The Value Proposition Offered by Freight Forwarding
Freight forwarders accumulate their business earnings by combining small volume shipments from different customers to form a sizeable load and use one means of transport t at their disposal for the delivery missions. A convenient location is set where a local operator then delivers single loads to their respective client’s destinations probably. The local operator may be contracted or not, depending on the logistical plans of the freight forwarder.
The reduced charge rate per hundredweight due to bulk shipment is an attraction for those seeking the services of a freight forwarder. Freight forwarders are deemed to deliver their services faster compared to dealing with the common carrier, especially because of the small shipment involved. Freight forwarders ensure efficiency during delivery missions. While freight forwarders are for profit-making and aim at making economic gains from consolidated shipments, shippers’ member associations are in the contrast .
An illustrative case of a shipper association is a group of motorcar dealers who organize for importation from a common country. Since their dealers may not individually make purchases that fill a ship at a go, then they settle for a shipper association. In the association, small shipments for different members are delivered together. In this arrangement, they set an office in the proximity of the port to handle administrative operations for their shipments. An agent is hired to fast truck deliveries from the port of entry to individual dealers by hiring an efficient freight forwarder and at cost-effective rates. Each dealer is billed a proportion of the whole shipment cost based on his/her contribution, although a flat rate per member should be paid.