The Logistics of Global Trade & CommerceSmooth Flow of Goods & Merchandise
Shipping Logistics | The Role of Service Providers
The Role of Freight Forwarders, Customs Brokers,
Shipping Agent, and Carriers
The logistics of getting the goods delivered to faraway destinations—especially to foreign markets, is a complex business. It requires the services of outside entities to felicitate the task. Quite often, there is confusion as to the role of these service providers; Freight Forwarders, Customs Brokers, Shipping Agent, and Carriers.
The following descriptive information and role definitions is provided to help you understand and distinguish the roles of these services providers a bit better.
Shipping Agents, typically, are – sort of, representatives of the client businesses, whose responsibility is to look after their clients’s interests at the local or foreign port of call.
Customs brokers – normally, provide services to the importers in meeting the destination country’s customs requirements. Customs brokers oversee transactions related to customs entry and admissibility of merchandise, product classification, customs valuation, payment of duties, and taxes, etc.
The carriers are the ones whose job is just to haul / transport the goods—from point A to point B. They don’t provide any other services or handle any paperwork—with the exception of submitting/handing over the provided documentation as part of the shipment transfer.
Freight Forwarders, on the other hand, are the entities that organize shipments for their customers. Typically, freight forwarders are not carriers. As part of their responsibilities – acting as agents of the business/shipper, they contract the freight carriers to facilitate the shipment of goods. The freight carriers, booked by them as part of their services, can be of any type of the haulers— road transporters, trains, airplanes, or ships.
Freight Forwarders, in contrast to the other three single purpose service providers, play a major role in the supply chain management. Its role is more ‘multi-dimensional’ and central to the shipping process. They are more like a ‘self-contained network’ in the supply chain logistics management.
A Freight Forwarder, as part of its normal duty, will review— and advise the customer, the documents including the commercial invoice, shipper’s export declaration, bill of lading, and any other documents required by the carrier, country of export/import, or transshipment ports.
The following excerpt from the US government website dedicated to promoting the ‘Export’ helps define the role of freight forwarders a bit further.
“To comply with export documentation and shipping requirements, many exporters utilize a freight forwarder to act as their shipping agent. The freight forwarder advises and assists its clients on how to move goods most efficiently from one destination to another. A freight forwarder’s extensive knowledge of documentation requirements, regulations, transportation costs and banking practices can ease the exporting process for many companies.” [Quoted from ‘Export.gov’: Taking Your Business Global.]
As a reference point, and for working out the logistics of freight, we have compiled a list of Top Global Freight Forwarders along with the list of Top Regional Freight Forwarders. It can serve as the starting or reference point for working out the logistics of freight.
✍ Please note: There are many more reputed services beside what we have been able to compile here. Investigate them and communicate with them before employing their services.
Also, like all the service providers, none can be a perfect fit for all the needs and all the businesses. Each business has different needs and budgetary constraints that have to be taken into accounts.
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