Freight Forwarder is a Designer
In nowadays international transportation of goods is a complex activity where many players participate in what the customer sees as one service.
This is where the freight forwarder steps in in the role of an architect of the transportation chain by coordinating, monitoring and managing the set of activities, responsibilities and liabilities which at the end result in successful delivery of customer loads.
Imagine a Bulgarian seller has a contract with buyer in Shanghai for delivery of milk analyzers. The contract is on CPT Shanghai airport commercial terms which means that the seller is responsible for delivery of the goods to the airport of Shanghai and undertakes all risks until landing of the goods at the airport. The Seller is based in Pleven some 130 kilometers from the main airport of Bulgaria Sofia and there are no direct flights from Bulgaria to China.
That means that the goods must be delivered to the airport, customs cleared and delivered to the airline for further transportation to Shanghai and the Seller has to contact at least 4 suppliers:
– domestic linehaul carrier – for arranging the pick-up
– customs broker – for customs processing of the freight
– the airline handling agent at the airport – to deliver goods ready for carriage
– the airline cargo office or GSA to arrange the booking of the freight
Well, except for the airline handling and booking the Seller could arrange for local pick-up and customs clearance but in the majority of cases the only thing the Seller should do is to place the order to the Forwarder engaging them with the organization of the whole transportation. Thus Seller, saves time and respectively money and what is very important – headaches with multi-supplier communication and coordination.
All this together with the risks related to the transportation is transfered to the Forwarder, who accepts the order from the Seller to organize the overall transportation and all accompanying activities.
That was a simple example. Now imagine that you have more complicated moves where goods need to be delivered door-to-door with special customs requirements in destination etc.
Can the goods owner do this by themselves? I doubt it.
It is the Forwarder who designs the whole chain coordinating and managing various sub-contractor activities and risks. This is what the main role of the forwarder is – Designer of the transportation chain.