“FREIGHT BROKER VS. FREIGHT FORWARDER: WHAT’S THE DIFFERENCE?
Freight brokers connect shippers and carriers and oversee the movement of goods. Brokers must be registered with the Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) to obtain brokerage rights. However, the broker does not possess the goods. Freight brokers primarily handle shipments from origin and destination points in the United States. While freight brokers can handle international shipments, these shipments are usually in one specific area.
Freight forwarders arrange shipments for their customers and then go a step further. In addition to shipping goods, freight forwarders can also store products for their customers. What’s more, freight forwarders have FMCSA operating rights in interstate or foreign trade. This means they handle international shipments from one country to another or across multiple countries.
Freight forwarders clear the shipment of goods from one country to another, forwarding the goods through the legal requirements of each location. Freight forwarders usually deliver goods according to their own bills of lading. They also offer assembly and integration services. They can book cargo space for customers, usually by contacting the ocean or air freight provider directly, and negotiating shipping rates. Freight forwarding is usually a more specialized job with specific terminology and legal requirements.
What is the difference between a freight broker and a freight forwarder?
Although they are often used interchangeably, the requirements of a freight forwarder are broader than those of a freight broker. Both freight forwarders and freight brokers are vital in the logistics industry. Each year, businesses move approximately $106.2 billion in goods through the United States. Freight forwarders and freight brokers are key players in this complex market, but the specific differences between the two are often misunderstood.
Freight forwarders and brokers both help arrange the logistics of goods, but they take different approaches and serve different segments of the freight industry. Each of them works between the shipper (the person who wants to transport the goods) and the carrier, which is the company that has the equipment and facilities to transport the goods. For those entering the trucking industry and those looking for the right means of transportation, it is important to understand the difference between these two roles.
There are many similarities, and some businesses can act as both freight brokers and freight forwarders. Additionally, some businesses may offer the services of freight brokers, freight forwarders, and carriers. Typically, a company provides all three services if it also owns a vehicle for transporting the goods.”
