What You Need to Know About Freight Forwarders vs. Brokers

What You Need to Know About Freight Forwarders vs. Brokers

The freight industry in the USA has understandably had a rocky road in 2020. While demand for international shipping and rail freighting has dropped, an e-commerce boom has led to a rise in trucking.

People often use the terms freight forwarder vs broker interchangeably. That’s incorrect. These two types of companies offer quite different services.

Read this quick overview of the benefits of broker vs freight forwarder. You’ll come away with a clear understanding of the differences between these goods transport service providers.

Both Move Goods From One Place to Another

The main aspect that a freight broker and freight forwarder have in common is that they both move goods, or freight, from one place to another. The goods could include anything from furniture to electronics to frozen food.

Freight service companies do this by using a variety of transport services, including ships, airplanes, and trucks.

While freight forwarders might own all or a part of the transport service they use, brokers act as an agent for companies wishing to move products. They contact the transport companies, coordinate the shipping, and handle customs clearance.

Both register with the Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA).

Freight Brokers Don’t Store Goods

Freight brokers might be a company or a private individual.

They are licensed by the US Customs and Border Protection (CBP) to assist importer-exporters. Anyone who is bringing goods in and out of the country or across the state lines needs a broker to help them meet local and federal government border control requirements.

They don’t collect freight or deal with the shipping of goods directly. Instead, they take care of all that pesky paperwork. Their area of expertise lies in helping companies to pay the necessary duties and taxes, meet entry or exit procedures, and correctly classify and value their cargo.

Freight Forwarders Also Take Care of Warehousing

If you’re an importer looking for someone to take care of your shipment coming from overseas, it’s best to reach out to a freight forwarding company. These transport experts are an essential part of the supply chain for all kinds of companies and brands.

You can think of them as a travel agent for cargo. 

From the minute the cargo leaves its overseas port to the moment it arrives in the USA, a freight forwarder is there. They take care of the necessary paperwork and permits and arrange all the transport needed to get the goods from point A to point B.

When it comes to custom broker vs freight forwarder, most freight forwarders also either have warehouses. Or they have a partnership with a warehousing company. Often they have warehouses in more than one city, close to ports or large customer bases.

Freight Forwarder vs Broker: International vs the USA

The difference between freight broker and freight forwarder is that the latter operates on an international scale. They move cargo from its point of origin in one country to the country where it will be sold or used in manufacturing.

In the case of this ocean freight shipping company, for example, they offer the full package, from customs clearance, warehousing, right across the Americas. They offer full container shipping and a variety of smaller sizes and even pick up from location to port.

Brokers register in the country of the port where the cargo is being imported rather than its country of origin.

Experience in the Industry Is the Gold Standard

Are you confused by the freight forwarder vs broker differences, and not sure which you need? 

Because so many freight forwarders also offer broker services as part of an all-encompassing package, you can streamline this process. No matter which route you choose, shipping logistics are notoriously complicated. Always go with a company that has a proven track record.

Looking for more insider tips and tricks for the world of business? Browse our blog for informative articles.