Changing Role of Freight Forwarder

Freight has been an easy-going industry for forwarders, aiming to transport goods to international markets. The freight forwarding industry blossomed after World War II when the world was being rebuilt. Manufacturers and shippers were needed to take all these goods to market.

However, the companies that manufactured the goods were often not experts in transportation and logistics. Documents were needed to get a port, a ship to help, and to legally, efficiently and safely transfer it to its foreign customers. This was followed by a licensed freight forwarder, who acts as an agent for the shipper of goods.

It is important to recognize that the manufacturer of the goods is not always shipper. Depending on the terms of sale, the shipper may purchase goods from the manufacturer and be responsible for arranging the movement of goods to the customer. Banks are usually heavily involved in these transactions so inland and shipping documents are always important to avoid unnecessary delays and additional costs. There are many vendors involved, and all will require prompt payment. Shippers are not always equipped to handle many duties and will hire a freight forwarder who specializes in these services. 

Typically, freight forwarding industries exist in most developed countries. The first of the European pioneers, in my experience, was the establishment of American offices. He offered the ability of the same forwarder firm on both ends of the transaction. In some cases, large foreign forwards will buy out existing American forwarders, who set up accounts. American forwarders appear to focus on Central and South America to expand their reach. Naturally, there are exceptions.

Forwarders will typically assist the shipper in sea carrier selection based on sailing schedules, service reputation, sea freight rates, and other factors. In some cases, the forwarder will negotiate with the ocean freight rates on behalf of the shipping carrier.

The cargo moving breakbulk required a lot of handling and was subject to much damage or loss. In the case of bulk shipments such as grain, the forwarder was also involved in arranging inspection and sampling of cargo. It is mandatory to take a sample before loading before discharging.

Forwarders will book the space with an ocean carrier and confirm the details of shipping the goods to the carrier facility on the date of delivery of the cargo. A dock order/dock receipt was prepared with all the details of the shipment including overland carrier information, foreign port of discharge and full details of cargo; Including commodity, type of packing, number of packages and dimensions and weights. The measurement of the cargo was still accompanied by breakbulk shipments, which required that many ocean freighters were based on weight or measurement based on the freight optimal rates.

From my personal experience, most measurements in the 1960s were made with a yardstick with a large brass fitting at the first end to hook the cargo end. The dimensions were recorded on a dock receipt which was then provided to the truck driver and sent to the ocean carrier's office for calculation. Counting of the package was also necessary as the quantity is always checked by customs around the world to facilitate any claim of any kind of deficiency. A copy was also sent to the forwarder's office and any measurement disputes between the parties were resolved before loading.

In the 1960s and 1970s, it was all on paper with multiple copies for all parties involved in the transaction. Improvement, especially if a letter of credit was involved, was necessary for the shipper and forwarded to handle with the bank involved without delay and additional costs. If the shipment is handled on an intermodal basis then the original and final destination are shown. Any exceptions to deal with cargo claims such as status issues and other commentary and such comments have been shown on the bill to be rolled out.

 Another important service offered by most Freight Forwarders is the provision of cargo insurance. Most sea bills have a limit of claims. Shippers are required to have cargo insurance in case of loss or damage to goods. It is always important to be aware of the terms of Luding's bill.

In the 1960s and 1970s, shippers often pioneered funds to pay sea freight to make it easier to issue bills. With the advent of electronic banking and credit agreements, this has been changed. Now the possibility of cryptocurrency for all payments may be common if blockchain technology is used. This includes payments to inland carriers and all ancillary providers of services.

With the increasing dominance of containers in the late 20th century, ocean carriers began to offer intermodal rates. This type of shipment allows the ocean carrier to handle the trucking of empty containers to the inland supply point, and the load will return to the container's ocean carrier's port terminal. This eliminated the need for a forwarder to make these arrangements.

The documents are now transmitted electronically, including the filing of the ship's export declaration through the AES system. If the shipper/supplier of cargo has access to this system, they can file directly through Customs and Border Protection, which performs this function for the Census Bureau which is part of the Department of Commerce. There are vendors who offer these services for a fee if the forwarder does not have access to the filing software.

In addition, large online marketers are offering logistics services including forwarding and trucking to streamline shipments and create additional revenue streams to increase profitability. One of them has hinted at the possibility of purchasing ocean vessels, to compete with existing ocean carriers. It is inevitable that these companies will offer bundled services directly to customers.

Project forwarding requires more expertise but is not immune to threats. Container carriers are completing this segment by encouraging manufacturers, engineers, and other teams to configure containers for movement, greater safety, less damage, and easier inland transportation. In recent years, we have seen consolidation in the breakbulk carrier industry, due to the migration of cargo into containers in this project. Breaker but all services involving cargo will always require heavy-lift and oversized cargo.

Many local or regional forwarders have been bought or liquidated by international firms. It even has technology plans to replace ship crews with autonomous ships. Autonomous trucks will deliver containers to computer-driven terminals and load containers onto autonomous ships. Just-in-time shipments are reducing the need for large warehouse facilities, artificial intelligence finding it's way into shipping. Will people always be needed to monitor technology? We certainly hope so.