Now you might be asking why people are using freight forwarders versus freight brokers. As we discuss in our freight broker course, there are many different reasons, but as discussed in our freight broker course, some of the examples can be a consolidation of freight, where a freight forwarder is going to pick up different pieces of cargo, such as smaller partial loads, from different shippers. Then they’re going to consolidate them into one larger shipment at their warehouse and hire a truck to deliver this shipment to a final destination. By doing so, they can save money. The same may be done in reverse, where a large shipment will arrive at freight forwarder’s warehouse and then will be broken down into smaller shipments to be delivered by smaller trucks to their final destination.
Another reason can be warehousing. For example, a shipper needs their product to go out of their production facility, but the receiver is not ready to receive it until, let’s say, two weeks later. Again, a freight forwarder may pick up this cargo, store it in their warehouse, and then ship it out to the destination two weeks later.
Freight forwarders offer a bit more complex solutions to their clients. But the main difference is that a freight broker does not take possession of the freight, while a freight forwarder does.