Also known as a non-vessel operating common carrier, a freight forwarder arranges the movement and distribution of merchandise on behalf of persons and companies, from the factory to the final consignee. Freight forwarders play a vital role in the supply chain
process. They submit the necessary proof of financial responsibility and maintain a license with the United States Federal Maritime Commission.
Freight Forwarders contract with a carrier or often multiple carriers to move the goods. They do not move the goods but acts as an expert in the logistics network. These carriers can use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often do utilize multiple modes for a single shipment. For example, the freight forwarder may arrange to have cargo moved from a plant to an airport by trucks, fly to the destination city, then moved from the airport to a customer's building by another truck. This is often referred to as multi-modal transportation. Freight Forwarders handle international shipments and have additional expertise in preparing and processing customs documents and perform other activities pertaining to international shipments.
Forwarders typically review information involving commercial invoice, shipper's export declaration, bill of lading and other documents required by the carrier or country of export, import, and/or transshipment. Much of this information is now processed in a paperless environment. The FIATA shorthand describes Freight Forwarders as the "Architect of Transport," illustrating the commercial position of the forwarder relative to its client. Jupiter SCM maintains a database of freight forwarders with varying levels of expertise.