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Differences Between Freight Brokerage Businesses and Freight Forwarding Firms

04 Aug 2014

In the shipping world, there are freight brokerage businesses and there are freight forwarding firms. Many people confuse the two. Many use the terms interchangeably. But if you are in need of someone to ship your products or someone to help arrange shipment of your products, it is essential to know the difference.

A freight brokerage business is a business that arranges to have someone who needs a way to move products to customers and finds an appropriate carrier to move them. A freight broker is extremely knowledgeable in all areas of the transportation business. The freight broker works with a shipper to know the products he needs shipped and if there are any special requirements. The freight broker knows when the products need to be delivered to the customer. And the freight broker knows just how much the shipper is willing to pay to get those products delivered. The freight broker has a vast connection to carriers and can match up the shippers’ needs with a carrier that is able to meet them. Freight brokers are licensed by local, state and federal agencies. The freight broker is the liaison, bringing shipper and carrier together, never actually coming in contact with the products shipped.

A freight forwarding firm operates a warehouse and also acts as a freight shipping agent that will have merchandise moved on to a new location. Freight forwarders need to know import and export rules inside and out. They deal with paperwork, insurance, packing information, costs and must be familiar with many different government regulations. A freight forwarding firm is also responsible for issuing bills of lading for shipping. Because freight forwarding firms deal with national in international shipments, these forwarding firms are licensed by international agencies, the Federal Motor Carrier Safety Administration and the Federal Maritime Association. A freight forwarder is an expert in the shipping business and unlike the freight broker, comes in direct contact with the merchandise frequently repackaging merchandise and may even use its own trucks, trains, boats or planes to transport the products.

These explanations will hopefully solve any confusion between the two different titles. Being a manufacturer or someone with products to ship doesn’t have to be complicated or difficult. Do your homework and contact the appropriate freight company for you. One call and your products will be on their way.