Freight brokers and freight forwarders both play important roles in the movement of cargo. Both work for shippers, such as wholesalers, manufacturers, and other companies that need to have goods transported to different locations. Both serve as the middle intermediary between the seller of a product and the buyer of a product and negotiate rates and arrangements. However their duties differ in a number of ways.
Responsibility for freight
- A freight forwarder holds responsibility for shipments from pickup to delivery
- A freight broker is responsible for arranging the transaction between the shipper and the motor carrier assigned to the load.
Possession of freight
- A freight forwarder (or freight agent) is in physical possession of the cargo and ensures its safe storage and travel until it reaches its destination. A freight forwarder typically owns or leases its own warehouse facilities as part of their supply chain solution for customers.
- A freight broker does not take possession of cargo, but rather makes arrangements for its pickup from the shipper’s facilities for delivery.
- A freight forwarder will prepare and own its own bills of lading. They provide other shipping documents and may also handle customs clearance and documentation for a shipper
- A freight broker typically receives a bill of lading from the shipper; a freight broker does not usually “own” the bill of lading.
- A freight forwarder provides such services above and beyond arranging transportation, such as consolidating smaller shipments and breaking up large shipments when necessary into smaller shipments. These logistics operations require sufficient space and require a large investment.
- A freight broker arranges transportation between the shipper and the motor carrier handling the shippers’ loads. A freight broker can be a one-person business operating out of one’s home office with little capital investment.
Freight brokers and freight forwarders both reach out to motor carriers by listing loads on load boards. The world’s largest free freight-matching load board is FreeFreightSearch. Register today to search for loads by departure location by visiting freefreightsearch.com.