Q.: What is a freight forwarder (forwarder, forwarding agent)?
A.: A freight forwarder, forwarder, or forwarding agent is a person or company that organizes shipments
for individuals or corporations to get goods from the manufacturer/producer/shipper (exporter) to a
market, customer or final point of distribution (importer). They don’t move the cargo themselves. They
act as an intermediary between the client and various transportation services. Shipping goods from one
international origin to another international destination can involve various carriers, requirements and
legalities. They act as an expert in the logistics network, and, for this, they can use a variety of shipping
modes (ships, airplanes, trucks, railroad).
They also have additional expertise in preparing and processing customs and other documentation and
performing activities pertaining to international shipments.
“An international freight forwarder is an agent for the exporter and can move cargo from “dock-to-
door,” providing several significant services such as:
- Advising on exporting costs including freight costs, port charges, consular fees.
- Preparing and filing required export documentation such as the bill of lading and routing.
- Advising on the most appropriate mode of cargo transport and making arrangements to pack.
- Reserving the necessary cargo space on a vessel, aircraft, train, or truck.
- Making arrangements with overseas customs brokers to ensure that the goods
Export freight forwarders are licensed by the International Air Transport Association (IATA) to handle
airfreight and the Federal Maritime Commission to handle ocean freight.” (US Dept of Commerce)
special documentation, insurance costs and freight handling fees;appropriate documents to the seller, the buyer or a paying bank;and load the cargo;documents comply with customs regulations.
Q.: What is INCOTERMS?
A.: INCOTERMS stands for INternational COmmercial TERMS.
For business terminology to be effective, phrases must mean the same thing throughout the industry.
That is why the International Chamber of Commerce created "INCOTERMS" in 1936. INCOTERMS are
designed to create a bridge between different members of the industry by acting as a uniform language
they can use. They were created primarily for people inside the world of global trade.
Each INCOTERM refers to a type of agreement for the purchase and shipping of goods internationally.
Q.: Why are the shipping rates so volatile?
A.: There are several factors involved in this matter. The most common are:
- Market scenario/demand and peak season surcharge;
- Another important factor is the fuel rates (bunker fuel factor), a floating surcharge that the carriers can
change when oil prices rise or fall.
- Government regulations and unions: terminal costs rise, especially with unions, congestions problems,
terminal insurance. U.S. rail costs can increase for the same reasons.
- Network from source to destination;
- Trade lines between origin and destination;
- Competition inside of this business/industry.
Q.: What are the common methods for a shipment payment?
A.: Payments can be done with a company check, a wire transfer or credit card (subject to
administrative fee). Payment has to be made before the cargo is due to arrive, clear customs and be
Q.: Can I get a credit with your company?
A.: Yes, you can. You will need to apply for a credit, filling out a credit application, which we would send
to you, providing all necessary banking and references information. After your credit is approved, you
would be granted the appropriate credit amount and length of time.
Q.: What can be done to prevent delays and ensure a smooth process of the shipment?
A.: The most important thing is to have all necessary documents prepared correctly (packing list,
commercial invoice, original bill of lading, and in timely manner. So, that all documents are prepared
and provided at least one week before cargo arrives at destination. In this way everything can be
process through customs ahead of schedule of the arrival. One factor that can slow the process down is
when there are discrepancies between the shipper/supplier and the consignee/buyer.
Q.: Can you provide any advices for shipments?
A.: There are some important advices/tips for shipments, general speaking:
- Prepare the cargo to be loaded into the container in less than two hours, to avoid overtime charges.
Normally the first two hours are free.
- Extremes: there could be wild swings in temperature and humidity inside the containers, as they are
subject to triple digit heat and humidity to sub-zero temperatures while in storage and/or in transport.
- Properly insure your cargo: we suggest that all cargo be insured. The insurance of the cargo during its
transportation is something important for the necessary security, ensuring any loss or damage in the
- Understand the freight forwarding business: many companies are involved in moving your cargo into
containers, like: trucking companies moving cargo from origin to the port/train yard; cane operations
transferring container from truck to train, and train to ship… and the reverse happens on the other side
at destination. It’s really a good ride, even in good weather.
Q.: Do you have a company at destination that can help us?
A.: Yes. Along with our own infrastructure in the USA, we have a solid and extensive network of
international partners/agents around the world. They are chosen based on their reliability and ability to
meet the demands of each customer: customs clearance, cargo storage or delivery.
SOME AIR CARGO SHIPMENTS FAQ
Q.: Does the size and weight matter for air shipment?
A.: Yes, the air freight is based on both the actual weight and/or size of the cargo. A commonly question
arises here, whether actual weight or chargeable weight? In air shipment, an air freight charge is
calculated on the basis of actual weight or volume weight, whichever is higher. Then what is volume
weight? How to find volume weight?
Chargeable weight is an equilibrium point where in actual weight and volume of the cargo balance. The
chargeable weight is simple to understand: if a shipper exports cotton, the actual weight of cotton is
very low, but occupies a good amount of space as a volume. In this case, if air freight is charged on the
basis of actual weight of cargo, the said shipper needs to pay a very nominal air freight compared to a
shipper who exports iron plates. This is the importance of volume weight by considering volume of
cargo and actual weight of cargo at an equilibrium point. That’s why air carriers charge air freight on the
basis of volume weight or actual gross weight, whichever is higher.
Q.: What is the maximum size or weight?
A.: This varies depending on the airline/aircraft. As a rule of thumb, maximum normal cargo dimensions:
120x80x60 inches. As the weight and size increase, so will the cost.
Q.: What are the destination charges?
A.: There may be airport fees, warehouse fees, custom clearance charges, duty/tax and door delivery.
And, of course, if your cargo is chosen for custom exam at destination, additional charges and delay
Q.: What is “known” and “unknown” shipper?
A.: For more than ten year the Aviation Authorities in the USA have implemented very strict security
regulations covering export airfreight. Part of these regulations include shippers becoming “registered”
or “known” before their export cargo could be accepted in to freight forwarders air consolidation units,
tendered to the airlines and shipped out on passenger aircraft.
Air freight from shippers who are not “registered” or “known” (= “unknown”) can only leave the United
States on freighter aircraft. In this case, rate structure is normally more expensive, and the transit time
could be longer due less regular flights and transshipment through other airports.
The authorities policing this matter in the USA are very strict and stringently apply the law. The
consequences of trying to cut corners are dramatic and very final, subject to civil penalties and fines
Q.: Does my cargo need to be screened for air shipment?
A.: Yes. The Department of Homeland Security/Transportation Security Administration (TSA)
determined that 100% of all air cargo be subject to physical screening (screened at the piece level prior
to its transportation).
In accordance with TSA regulations, the shipper/exporter must authorize the Freight Forwarder consent
of screen/search the cargo, in writing and in the shipper/exporter’s letterhead. The Freight Forwarder
must refuse to offer a cargo transportation by air (passenger or freighter aircrafts) should the
shipper/export not consent to have its cargo screened per TSA regulations.