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What is the relationship between international logistics and freight forwarding

Basenton international logistics freight forwarding relationship

Since the intermediary provides the shipper with a lower transportation rate between the two places than if it were directly transported by a public carrier, it has proved economically that their functions are reasonable. Due to the weird practices in the public carrier’s rate structure, such as the lowest freight, surcharges, and less-than-carload rates, non-operational intermediaries have the conditions to provide shippers with money-saving services. When the intermediaries charge higher rates than The situation occurs when the shipper may obtain the rate from other legal carriers: that is, the rationality of higher charges lies in providing the shipper with faster delivery and more complete services. Such intermediaries are mainly freight forwarders, shippers’ associations and brokers.

Basenton international logistics freight forwarding relationship

(1) Freight forwarder
Freight forwarders are profit-oriented industries. They integrate small-batch shipments from various customers into large-batch loads, and then use public carriers (road or air) for transportation. At the destination, the freight forwarder splits the bulk load into smaller shipments. Most deliveries may or may not be included in the service of the freight forwarder.
The main advantage of freight forwarders is that they can obtain lower rates due to large batches of loading. In most cases, they can make small batch shipments faster than the speed experienced by individual customers directly dealing with public carriers. The freight forwarder assumes full responsibility for the completion of the shipment.

(2) Shippers’ Association/Partners/Agents
Shippers’ associations are similar to freight forwarders in their operations. They integrate small batches of loading into large batches to achieve cost-effectiveness. However, shippers’ associations are non-profit entities organized voluntarily. Its members operate in specific industries and they jointly manage the purchase of small shipments. Members usually buy products from public sources or the source of supply is located in a certain area. them
The number of purchase orders is high, but the order quantity is generally small. For example, a department store is often a participant of a shipper’s association because it may need to buy a large number of different products in a certain location, such as the clothing district in New York City. When a group of shippers set up an administrative office in a place that frequently purchases goods (such as New York City), they begin to implement association activities. The office is responsible for arranging individual purchase orders delivered to local facilities. When enough freight volume is accumulated,
The integrated package will be shipped to each member’s facility. As mentioned earlier, certain associations operate their own inter-city transportation and have the legal status of exempting carriers. Each member pays its own part of the shipping costs. Coupled with the fixed costs of the association that are shared proportionally.

(3) Broker
Brokers are middlemen who coordinate transportation arrangements for shippers, consignees and carriers. They also locate the shipment for the free carrier and owner-operator. The broker must obtain a license issued by the ICC, usually as a commission. Before deregulation, their role was small because of various restrictions on their operations. Today, Chunji people can provide a wider range of services.
Such as shipping and stowage, rate negotiation, checkout and tracking management, etc.

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