Freight Forwarders And Their Role In The United States

What is a Freight Forwarder?

A forwarding agent or freight forwarder is a company or person that specializes in organizing shipments for individuals and corporations. Freight forwarding helps to get large orders from a producer or manufacturer to the final point of distribution which we call the market. 3 Star Logistics can facilitate any freight forwarding that you or your company needs with competitive prices and great customer service. Freight forwarders contact and deal with a carrier in order to facilitate the reliable movement of goods.

Typically, a forwarder is not a carrier but rather an expert in the management of large and small supply chains. Freight forwarders are third party logistics provider and are essentially the “booking agents” of the cargo industry. Forwarders contract with asset based freight carriers to move cargo which ranges from manufacturer and paper goods to agricultural products.

A Freight Forwarders Role In The USA

Freight Forwarders in the U.S. (United States) that handle domestic freight must be registered with the U.S Department of Transportations Federal Motor Carrier Safety Administration. Freight Forwarders are “carriers” who accept freight for transportation and are liable for transporting the freight from origin to destination. This transportation of freight is performed under the freight forwarders own bill of lading.

The legal definition for “Freight Forwarder” can be found under 49 USC 13102 (8) and states, A person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business.

(A) Assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;

(B) Assumes responsibility for the transportation from the place of receipt to the place of destination; and

(C) Uses for any part of the transportation a [surface carrier] carrier subject to jurisdiction [of the Department of Transportation] of under this subtitle.

International ocean freight forwarders which arrange for shipments to and from the U.S. must be licensed by the Federal Maritime Commission as Ocean Transportation Intermediaries. An Ocean Transportation Intermediary is either an ocean freight forwarder or a non-vessel operating common carrier (NVOCC). A non-vessel operating common carrier (NVOCC) is a carrier which provides ocean transportation for businesses or the general public. An NVOCC issues its own bill of ladings or equivalent documents but they do not operate the vessels which transport freight across the oceans. An Ocean freight forwarder is a company or individual within the United States that dispatches shipments or freight from the United States using common carriers. Basically, Ocean freight forwarders arrange space and dispatch shipments on the behalf of shippers. Freight forwarder companies may obtain both of the above licenses and may act in both capacities even on the same shipment. The United States legal distinction between NVOCC and Ocean Transportation Intermediary’s is;

(A) The NVOCC is a transportation company (or carrier) that is physically responsible for the delivery of goods and acts as its own principle.

(B) The Freight Forwarder acts as the Consignee or Shipper of freight.

Companies which act as an Ocean Freight Forwarder do not typically issue their own bill of lading and as an agent they are generally not liable for physical loss or damage to cargo. The exception to this is when the Ocean Freight Forwarder creates errors due to lack of judgment, paperwork or fiduciary responsibility. non-vessel operating common carriers (NVOCC’s) act as the ocean freight carrier and issue their own bill of lading. NVOCC’s are legally responsible for the physicall damage or loss in accordance with the conditions and terms of their bill of lading.