A freight forwarder organises the transport of goods on behalf of a company, without driving or sailing itself. It takes over and coordinates the work of shipping lines, hauliers, customs and terminals. The client gets one point of contact for the whole shipment.
Still, the meaning of freight forwarder is unclear to many companies. People who hear that a business is a forwarder often picture a trucking company with its own fleet. That is rarely the case. This article explains what a freight forwarder does, how it works in practice, and what can go wrong when you arrange everything yourself.
What is a freight forwarder?
A freight forwarder is a link in the supply chain that takes over and centralises the tasks of the other links. It books ocean freight with the shipping line, arranges transport to and from the port, has the goods cleared through customs and handles delivery. The client deals with one contact for all of it.
Under Belgian law, a forwarder is a commission agent (in Dutch: commissionair-expediteur). It concludes the necessary contracts on behalf of its client, but is not a carrier itself. The forwarder organises. The shipping line sails and the haulier drives.
Does a freight forwarder own trucks?
Usually not. It is the most common misunderstanding about the job. A traditional forwarder works with a network of hauliers, shipping lines, airlines and warehouses, and picks the right partner for each shipment.
Some forwarders do run their own trucks or warehouses. They then move towards being a 3PL (third party logistics) provider, which also handles storage, order picking and distribution. The line is not always sharp. The core of forwarding is coordination: organising transport, not performing it.
Having no fleet is often an advantage for the client. A haulier with its own trucks works with whatever is in the yard that day. A forwarder that gets a last-minute request and hears no from one partner simply calls the next. It is not tied to one type of equipment or one schedule.
What does a freight forwarder do in practice?
Take an import from China, a route many SMEs know well. A company orders goods from a supplier in China. Without a forwarder, it has to find partners in China, at sea and in Europe, and make them work together. With a forwarder, it goes like this:
- The forwarder arranges collection from the supplier in China.
- It organises transport to the port of loading.
- It books ocean freight, as a full container (FCL) or as part of a shared container (LCL).
- On arrival in Antwerp or Rotterdam, it handles import procedures and customs clearance.
- A truck delivers the goods to the client.
Each step has its own parties, documents and deadlines. The forwarder keeps them together. Read more about this route in our article on importing from China. Not sure whether you need a full container or a shared one? See FCL vs LCL.
What can go wrong when you arrange it yourself?
Many importers want to keep costs down and arrange transport themselves. That is possible, but the final bill is often higher than a forwarder's original quote.
A customs clearance error is the classic example. The container is in port but cannot leave the terminal because the customs declaration is wrong. Transport is already booked and the truck is waiting. The importer then pays dead freight to the haulier, while demurrage keeps running with the shipping line. Our article on demurrage and detention in Antwerp shows how fast those costs add up.
On top of that come customs fines for incorrect or incomplete declarations. And there are local port charges that people often miss when they book themselves.
Other importers choose an Incoterm where the supplier arranges transport, to avoid the hassle. Under CIF, the seller pays ocean freight to the port of destination. Everything after that, such as local charges, customs clearance and delivery to your warehouse, is on you. That often costs more than using a forwarder. To pick the right delivery term, read Incoterms 2020 explained.
When should you use a freight forwarder?
A forwarder adds the most value when a shipment has several links. Typical situations:
- your first import or export outside the EU, with a customs declaration
- a supplier selling EXW or FOB, which leaves the main transport to you
- containers arriving in port that need to reach your warehouse
- urgent shipments, with no time to find partners yourself
- shipments with special requirements, such as out-of-gauge cargo or dangerous goods
The more parties, documents and borders a shipment involves, the more coordination a forwarder takes off your hands.
Why do freight forwarders sometimes have a bad name?
Forwarders don't always have a good reputation. Many companies see them as middlemen who earn money on other people's work. Even in an international trade course, we recently heard that forwarders make up costs and surcharges.
That is not true. The surcharges on a forwarder's invoice come from the shipping line, the terminal or the port. A company working without a forwarder pays the same costs. The forwarder passes them on and charges a fee for its own work: booking, follow-up, documents and customs. That is work the client would otherwise do itself.
What does damage the industry's name are quotes that look low and get topped up with extra costs afterwards. So always ask for a quote covering the full chain, and ask which costs could still be added.
Is a freight forwarder always cheaper?
Not always, for a single link, you may sometimes find a lower price. The advantage lies elsewhere: you know upfront where you stand. The quote covers the whole chain, from collection to delivery.
Nothing in logistics is guaranteed. A vessel can be delayed, a container can be inspected by customs. A good forwarder says so honestly and works to keep costs down when things do go wrong.
Every forwarder also has its niche. One is strong in air freight, another in abnormal loads or in ocean freight from Asia. So feel free to ask about experience with your type of shipment.
A freight forwarder near the Port of Antwerp
PLS is a freight forwarder based in Sint-Job-in-'t-Goor, near the Port of Antwerp. We work exclusively as a commission agent, with dozens of vetted hauliers and partners we have worked with for years. We arrange sea freight via Antwerp, air freight, road transport and customs formalities, with one fixed contact per file.
Want to know what a forwarder can do for your shipment? Get in touch.