Freight Forwarding – What Is It? How Is It Different From Transport?
The growing demand for the professional organization of cargo transportation means that more and more companies providing freight forwarding services on the market.
Freight forwarding and transport are two closely related areas. It’s no surprise that they’re often misunderstood, despite the fact that they mean different things. So what are the differences between them?
Transport is the transport of cargo from point A to point B. It can take place by various means – cars , trains , ships and even airplanes .
Forwarding companies, on the other hand, includes not only the transport of goods, but also a number of additional activities that allow you to optimize transport in terms of costs and duration. Thus, the forwarding company services include:
- advice on the selection of appropriate means of transport,
- contact with carriers,
- timely shipment and collection of shipments, as well as their loading, reloading and unloading,
- insurance of transported goods,
- completing all formalities related to transport,
- arranging customs clearance,
- cargo storage (if necessary),
- controlling shipments.
Types of Freight Forwarding
- The material service is profit-driven
- Created with the purpose of being sold.
Freight forwarding companies is one of the departments of transport consisting in organizing the transport of goods , which can be divided into two factors:
- functional, in which we distinguish the function of the carrier and the function of the person ordering the transport service
- commercial, in which the factor concerns the separation of property rights to the transported goods from undertaking the performance of the service and its distribution.
Forwarding companies is an example of a business activity that consists in organizing the transport of goods at the request of an economic entity , which may have the legal form of a legal or natural person.
Division Of Forwarding
- Branch forwarding, in which all work is carried out using one type of means of transport,
- Intermodal forwarding, which involves the work of more than one mode of transport.
Spheres of operation and range of serviced goods:
- public, in which the enterprise provides commercial services on behalf of other business entities,
- own, in which the forwarding is carried out on your own in relation to the goods of your own trade,
The criterion of the nature and scope of the activities performed:
- clean, otherwise proper, deals only with forwarding activities,
- mixed which performs handling and additional activities
Criterion of the type of means carried:
- rail transport concerns the handling of goods transported by rail wagons, in addition to wagons for transporting road sets (huck-pack) and situations in which rail transport is an element of transport using other means of transport (the so-called combined transport ),
- sea enables the handling of shipments on a door-to-door basis, covers a number of activities performed by the forwarder, which result in sending the shipment by sea freight, in all its forms and methods. A sea freight forwarder is a company that offers sea freight services through contracts with sea carriers and seaports. Agreements with port authorities can play an important role in the activity of maritime forwarding. Some of the small shippers specialize in selling port services. They rarely appear directly in front of customers, most of them are subcontractors of freight forwarders,
- air is the actions of a freight forwarder, the purpose of which is to send a shipment by air transport using all available methods and forms. Similar to sea freight, it also enables the handling of shipments on a door-to-door basis,
- car for the transport of goods uses a car or a road set (a tractor with a semi-trailer or a car with a trailer or trailers). The above-mentioned modes of transportation can be listed as follows:
- low-tonnage cars with a load capacity of 1.5 to 7.5 tons;
- medium-tonnage cars with a load capacity of up to 12 tons;
- high-tonnage trains with a capacity of up to 26 tons, although in some countries (including Sweden) there are road trains with a capacity of over 26 tons, which results from the regulations of a given country on the maximum permissible weight of a road train set;
- specialized sets for heavy and oversized transport, the load capacity of which can be up to 200 tons.
Criteria For The place of Performance
Criterion of the place of performance of the service: municipal:
- fairs and exhibitions,
Criterion for the phase of the transport process:
- During the transport of the cargo,
Criterion for the specialization of forwarding activities:
- Freight forwarding companies include all activities necessary for timely, safe and economic shipment of goods, except for the transport itself.
Generally speaking, shipping is the transport of goods. The task seems to be seemingly simple, but it is worth taking into account that nowadays everyone expects almost immediate delivery of the purchased goods. Forwarding companies are thus forced to constantly improve the cargo delivery process to optimize both the delivery time and costs. The quality of the services provided, which includes timeliness and reliability, is also important. Shipping companies are also forced to take care of the transported goods in order to deliver them to customers intact, regardless of the distance and the chosen means of transport.