What Are the Roles of the Freight Forwarding Agent?

Freight forwarding agent: recommended the best transportation method

The ultimate goal of a freight forwarding agent is to match the shipper's requirements and the requirements of commercial transactions with various transportation methods in the best possible way. To achieve this goal, a freight forwarding agent must have knowledge about various transportation methods and be familiar with goods and markets. Only in this way can they objectively and impartially make the best choice and combination among the following multiple transportation methods: trailer services, conventional sea freight services, parcel services, roll-on/roll-off transportation services, container consolidation services, and so on.

The economy, speed, and suitability of various transportation methods are different, and each has its own advantages and disadvantages for certain goods. Freight forwarding agents must prioritize the interests of users and strive to minimize transportation costs; while carriers prioritize their own interests and strive for the highest operational profits. In business negotiations, freight forwarding agents must pay attention to this point and find their balance.

Freight forwarding agent: sign a contract with the most suitable carrier

After selecting the transportation method, the next important step is to choose the right carrier. Shipping time, frequency of sending, arrival time, ship and nationality are all crucial factors. After freight forwarding agents determine the actual carrier on behalf of the client, they can sign a contract for booking. When normal transportation routes are affected by strikes, shutdowns, or traffic congestion, agents may change the transportation method at their discretion, which is different from carriers.

In order to successfully complete the task, agents must be familiar with the 1990 ICC Incoterms, such as EXW (ex works), FOB (free on board), CIF (cost, insurance, and freight), and their actual applications in international trade. A good freight forwarding agent must not only understand the requirements of customers and the characteristics of goods, but also use their business knowledge to choose the most suitable trading conditions for customers.

Freight forwarding agent: organize cargo consolidation

With the development of cross-border operations and the trend of "small quantities, multiple types" of freight, sometimes the source and destination ports are very scattered and another transportation method must be used. Sometimes there is no ready-made transportation method available, and special transportation arrangements must be made to consolidate small batches of cargo for container transportation.

Freight forwarding agents organize cargo consolidation and mixed transportation. At this time, their identity is similar to that of carriers or non-vessel operating common carriers (NVOCs), and they can no longer sign bills as agents. When members of the British International Freight Association encounter this situation, they usually issue a FIATA bill of lading, which is acceptable to banks as a full transportation document.