Freight Forwarder vs Freight Broker—What’s the Difference?

Although they’re often used interchangeably, a freight forwarder’s requirements are more extensive than a freight broker’s. Freight forwarders and freight brokers are each vital in the logistics industry. Each year, businesses move approximately $106.2 billion in freight through the United States. Freight forwarders and freight brokers are key players within this complex market, but the concrete differences between the two are often misunderstood. 

Both forwarders and brokers help arrange the logistics of cargo, but they do so by different methods and serve different niches in the freight industry. They each work between the shipper, which is the person who wants to transport the goods, and the carrier, which is the company that has the equipment and facilities to transport the freight. It’s important for people entering the freight industry and those searching for the right transportation options to learn the difference between the two roles. 

With many similarities, there are some businesses that may operate as both freight broker and a freight forwarder. Furthermore, some businesses may provide the services of a freight broker, forwarder, and carrier. Normally, companies offer all three services if they also own the vehicles used to transport the goods. 

Freight brokers have limited functionalities compared to freight forwarders. Shippers outsource freight brokers to work with third-party companies to help coordinate and negotiate the timeline and way of transportation. Goods are transported via trains, boats, trucks, and airplanes, so it’s also the broker’s responsibility to decide how the cargo is shipped. 

While freight forwarders arrange the physical transportation of the products, they don’t own the vehicles or other shipping equipment and they don’t take possession of the freight. Essentially, the main responsibility of a freight broker is getting the equipment from one destination to another. They don’t prepare paperwork for clients and don’t ship goods under their own bills of lading. Other services like breakbulk, consolidation, and packaging aren’t provided by the broker either.

Freight forwarders have a more active role in the preparation and shipment of cargo, so they share a few similarities with the broker. Like freight brokers, forwarders arrange the means of transportation for the shipper’s cargo through third parties. Therefore, also like brokers, forwarders don’t usually own the carrier’s assets such as trucks and shipping equipment. 

Freight forwarders also perform a wide range of services for clients that brokers do not, like packaging services, providing warehouse space for goods, and customs document preparation.

In addition to preparing customs paperwork, freight forwarders may also ship products under their own bills of lading called house bills of lading or HBLs. Forwarders often use their own fleet of containers to prepare cargo for shipment as well.

? Let FW Logistics find the perfect one for you. Partner With Us

Third-party logistics or 3PL services are created to make shippers’ obligations less stressful. 3PL companies provide dependable resources to those that outsource logistics solutions. FW Logistics has a convenient management system for 3PL that allows you to store and move your products with our facilities and state-of-the-art equipment, all of which are managed by our knowledgeable and experienced industry professionals. Plus, we’re ranked in the top 100 3PL Logistics Companies in the United States.

FW Logistics works to find the right solution for your business. Logistics is a competitive and fast-paced industry. We pinpoint the most cost-effective and reliable solutions for you and schedule the services according to your convenience. Finding the right freight broker takes time and patience, but our experts are here to help you streamline the process.

We are a dynamic logistics company that meets your supply chain needs. We’ve grown exponentially within the industry since 1949, but we pride ourselves on still providing customized services to each of our clients. Our list of solutions includes warehousing, fulfillment, logistics, and trucking. Partner with FW Logistics for dependability and expertise.