwarding?|publisher=CAF|access-date=1 December 2023|archive-date=11 January 2024|archive-url=https://web.archive.org/web/20240111092103/https://www.cafworldwide.com/blog/what-is-freight-forwarding|url-status=live}}</ref> 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.<ref>{{cite report|publisher=DHL|year=2020|title=Basic overview of Incoterms|url=https://www.dhl.com/content/dam/dhl/global/dhl-global-forwarding/documents/pdf/glo-dgf-incoterms-2020-brochure.pdf|access-date=28 April 2020|archive-date=21 April 2020|archive-url=https://web.archive.org/web/20200421104844/https://www.dhl.com/content/dam/dhl/global/dhl-global-forwarding/documents/pdf/glo-dgf-incoterms-2020-brochure.pdf|url-status=live}}</ref>

== Organizations ==
Modern freight forwarding organizations serve as pivotal entities in the facilitation of global trade, orchestrating the movement of goods across international borders. These organizations cater to diverse customers including business-to-business [[B2B e-commerce|(B2B]]), business-to-consumer ([[Direct-to-consumer|B2C]]), and consumer-to-consumer (C2C) requirements.<ref>{{cite journal |last1=Bowen |first1=John |last2=Leinbach |first2=Thomas |date=April 2004 |title=Market Concentration in the Air Freight Forwarding Industry |url=https://onlinelibrary.wiley.com/doi/10.1111/j.0040-747X.2004.t01-1-00299.x |journal=Tijdschrift voor Economische en Sociale Geografie |volume=95 |issue=2 |pages=174–188 |doi=10.1111/j.0040-747X.2004.t01-1-00299.x |issn=0040-747X |access-date=2024-03-05 |archive-date=2023-11-18 |archive-url=https://web.archive.org/web/20231118083444/https://onlinelibrary.wiley.com/doi/10.1111/j.0040-747X.2004.t01-1-00299.x |url-status=live |url-access=subscription }}</ref> These organizations have evolved significantly, transforming from managing a network  of contracted agents to corporations with a direct presence across countries.<ref name="IFF">{{cite web |last1=Riedel |first1=J |last2=T |first2=Chan |last3=Schöndorfer |first3=S |title=The digital imperative in freight forwarding. |url=https://www.aircargoitaly.com/wp-content/uploads/2018/11/BCG-The-Digital-Imperative-in-Freight-Forwarding-Nov-2018_tcm9-207201.pdf |work=Center for Digital Innovation|access-date=1 June 2024}}</ref><ref>{{cite journal |last1=Murphy |first1=Paul R. |last2=Daley |first2=James M. |date=1996 |title=A Preliminary Analysis of the Strategies of International Freight Forwarders |url=https://www.jstor.org/stable/20713285 |journal=Transportation Journal |volume=35 |issue=4 |pages=5–11 |jstor=20713285 |issn=0041-1612}}</ref> These organizations often have presence in multiple countries with larger entities having revenues running into billions of dollars. However, studies have noted a significant presence of small companies as well.<ref>{{cite journal |last1=Murphy |first1=Paul R. |last2=Daley |first2=James M. |date=1 January 2001 |title=Profiling international freight forwarders: an update |url=https://doi.org/10.1108/09600030110389433 |journal=International Journal of Physical Distribution & Logistics Management |volume=31 |issue=3 |pages=152–168 |doi=10.1108/09600030110389433 |issn=0960-0035|url-access=subscription }}</ref> The freight forwarding organizations have also undertaken diversification of revenue streams and has undergone [[digital transformation]]. Digital technologies such as [[barcodes]], [[electronic data interchange]], and [[enterprise resource planning]] have enhanced operational efficiency.<ref>{{cite book |last1=Adeitan |first1=Ayodeji Dennis |last2=Aigbavboa |first2=Clinton |last3=Agbenyeku |first3=Emmanuel Emem-Obong |chapter=Global Logistics in the Era of Industry 4.0 |date=2020 |editor-last=Arai |editor-first=Kohei |editor2-last=Bhatia |editor2-first=Rahul |editor3-last=Kapoor |editor3-first=Supriya |title=Proceedings of the Future Technologies Conference (FTC) 2019 |chapter-url=https://link.springer.com/chapter/10.1007/978-3-030-32523-7_48 |series=Advances in Intelligent Systems and Computing|volume=1070 |location=Cham |publisher=Springer International Publishing |pages=652–660 |doi=10.1007/978-3-030-32523-7_48 |isbn=978-3-030-32523-7}}</ref>

As per a 2023 report, the global freight forwarding market was valued at $201.6 billion in 2021 and is expected to grow at a [[Compound annual growth rate|CAGR]] of 3.9% from 2022 to 2030, reaching $284 billion by 2030.<ref>{{cite web |title=Freight Forwarding Market Size, Trends And Outlook 2032 {{!}} The Brainy Insights |url=https://www.thebrainyinsights.com/report/freight-forwarding-market-13348 |access-date=2024-03-05 |work=The Brainy Insights |archive-date=2024-04-23 |archive-url=https://web.archive.org/web/20240423232712/https://www.thebrainyinsights.com/report/freight-forwarding-market-13348 |url-status=live }}</ref> [[United Parcel Service]], [[DHL Group]], [[FedEx]], [[Maersk]], and [[Deutsche Bahn]] are the largest freight companies by revenue. Cumulatively, the top ten companies generated a revenue of $538.8 billion in 2023.<ref>{{cite web|title=Size of the freight forwarding market worldwide 2021-2031|url=https://www.statista.com/statistics/1066803/freight-forwarding-market-size-worldwide/ |access-date=6 March 2024|work=Statista}}</ref>

== National variations ==
* In [[Australia]], most licensed [[Customs broker|Customs Clearance Agents]] operate under a freight forwarder. The entities are registered with the government with the licenses renewed every three years.<ref>{{cite web|url=https://www.abf.gov.au/licensing/brokers/about|title=About licensing|publisher=Government of Australia|access-date=1 December 2023}}</ref>

* [[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.<ref>{{cite web|url=https://www.ciffa.com/our-association/|title=About our association|publisher=CIFFA|access-date=1 December 2023|archive-date=23 October 2023|archive-url=https://web.archive.org/web/20231023202703/https://www.ciffa.com/our-association/|url-status=live}}</ref>

* Federation of Freight Forwarders’ Associations in India is the apex body and the umbrella body of 28 associations across [[India]] representing 6,500 custom house agents, employing over 110,000 people.<ref>{{cite web|url= https://www.fffai.org/|title=Federation of Freight Forwarders' Associations in India|publisher= FFFAI|access-date=1 December 2023}}</ref>

* With more than 82% of manufactured products being exported, freight forwarders are important contributors to the [[Ireland|Irish]] economy. Associations including the Irish International Freight Association represent the industry through educational and representative roles.<ref>{{cite web|url=http://www.iifa.ie|title=Irish International Freight Association|publisher=IIFA|access-date=1 December 2023}}</ref>

* 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.<ref>{{cite web|url=https://www.tra.go.tz/index.php/clearing-forwading-agents|title=Clearing & Forwarding Agents|publisher=Government of Tanzania|access-date=1 December 2023}}</ref>

* Freight-forwarding in [[Nigeria]] has been in place since the exporting of [[peanut|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.<ref>{{cite book|title=Nigerian Groundnut Exports: Origins and Early Development|first=Jan|last=Hogendorn|year=1978|isbn=978-9-7812-5005-7|publisher=Ahmadu Bello University Press}}</ref>

* 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]].<ref>{{cite web|url=https://www.piffapk.com/aboutpiffa.php|title=About PIFFA|publisher=PIFFA|access-date=1 December 2023}}</ref>

* 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.<ref>{{cite web|publisher=British International Freight Association|url=https://bifa.org/overview-of-bifa/|title=Overview of BIFA|access-date=29 December 2023|archive-date=28 May 2024|archive-url=https://web.archive.org/web/20240528133732/https://bifa.org/overview-of-bifa/|url-status=live}}</ref>

* Companies handling domestic freight in the [[United States]] by road must be registered with the [[United States Department of Transportation|U.S. Department of Transportation's]] [[Federal Motor Carrier Safety Administration]].<ref>{{cite web|url= http://www.fmc.gov/bureaus_offices/office_of_transportation_intermediaries.aspx|title= Office of Transportation Intermediaries|website= Federal Maritime Commission|publisher= U.S. Government|access-date=20 April 2016|archive-url= https://web.archive.org/web/20150328193531/http://www.fmc.gov/bureaus_offices/office_of_transportation_intermediaries.aspx|archive-date= 2015-03-28|url-status= dead}}</ref> Such forwarders are "carriers" who accept freight for transport and are liable for delivering the freight under their own bill of lading.<ref>{{USC|49|13102}}</ref> International ocean freight forwarders arranging for shipments to and from the US must be licensed by the [[Federal Maritime Commission]] as [[Ocean Transportation Intermediary|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.<ref>{{cite web|url= http://www.fmc.gov/resources/ocean_transportation_intermediaries.aspx|title= Ocean Transportation Intermediaries|website= Federal Maritime Commission|publisher= United states Government|access-date= 20 April 2016|archive-date= 30 April 2016|archive-url= https://web.archive.org/web/20160430171922/http://www.fmc.gov/resources/ocean_transportation_intermediaries.aspx|url-status= dead}}</ref>

==  See also ==
* [[Transshipment]]
* [[Logistics]]
* [[Physical inventory]]
* [[Standard trading conditions]]
* [[Supply chain]]

==References==
{{Reflist}}

{{Authority control}}

{{DEFAULTSORT:Freight Forwarder}}
[[Category:Freight transport]]