Difference Between Freight Forwarder and Brokers

Freight Forwarder vs Brokers

Both the broker and the freight forwarder are the middlemen for business transactions. They are both responsible for transactions between a buyer and a seller or between two companies who have businesses between each other. Even though both are for business transactions, there are four significant differences between each other. These two terms must not be used interchangeably. The main difference between the two is the responsibility they have in the business being made. The freight forwarder is responsible for the shipments while the broker is responsible for organizing the transaction between the two parties doing business between each other.

A freight forwarder is also known as a forwarding agent. This person is someone who takes care of the shipments of certain business transactions. The forwarder can also be the carrier of an individual or a company doing a business deal. The forwarder can be the agent, or the forwarder can be just a third party from the business deal. The forwarder is someone who is responsible for the bookings of shipment spaces for the transport of cargoes through ships, planes, trucks, or trains.

The broker, on the other hand, is a third party who is responsible for the transactions of two parties. They are the middlemen for the buyer or the seller. These buyers and sellers may be individuals or companies. The broker gets a commission for every successful transaction he or she has done. When a broker acts as a middleman, he or she becomes a principal, or someone acting on behalf of the buyer or seller.

One type of a forwarder is the international freight forwarders. These forwarders are responsible for the documentation and shipment of cargoes throughout the international area. They also take care of all the processes and other related activities on international shipments of business transactions. Some of the information an international freight forwarder takes care of are: commercial invoices, bills of lading, shipper’s export declarations, and other kinds of documents needed in shipping cargo. Papers are not needed for this transaction anymore these days.

One type of broker is the customs broker. This is someone who is responsible for clearing products and goods through the customs barrier when shipped internationally. These brokers are the ones communicating between the owners of the goods and the government. These brokers must know all about the tariff schedules and other regulations of the government agencies concerning the customs of a certain area. The customs broker is the one responsible for the papers and other transactions of shipped goods through the custom agencies of countries where the goods are being shipped.

SUMMARY:

1.The freight forwarder is the one responsible for the shipping of goods and products of business deal transports while the broker is someone who is responsible for the transactions and other activities related to selling and buying products from two different parties.

2.One example of a forwarder is the international freight forwarder while an example of a broker is a customs broker.

3.An international freight forwarder is responsible for the shipment of goods internationally while a customs broker is the one doing the transactions for transporting goods through customs barriers.

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