Freight Forwarding: Duties, Liabilities, and the Role of Forwarders

This report delves into the critical role of freight forwarders in international trade. It begins by explaining the circumstances that lead exporters and importers to utilize freight forwarding services, highlighting how these intermediaries manage the complexities of global shipping. The report outlines the common requirements clients have of freight forwarders, such as providing efficient solutions, offering expert advice, and handling documentation. Furthermore, it details the primary duties of freight forwarders, including advising on export costs, planning shipping routes, contracting cargo space, and preparing necessary documentation. The report also clarifies the accepted liabilities of freight forwarders, covering cargo and legal liabilities, fines, third-party legal liabilities, and error and omission liabilities. The report is a comprehensive overview of the functions and responsibilities of freight forwarders within the global supply chain.

Running head: FREIGHT FORWARDING
Freight forwarding
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Table of Contents
Answer (a).......................................................................................................................................2
Answer (b).......................................................................................................................................3
Reference.........................................................................................................................................6

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Answer (a)
Circumstances lead to exporters and importers using the services of the freight forwarders for
coordinating charge of the goods
Freight forwarding is the service that is used by the entities those deal in the multi-
national or international export and import though the freight forwarder does not move freight
itself actually, it acts as the intermediary among client and different transportation service.
Moving the products from 1 international destination to other may involve the multitude of the
requirements, legalities and carriers. Freight forwarders handle considerable logistics of the task
for its clients and relief the client from the formidable burden. Further, the business affairs or the
trade industry require the entities to implement effective methods for maintaining the desirable
flow of the competitiveness and profits (Huang et al., 2018). Expansion of the market is viable
approach for the purpose of growth that is used by the entities for widening the commercial
territory and for making sales at the higher levels. Further, the increasing demand for the exports
as well as imports all over the globe make the freight forwarder key player in the global
commerce (Poliak et al., 2018). Obviously the entities involved with exports and imports have
particular requirements for the freight forwarders however, below are the most common
requirements from the freight forwarder –
 Freight forwarders provide the importers and exporters with the easier and quicker
solutions to shopping process. The freight forwarders further handles everything
associated with shopping of goods and hence they act as the intermediaries among the
firm and transport company (Archetti & Peirano, 2019).

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 They offer the crucial advice to all the entities regarding the embedded issues in the
freight movement particularly across the international borders. Considering the extensive
expertise, the freight forwarders assure that all the shipping documents are in appropriate
order and all pertinent of the requirements are met. Freight forwarders or the exporters
and importers prepare the special documentation on behalf of consignor, for example the
bill of landing (Gil-Saura, Berenguer-Contri & Ruiz-Molina, 2018).
 Procedure for moving the cargo to the foreign locations can be quite burdensome,
particularly if the exporter or importer is not familiar with the protocol of foreign
exporters. The best option here is to consult the freight forwarder. The professional
freight forwarder have the extensive knowledge regarding transport solution sin the
foreign destinations as they are working in the same industry for long times. They are
also familiar with the foreign regulations and laws associated with the foreign trade. Most
of the freight forwarders in Singapore offer service package for comprehensive logistics
and are licensed by particular regulation bodies (Archetti & Peirano, 2019).
 With various entities operating within freight forwarding industry, selecting right service
provider is quite challenging. Provider of professional service shall provide the timely
and cost effective services (Gil-Saura, Berenguer-Contri & Ruiz-Molina, 2018).
Hence, the exporters and importers require the services of freight forwarders for getting
reliable services, better communication, one stop solutions, competitive rates and good
relationship in working context. For example, freight forwarders handle everything associated
with shopping of goods and hence they act as the intermediaries among the firm and transport
company

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Answer (b)
Primary duties and accepted liabilities of the freight forwarders as the forwarding agent
The terms forwarding agent and freight forwarders are generic terms that encompasses
different specialized profession as the professional. Some of the forwarders provide wide range
of the functions whereas others generally restrict themselves to the particular or specialty
geographical coverage. These different kinds of function are mentioned below. Further, it is
crucial for the traders understanding that the forwarders may act as the principle or agent with
variations in the legal consequences (Popovych, Shyriaieva & Selivanova, 2016). Primary duties
of the freight forwarders are as follows –
 Provide advice regarding export costs including the port expenses, freight cost, consular
fees, insurance costs, special documentation costs and the merchandise costs.
 Planning most appropriate route for the shipment, considering the dangerous or
perishable nature of goods, transit time, cost and safety
 Contracting and making reservation for necessary cargo space on ship, aircraft, truck or
train.
 Contracting or advising the insurance for merchandise transportation on behalf of client
and assistance, if required in case of accident (Savic, 2018).
 Providing advice on most appropriate way for transporting the cargo and carry out
procedures for loading, stowing and packing of the merchandise.
 Presentation and preparation of the trade and transport documents required for the
purpose of import and export including bill of lading, CMR and Airway bill.
 Handling with the customs agents in abroad for assuring that the documents and goods
are complied with the customs regulations (Savic, 2018).

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 Acting as the intermediary in the customs negotiations all over the world for guiding
cargo efficiently.
 Use of the e-commerce, satellite systems and internet technology for allowing real time
tracking for transporting the goods.
 Advising on the legislation that has impacts on the international trade, social and political
situations as well as various other factors that may have impact on goods’ movement
(Savic, 2018).
Accepted liabilities from freight forwarders are as follows –
 Cargo and legal liabilities – any type of physical damage or physical loss to the cargo
during the transit that is caused by negligent act, omission or error will make the
transporter liable for the actions and he might be sued y the client against damage or loss
to the cargo
 Fines and the duty liabilities – claims owing to the unintentional breach of any statutory
regulation or statutory requirements may result into fines or any kind of fiscal charges or
any other type of penalties imposed by any authority shall be borne by freight forwarder
(Jacobs, 2015).
 Third party legal liability – any kind of physical damage or loss to the property of 3rd
party, consequential loss that is legally recoverable, bodily injury arising from operation
of freight forwarder will be claimed as the freight forwarder will be held responsible for
this.
 Error and omission liability – any kind of legal liability arising out of operators of freight
forwarder following any negligent act, omission or error by freight forwarder or

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subcontractor or his agent will make him liable for compensating the loss incurred by
client (Lee, 2017).

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Reference
Archetti, C., & Peirano, L. (2019). Air intermodal freight transportation: the Freight Forwarder
Service Problem. Omega.
Gil-Saura, I., Berenguer-Contri, G., & Ruiz-Molina, E. (2018). Satisfaction and loyalty in B2B
relationships in the freight forwarding industry: adding perceived value and service
quality into equation. Transport, 33(5), 1184-1195.
Huang, G., Xu, X., Song, H., & Lim, H. (2018). Analysis on the Development of International
Freight Forwarding Company-Taking Changbao International Freight Forwarding
(Shanghai) Co., Ltd as an Example. Global Finance Review, 1(1).
Jacobs, A. (2015). The effects of the concentration in the liner shipping industry on the services
provided by ocean freight forwarding companies (Doctoral dissertation).
Lee, E. S. (2017). Managing Inter-firm rivalry dynamics of freight forwarders: The impact of
knowledge and environments.
Poliak, M., Šimurková, P., Jaśkiewicz, M., & Hernandez, S. (2018). Unification Proposal on
Market Access for Freight Forwarding in the European Union. New Trends in Production
Engineering, 1(1), 197-203.
Popovych, P., Shyriaieva, S., & Selivanova, N. (2016). Analysis of the interaction of participants
freight forwarding system. Journal of Sustainable Development of Transport and
Logistics, 1(1), 16-22.
Savic, I. (2018). In Freight Forwarding: Law and Logistics. Zbornik PFZ, 68, 303.