The difference between a shipping company and a freight forwarder
Do I need a Shipping Company or a Freight Forwarder?
It’s really common to see people confused about the concept of freight forwarders and Shipping companies, especially if you never had to deal with international logistics before.
Freight Forwarders and Shipping Companies are two very important parts of global logistics but they are not in charge of the same tasks, so let’s see the real difference:
Freight Forwarder: Is a person or company that acts on behalf of either the seller or buyer (the person or company that wants to move something from one country to another). The Freight Forwarder can arrange every detail of the transportation process (packing, warehousing, distribution, insurance and much more), but he don’t perform the transportation.
Shipping Company: We can say that the Shipping Company is the one who owns the ship, is the responsible for taking the cargo from one port to another.
In other words, we can say that the Freight Forwarder takes care of everything before and after the cargo moving and the Shipping Company has the responsibility of moving the cargo.
Freight Forwarders (FF) and shipping companies focus on delivering cargo—usually commercial—from one point to another and typically work closely with each other. The main difference between them though, lies in the way in which they function.
A FF is a company that operates by receiving consignments on behalf of other companies and then ships them to the desired destinations. It can choose which mode of transportation to use be it sea, rail or road.
Cargo Shipping lines are carriers that travel through the world’s seas and oceans to carry cargo from one port to another. This is how they handle international trade.
In this post we will discuss the key differences between these two transportation services.
Ownership of the Vessels
A freight forwarder doesn’t own shipping vessels or carriers and instead works by sub-leasing space in a ship to carry cargo or containers. This means that a FF acts as the intermediary between business owners and professional shipping lines.
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Forwarders may consolidate multiple clients’ shipments into one container for affordable shipping services.
Air freight forwarders operate much the same way. Some forwarding companies like CSI even assist clients in cargo documentation requirements and custom clearance for air freight.
When it comes to most shipping companies, they typically own and operate the mode of transport such as ships or trucks.
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