Shipping & logistics

Freight forwarder

A company that organises transport on the shipper’s behalf: it obtains freight quotes, books space on ships or aircraft, arranges containers, warehousing and trucking, prepares documents and often works together with a customs broker. Forwarders that issue their own bills of lading (house B/L) act as NVOCCs and take on carrier liability. FIATA membership and liability insurance are good indicators when choosing a reliable forwarder.

Related terms

Customs broker

A licensed specialist who prepares customs declarations on behalf of importers and exporters, declares the classification (HS code), value and origin of goods, calculates duties and deals with the customs authorities. In many countries brokers are licensed by the customs administration and share responsibility for the accuracy of declarations. A good broker saves money through regimes such as inward processing, bonded warehousing, preferential origin and anti-dumping planning.

Full container load (FCL) and less than container load (LCL)

With FCL a whole container is dedicated to one shipper’s cargo: it is stuffed and sealed at the factory and opened at the buyer’s warehouse. With LCL small lots from several shippers are consolidated in one container at a consolidator’s warehouse and charged per cubic metre or tonne, whichever is greater. In raw material trade FCL is usually cheaper and safer above roughly 10–15 m³; LCL suits samples and small orders.

Freight (freight rate)

The price paid to the carrier for moving goods. Container freight is priced per box (e.g. USD per 40’HC), bulk freight per tonne (USD/mt), and chartered ships by daily hire (USD/day). Surcharges can be added to the base rate: bunker (BAF), currency (CAF), terminal handling (THC), congestion and war-risk surcharges. Freight markets are volatile and are tracked through indices such as Drewry, Freightos (FBX) and the Baltic Dry Index (BDI).

Explained in the trade handbook

Trade handbook