What is a freight forwarder?

The Federal Highway Administration defines a freight forwarder as a person whose business is to act as an agent on behalf of a shipper. In practice a freight forwarder books space with carriers, prepares or collects the documents, arranges customs clearance through a broker and coordinates the legs from the supplier to the delivery address.

US shipping law calls both kinds ocean transportation intermediaries (OTIs):

• An ocean freight forwarder, in the United States, dispatches shipments via a common carrier, books or arranges the space for shippers and processes the documentation.
• A non-vessel-operating common carrier (NVOCC) is a carrier that does not operate the vessels: it is a shipper to the ocean line and a carrier to you, and issues its own house bill of lading. See bill of lading.

No one in the United States may act as an ocean transportation intermediary without a licence from the Federal Maritime Commission. Each must also show financial responsibility, usually a bond:

• Ocean freight forwarder: $50,000.
• Licensed NVOCC: $75,000.
• NVOCC based outside the US and registered with the FMC: $150,000.

• Look the company up in the FMC’s list of licensed and registered intermediaries.
• Ask who issues the bill of lading, and on what terms.
• Ask whether the price includes customs, duty and delivery, and get it split by leg.
• Ask for its cargo insurance and the limit of its liability.

Carriers and forwarders bid on Ebbrate only after a person has checked their registration, operating licence and insurance, and a sea shipment into the US needs an FMC licence on file. See how it works.