A classic forwarding company is a service provider tasked with organising the transport of goods between two locations and all of the associated processes. The term forwarding company is synonymous with the term transport company.
Forwarding companies negotiate the transport price and determine the most reliable, economical and time-effective route. The service of the transport process–from storage to the dispatch of the customers’ goods–is sold by the forwarder to the sender and/or receiver.
In Germany, forwarders use the German Freight Forwarders’ Standard Terms and Conditions (ADSp) as a guideline, which contain legal contract recommendations for the logistics sector.
What are the tasks of a forwarding company?
The forwarding company handles not only the transport itself, but also all of the necessary transport services. The forwarder receives all of the necessary documents and information about the goods from the customer. The forwarder organises or creates all of the other documents relevant for the transport. These are, for example, the waybill, the commercial invoice, the packing list, and much more.
Some forwarders specialise in specific transport goods and have the special vehicles required for the transport. Additionally, countries have lists with prohibited articles, respectively. In air and sea freight as well, there are precise rules pertaining to the transport of specific goods. For example, individual transport permits are required for dangerous goods, medicine, weapons, and perishable goods.
Apart from domestic forwarding companies, there are also many international forwarding companies that specialise in transports across continents. In these so-called intermodal transport chains, such as a combination of sea shipping, transport by truck and air freight, forwarders work together with all kinds of different transport services, such as airlines, shipping companies, etc.
Which additional services do forwarding companies provide?
For some years now, the trend has been for forwarding companies to increasingly act as problem solvers and service providers by providing logistical advice along the entire supply chain. Now, the classic tasks such as transport, transshipment, and storage are supplemented by additional service offers. These include, for example:
- Warehousing & stock management
- Quality control
- Issuing of invoices
- Freight insurance
- Customs export & customs import
What is the advantage of using a forwarding company?
As a customer using a forwarding company, you receive everything from one source, which has various advantages.
Time and cost savings: Apart from saving staff and vehicle costs, the customer can concentrate on their core competencies. Thanks to the bundling of orders, the forwarder not only can charge lower freight prices, but also has a more flexible time schedule and is often faster.
Security: The forwarder is liable for errors that occur while organising the transport.
Professional knowledge: With a forwarding company, you have a professional by your side who gives you advice regarding your possibilities, general rules and the respective legislation, and helps you find the solution that is best for you.