Freight Forwarder vs Freight Broker: Let’s Compare
Freight Forwarder and Freight Broker might sound the same, but they are different. Trucking companies aren’t the only entities that play an important role. Certain businesses provide what some may call a “middleman”.
Consolidation, transportation, and insurance of a freight fall under the possession of Freight Forwarders. A freight broker never takes possession of the items being shipped. The different roles in responsibility are what separate these two. The responsibility of the freight forwarders is to have statutory freight claims liability. In the case that something goes wrong, they hold the responsibility for the freight.
If you anticipate registering as a freight forwarder or a freight broker, you are required to present the necessary documentation. This will ensure the appropriate responsibility is directed to the specific registration.
Responsibilities of a Freight Broker:
The Freight Broker negotiates deals and handles all paperwork. They have knowledge of registrations and contacts. A broker can usually be seen working from a small office.
A Freight Broker is in charge of:
- Arranging transportation for road, sea, rail with a carrier, on behalf of the shipper consignee, or freight forwarders
- Bring together owners to shipping lines and shipping lines to owners.
- Outsource activities pertaining to transport and insurance
Freight Forwarder Responsibilities
Freight Forwarders:
- Distribution of cargo under instruction from the client
- Negotiate freight rates with shipping lines.
- Booking of cargo with shipping lines as instructed by client
- Prepare and execute a bill of Lading in association with the shipping and negotiation of documentation
- Issue bill of lading if applicable
- May or may not do customs clearance
- May or may not be accredited to customs port, etc. and cannot do customs clearance if not accredited
Certain legal requirements for registration such as carrying cargo, and garaging insurance policies equal to at least the minimum coverage amounts for carriers. In order to become a Freight Forwarder, you must first obtain your FF authority.
How can DOT Operating Authority Help?
DOT Operating Authority can assist you with both Freight Forwarder and Freight Broker authority! We will provide all information regarding your registrations and forms and will do all the filings for you!
