Forwarder or carrier. Who do you need for international cargo transportation?

Introduction

In the modern world, where globalization and international trade play a key role, choosing a reliable partner for the transportation of goods becomes one of the most important aspects of a successful business. This is especially true for companies in Uzbekistan seeking to expand their horizons beyond the country. However, who should you choose for this task: a freight forwarder or a carrier? Each of these options has its own advantages and disadvantages, and choosing between them can significantly impact the efficiency and cost of your supply chain.

The purpose of this article — explain the key differences between freight forwarders and carriers in the context of international transport. We'll look at their job responsibilities, the types of documents they work with, and their responsibilities to the client. This information will help you make informed choices and optimize your logistics strategy.

Basic definitions

What is a carrier?

Carrier — This is a company or individual entrepreneur who is directly involved in the transportation of goods using its own or rented vehicle. In this case, the carrier has complete control over the entire process: from loading the goods onto the platform to unloading them at the destination. They usually have their own fleet, which may include various types of vehicles — from trucks and refrigerators to containers and specialized platforms

What is a freight forwarder?

Forwarder — This is a person or company that organizes the process of transporting cargo, but does not transport it themselves. Forwarders act as intermediaries between the cargo owner and the carrier, selecting the optimal transportation option, preparing all the necessary documents, and monitoring the transportation process. They may not have their own transport, but have a wide network of contacts with various carriers and other participants in the logistics chain.

It is important to note that a freight forwarder may have its own vehicles, but this does not make it a carrier. He remains a forwarder as long as he acts as an intermediary between the cargo owner and the carrier.

Functional responsibilities

Responsibilities of the carrier

1. Cargo Transportation: Directly responsible for transporting cargo from origin to destination.
2. Loading and Unloading: The carrier is usually responsible for the process of loading and unloading the goods onto the vehicle.
3. Cargo security: Ensuring the safety of cargo during transportation, including its insurance if necessary.
4. Legal Compliance: Comply with all transport and customs laws, including obtaining all necessary permits.
5. Monitoring and reporting: Tracking the route and condition of cargo, as well as providing reports to the cargo owner.
6. Own vehicle fleet: Management and maintenance of your own vehicle fleet, if you have one.

Responsibilities of the forwarder

1. Organization of transportation: Selection of the optimal transportation option, including the choice of type of transport and route.
2. Coordination of participants: Communication between the cargo owner and the carrier, as well as other participants in the logistics chain.
3. Document flow: Preparation and execution of all accompanying documents, such as waybills, insurance policies, etc.
4. Monitoring and control: Tracking the status of cargo at all stages of transportation and informing the cargo owner.
5. Insurance and risks: Risk assessment and, if necessary, registration of cargo insurance.
6. Consultation and support: Providing advice on all issues related to transportation and prompt support in case of problems.
7. Financial transactions: Possibility of working with deferred payment, as well as other financial services that can be provided by the forwarder.

Document flow

What documents do carriers use

1. Bill of lading (BW): The main document confirming the fact of transfer of cargo from the sender to the carrier.
2. Waybill: A document that reflects the vehicle’s route and fuel costs.
3. Power of attorney for the driver: Certifies the driver’s right to drive a vehicle and receive cargo.
4. Cargo certificate or passport: Documents confirming the quality and safety of the cargo.
5. Invoice for services: A financial document issued to the customer to pay for transportation services.
6. Certificate of completed work: Confirms the provision of the service and its quality.
7. Contract for the carriage of goods: A legal document that governs the relationship between the carrier and the cargo owner.

What documents do forwarders use

1. Agreement with the customer for the organization of transportation: The main document regulating the relationship between the forwarder and the cargo owner.
2. Application for transportation: Formalizes the cargo owner’s requirements for transportation and is used to select a carrier.
3. Bill of lading (BW): Similar to carriers, but the forwarder acts as an intermediary in its execution.
4. Invoice or UTD (Universal Transfer Document): Used for accounting and payment for services.
5. Forwarding and warehouse receipts: Documents confirming the acceptance and storage of cargo in the warehouse.
6. Order to the forwarder: Certifies the authority of the forwarder to organize transportation.
7. Agreement with the carrier: Regulates the relationship between the forwarder and the carrier if transportation is carried out by a third party.
8. Insurance policy: In case the forwarder insures the cargo.

As you can see, forwarders and carriers use a different set of documents, which reflects their different functional responsibilities in the process of transporting goods. This is an important aspect to consider when choosing a partner for international transport.

Responsibility

Responsibility of the carrier to the client

1. For the safety of the cargo: The carrier is responsible for the safety of the cargo from the moment of its acceptance until the moment of transfer to the recipient.
2. For delivery times: Responsibility for failure to comply with established delivery times, which may entail penalties.
3. For the correct execution of documents: Errors in documents can lead to delays and fines, for which the carrier is also responsible.
4. For legal compliance: Violation of transport and customs laws may result in legal liability.
5. For cargo insurance: If provided for in the contract, the carrier is responsible for cargo insurance.

Responsibility of the forwarder to the client

1. For organizing the entire process: The forwarder is responsible for the entire transportation chain, from the selection of the carrier to the moment of delivery.
2. For document flow: The forwarder is responsible for the correctness and timeliness of execution of all accompanying documents.
3. For insurance and risks: In case this is part of the services of the forwarder, he is responsible for insuring the cargo and other associated risks.
4. For compliance with deadlines: The freight forwarder may also be responsible for delays if this is expressly stated in the contract.
5. For the quality of services of third parties: If the forwarder engages third parties in transportation, he is responsible for their actions and the quality of their work.
6. For financial obligations: In case of non-compliance with the terms of the contract, the forwarder may be financially responsible to the client, including payment of fines and damages.

Both participants in the logistics process are responsible to the client, but this responsibility differs in nature and scope. Understanding these nuances will help you make an informed choice between a carrier and a forwarder for international transport.

Pros and cons of working with a forwarder and carrier

Advantages of working with carriers

• Direct responsibility: The absence of intermediaries simplifies the control process and reduces risks.
• Response speed: If problems arise, the carrier can quickly take action without wasting time on additional approvals.
• Cost savings: The absence of intermediary markups can make transportation costs lower.
• Close relationship: Possibility of building a long-term relationship with the carrier, which can lead to better terms of cooperation.

Disadvantages of working with carriers

• Limited vehicle fleet: The number of vehicles and types of transport may be limited.
• Lack of flexibility: Carriers often specialize in certain routes and types of cargo.
• Risk of non-delivery: In case of technical problems with transport, the carrier may not have a quick replacement solution.
• Tax issues: Some carriers do not work with VAT, which may create additional tax obligations for the client.

Advantages of working with freight forwarders

• Integrated approach: Freight forwarders can offer a full range of logistics services, including insurance, customs clearance, etc.
• Flexibility: The ability to quickly select the desired type of transport and the optimal route.
• Saving time: The forwarder takes care of all the routine of organizing transportation and document flow.
• Minimize risks: Freight forwarders often have well-established relationships with reliable carriers.

Disadvantages of working with freight forwarders

• High cost: Forwarder services include additional surcharges for organizing transportation.
• Difficulty of control: The presence of an intermediary can complicate the control process and increase risks.
• Dependency on third parties: The forwarder cannot always guarantee the quality of services of the carriers with which it cooperates.
• Possible delays: If the forwarder works with several carriers, delays at the coordination and organization stage are possible.

Understanding these pros and cons will help you make an informed choice between a freight forwarder and a carrier, based on the specifics of your business and logistics needs.

How to choose: criteria and recommendations

What factors need to be considered when choosing

1. Type and nature of cargo: Some types of cargo require specialized transport and transportation conditions.
2. Route and Distance: International shipments may require complex route planning and customs clearance.
3. Deadlines and flexibility: It is important to understand how critical deadlines are and whether delays are possible.
4. Budget: The cost of services can vary significantly depending on the option chosen.
5. Reliability and reputation: Check reviews, recommendations and, if possible, cooperation history.

When is it better to choose a carrier

• Simple routes: If transportation is carried out on a well-known and well-developed route.
• Specialty cargo: If the carrier has experience with your type of cargo.
• Control and transparency: If it is important for you to have direct contact with the contractor.
• Savings: If the budget is limited and you are ready to take on some of the organizational issues.

When is it better to choose a forwarder

• Complex routes: If transportation requires complex route planning, including international transport.
• Comprehensive services: If you need a full range of logistics services, including insurance, customs clearance, etc.
• Flexibility: If you need different types of transport or the ability to quickly change routes and schedules.
• Time: If you do not have time to independently manage the entire process and you need a professional approach to organizing transportation.

Conclusion

In the world of international cargo transportation, the choice between a freight forwarder and a carrier can be a key factor in the success of your business. Each of these options has its own advantages and disadvantages, and the right choice can significantly optimize your supply chain.

If you are looking for a reliable partner for organizing international transportation in Uzbekistan, we recommend paying attention to AllCargo.Market. Our platform offers modern solutions for the efficient work of our clients. We provide a full range of services, from choosing the optimal type of transport and route to online monitoring of cargo at each stage of transportation.

By choosing AllCargo Market, you get not just transportation, but a comprehensive logistics solution tailored to your individual needs. Preparation of all necessary documents for the first order with us – free. 

Entrust your cargo transportation to professionals, and you will not regret it.