Forwarding Charges Definition: Everything You Need to Know

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Forwarding charges definition is the outlining of the costs of the physical movement of goods between countries (transnational logistics) and, in many cases, the costs of the legal processes of such a movement (customs duties) by clearing and forwarding agents who render such services to exporters and importers.

Technically, forwarding agents and clearing agents are separate entities. However, many entities serve as both clearing and forwarding agents to their clients, especially as the line separating the two functions in the current business world is thin.

Forwarding is the provision made to ensure the safe transportation of a shipment to its target destination. Different countries have different labels for freight forwarders. Some names by which freight forwarders are known are the following:

  • Forwarding agents
  • Clearing agents
  • Customs broker
  • Shipping and forwarding agents
  • Clearing and forwarding agents

Forwarders, in their capacities as consultants, advise and offer several solutions to importers and exporters on how to get the best deals and results in the delivery process. The following are examples of aspects of the delivery process they advise on and help with:

  • They advise on what packaging choices are best.
  • They provide pointers on the best route to take.
  • They advise on the best choice of transportation mode (known as groupage in the freighting industry).
  • They provide guidance on the rules and regulations of the customs.
  • They give advice on the best insurance coverage for the cargo.
  • They help with the documentation of transportation.
  • They help with tracking the progress of the shipment.
  • They also help with processing the letter of credit for banking requirements.

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