Differences between shipping line and freight forwarder

A shipping line is a company or organisation that owns and operates vessels, responsible for the handling and transporting of cargo aboard their ships. They deal with the cargo from point of origin to destination (port to port), transiting regular routes on fixed schedules aboard their own vessels.

A freight forwarder arranges shipments for individuals and companies, they may also be the carrier themselves. They are often the link between shipper and carrier. Forwarders typically assist shippers across the whole journey to ensure no logistical hiccups occur. They can also provide extra services in the form of advising on packing, completing the necessary paperwork (like bills of lading), providing insurance coverage and custom clearing services.

The main difference between shipping lines and freight forwarders are the types of services offered. A freight forwarder will provide services which are outside the scope of a shipping line. For example, a freight forwarder will often see the cargo through the entire process from door to door. While a shipping line may only be concerned during the process when the cargo is consolidated to the time when the cargo is deconsolidated. Another key difference is a freight forwarder often provides multi-modal transportation options, while a shipping agent will often specialise in a certain mode of transportation, be it via ship, air or land.

Shipping line

- Advantages of booking with shipping line:

+ Booking directly with the source of the sea freight offering can sometimes result in more competitive rates.

+ It could mean your cargo is more likely to obtain space on your desired vessel.

+ Shipping lines are accountable for any loss or damages.

+ The owner of the goods can authorise the shipping line to sign on their behalf to expedite any processes along the way, without the need of the owner to physically be there. However, the degree to which this power is given is often listed out in the agreed contract prior to the shipment.

- Disadvantages of booking with shipping line:

+ You may not always get the best rates as rates are often dependant on volume of bookings.

+ You may have to be tied into fixed term rate contracts that do not take into consideration market fluctuations that can impact rates on a daily basis.

+ A shipping line will carry your cargo at sea but may not provide additional transport services.

+ Using only one carrier means only one set of sailing schedules that may not suit your shipment requirements. Although in recent times this has been counteracted by carrier ‘alliances’ over certain trade lanes.

+ Less likely to have one point of contact for your shipment.

+ They would need a forwarder to organise the movement of more ‘awkward’ / out of gauge cargo

+ Working with a carrier directly means you need to ensure bookings are made on time by your suppliers.

Freight forwarder

- Advantages of using freight forwarders:

+ Forwarders are able to negotiate with shipping lines on behalf of shippers to get a competitive deal and discover the most economical route to take.

+ Global forwarders commit big volumes to shipping lines which can make their rates very competitive.

+ Forwarders complete all documentation on your behalf.

+ Import / Export processes are after complex and time consuming. Outsourcing these responsibilities in the supply chain can save untold time and potential headaches.

+ A freight forwarder will often see the cargo through the entire process from door to door, providing multi-modal transportation options and advising customers along the way.

- Disadvantages of using freight forwarders:

+ As a freight forwarder does not actually move your freight a number of different companies may be looking after your cargo at any one given time.

+ Many shippers cite ‘transparency issues’ for not working with freight forwarders, in regards to sub-contracting third parties to complete the work on their behalf.

+ Some freight forwarders may increase costs along the journey that was not anticipated at the beginning of the shipment.

+ As a freight forwarder does not own the vessels carrying cargo they can often be outranked when it comes to finding space on a vessel.