When you need to transport goods domestically or internationally, you can either work with a freight forwarder or a shipping company. While these terms can be confused as being the same thing, there are some distinct differences between them that are important to understand. 

In this blog, we outline the differences between freight forwarding and shipping and explore how you can decide which solution is best for your business. 

 

What is a freight forwarder?

A freight forwarder is a third-party company that coordinates the transportation of goods on behalf of its clients, without owning the transportation assets they use. Instead, they work with a network of transportation companies to move goods via ground freight, air freight, and ocean freight.

They are responsible for a variety of shipping processes, including route planning, booking carriers, documentation, customs clearance, packing, warehousing, and distribution. 

Freight forwarders can help businesses optimise their supply chains, make shipments more efficient, and reduce costs by choosing the most cost-effective shipping methods and routes.  

 

What is a shipping company?

Whilst freight forwarders are responsible for coordinating the movement of goods and shipping processes, shipping companies are responsible for physically moving these goods. 

Shipping companies own their transportation assets, including planes, trucks, and ships, and use these to transport goods from their location of origin to their destination. They handle processes like packing, unpacking, customs clearance, and documentation, but do not coordinate shipping logistics like freight forwarders do. 

 

Freight forwarding vs shipping: Key differences

To help you fully understand how freight forwarding and shipping vary, we have outlined the key differences below:

 

Operation and responsibilities

Freight forwarders and shipping companies operate differently and have different levels of responsibility. 

Shipping companies own their assets and are responsible for the physical movement of their clients’ goods. Therefore, they are held responsible for any operational disruptions during transit, such as vehicle breakdowns.

In contrast, freight forwarders coordinate the transportation of goods by working with their network of transportation carriers, helping to pick the best and most efficient routes and methods. 

Freight forwarders act as the brains behind the shipping process, whereas shipping companies are responsible for actually moving the goods. 

 

Services

The services offered by freight forwarders and shipping companies also differ. Shippers typically offer a smaller range of services, whereas freight forwarders offer a more comprehensive range. 

Shipping companies typically only offer services related to the movement of goods. They load and unload shipments, deliver goods to their destination, manage documentation, and deal with customs clearance regulations. 

Freight forwarders offer a more complex range of services, including managing shipping logistics, paperwork, customs clearance, cargo insurance, shipment consolidations, and warehousing. 

 

Costs and pricing

Freight forwarders and shipping companies price their services differently. 

Shipping companies will typically charge a fixed fee based on the goods being shipped. The quote you are given will take into account a range of factors, such as weight, volume of goods, and distance. 

Freight forwarders are typically the more expensive option. However, they can help you save costs in the long term by consolidating shipments, ensuring you do not receive any customs penalties, and choosing the most efficient modes of transport and transportation routes. 

 

Complexity 

Freight forwarders and shipping companies are best suited to different levels of complexity. 

For example, shipping companies are better suited to more straightforward, simple shipping tasks, such as ecommerce shipping within a single country. Freight forwarders, on the other hand, are ideal for dealing with complex shipments, particularly when it comes to international shipping.

 

Technology

Both freight forwarders and shipping companies use digital platforms to aid operations. However, freight forwarders will typically use more sophisticated technology that allows for things like real-time quotations and the optimisation of transport routes using AI.

 

Do I need a freight forwarder or a shipping company?

Whether you choose to work with a freight forwarder or a shipping company will depend on the type of shipping you need to carry out.

For simpler shipments, such as domestic shipments within the country, working with a shipping company might be the better choice. This will usually be cheaper, faster to arrange, and will give you full control. 

If you are looking at more complex, international shipments, freight forwarders are often better suited. They specialise in comprehensive logistics support, the coordination of international shipments, making sure customs requirements are met, and the optimisation of transport methods and routes for maximum cost-efficiency. 

 

How to choose the right service for your needs

Still unsure whether you need a freight forwarder or a shipping company? We have put together some key considerations to help you make your choice: 

  • Cargo size and volume of goods: If you are regularly shipping large volumes of goods, using a shipping company may be the more cost-effective choice. 

  • Complex shipping requirements: If you have to deal with complex shipping regulations in your industry, working with a freight forwarder can ensure customs requirements are met and your goods are transported without delays or disruptions. 

  • Level of control: If you would like to have more control over your shipments and shipping process, working with a shipping company might be the best choice for you. However, if you would like a third-party to handle all of your shipping logistics so you can focus your time and effort elsewhere, freight forwarding is ideal. 

 

SEKO Logistics: Your Expert Value-Added Freight Forwarding Partner

At SEKO Logistics, we offer a comprehensive range of value-added freight forwarding services, including: 

With extensive experience across a range of industries, our team of logistics specialists is committed to helping you optimise your supply chain and shipping processes in a way that best suits your business.

Get in touch today to discuss how we can help.