Intermediaries

All shippers, from the very largest to the smallest, will likely need to form relationships with one or more intermediaries. For one thing, just about all air cargo moves through air freight forwarders, so if you ship or plan to ship by air you will likely need to proceed through a forwarder.

When it comes to ocean freight, some large shippers have their own shipping departments that deal directly with carriers. But carriers are looking for customers that ship thousands of containers per year—so smaller shippers, those that can’t ship full containerloads or don’t have have sufficient volume to merit the attention of the big carriers, will need to deal with freight forwarders and/or NVOCCs to get their cargo where it needs to go. Big shippers also sometimes rely on intermediaries to place ocean and truck cargo.

United States maritime law was reformed several years ago to lump freight forwarders and NVOCCs into one category for the purposes of ocean transportation regulation: Ocean Transportation Intermediaries. As a practical matter, freight forwarders and NVOCCs provide different kinds of services. Some organizations provide both, but it’s a good idea for shippers to be aware of the kind of service being offered and provided under particular circumstances.

Freight brokers generally operate in the trucking mode, placing last-minute or expedited loads in the spot market.

There have been two countervailing trends in recent years with respect to the relationship between intermediaries and carriers. On one hand, carrriers have acquired intermediaries in effort to offer what they call end-to-end supply-chain solutions. On the other hand, carriers, in an effort to cut costs, have reduced their customer service departments and have come reply more on intermediaries to interface with customers and to provide a human touch.