A freight forwarder is an individual or company that dispatches shipments via asset based carriers and books or arranges space for those shipments. Common carrier types could include waterborne vessels, airplanes, trucks or railroads.
The forwarder takes charge of all the details like getting the goods from the customer's origin to the final consignee destination. These professional services - which include arranging shipment and obtaining and preparing the necessary documents required for the country of destination - are quite extensive.
Forwarders can also provide export quotations, advise on export regulations and assist in other shipping-related services such as packing and labeling, consolidating and containerizing, warehousing and insurance. Fees for these services are generally established charges for the individual documents plus associated costs for expediting the shipment like fax, telephone calls, counselor fees, and others. However, the shipper pays only a portion of the total fees earned by the forwarder. The shipping companies pay a commission for booking their freight, which provides the major portion of the forwarder's income.
On a relative basis, forwarding fees are generally very inexpensive. Since they are mostly set fees, the larger the value of the shipment, the lower the relative cost. In any case, unless the exporter has qualified people to assure the correct documentation and shipping procedures are followed, forwarder fees are generally considered reasonable and of greater value than their cost. Most exporters consider their freight forwarder one of their key resources.