The terms may seem the same, but a freight forwarder and a freight broker do serve different purposes.
At the top level, the core component of what a forwarder or broker does is manage the shipments between a shipper and a carrier.
When discussing the movement of goods, some assume the terms “freight forwarder” and “freight broker” can be used to refer to the same thing.
This couldn’t be further from the truth as, beyond their simple semantics, there are very practical differences between the two.
Freight Broker Definition
Freight brokers oversee the movement of freight by connecting the appropriate shippers and carriers.
Brokers must be registered with the Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) for brokerage authority.
But brokers don’t necessarily take possession of the freight. Freight brokers primarily handle shipments with U.S.-based originations and destinations.
While a freight broker can have the ability to handle international movements, those movements are usually in one specific area of expertise.
Freight Broker vs Customs Broker
According to the US’ Department of Homeland Security:
“Customs brokers are private individuals, partnerships, associations or corporations licensed, regulated and empowered by U.S. Customs and Border Protection (CBP) to assist importers and exporters in meeting Federal requirements governing imports and exports. Brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service.”
Further, customs brokers submit necessary information and appropriate payments to CBP on behalf of their clients and charge them a fee for this service.
In short, a freight broker is an intermediary between a shipper and freight service provider within a country’s borders.
Whereas a customs broker is the intermediary between an importer, or exporter, and a government’s customs department in the country of destination.
Freight Forwarder Definition
Freight forwarders not only coordinate the shipping of freight for their customers, but can also serve the logistical needs for warehousing their products.
More importantly, freight forwarders can handle international shipments moving from country to country through their foreign commerce operating authority provided by the FMCSA.
To put a finer point on it, a freight forwarders clear the movement of freight from one country to another, navigating or “forwarding” shipments through the many legal requirements in each location.
Freight forwarders will typically ship freight under their own bills of lading. Additionally, they also provide assembly and consolidation services.
They can book cargo space for customers, often directly with the ocean or air provider, and negotiate rates for transport.
The Difference Between A Freight Forwarder and Freight Broker
The main difference between freight brokerage and freight forwarding is that a freight forwarder can take possession of the freight, often to consolidate multiple types of freight, whereas a broker does not.
Therefor, forwarding offers a larger, more encompassing scope of services with specific terminologies and legal requirements.
A freight broker is a service that connects a shipper and freight service provider within the country – often specializing in a certain type of freight transportation such as equipment hauling.
In contrast, freight forwarder is a company that organizes shipments, often internationally, for companies and manufacturers to get their goods from initial production to final point of distribution.
Trust Brimich Logistics To Move Your Goods
Whether you need to move your freight across the country or around the world, Brimich Logistics has the expertise to handle all your freight brokerage, freight-forwarding, and logistical needs.