What is the difference between freight forwarders and freight operators?

Aug 14, 2024

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1, Definition and Responsibilities
Freight forwarding: Freight forwarding refers to the business of operating on behalf of others, providing services such as handling transportation procedures, picking up, shipping, and transporting goods on their behalf. The basic nature of a freight forwarder is a "freight intermediary", representing both the shipper and coordinating the carrier's transportation work. They are responsible for a series of services for shippers, including chartering, booking, loading, preparing relevant documents, customs declaration, inspection, insurance, container transportation, container dismantling and assembly, issuing bills of lading, and settling freight and miscellaneous fees. Freight forwarders play a bridging and connecting role between shippers and carriers in the international freight market.
Freight operator: Freight operator refers to the organized business entity that manages the transportation activities of goods, including shippers, traders, various scale fleets, third-party logistics, etc. Freight operators play a crucial role in the entire road freight transportation chain, responsible for the actual transportation of goods. They ensure the safe and timely delivery of goods to their destination by organizing and managing transportation resources.
2, Business scope and legal status
Business scope: The business scope of freight forwarding is relatively broad, covering the entire process of agency services from receiving, loading, transporting to delivery of goods. They are not only responsible for arranging the transportation of goods, but also involve multiple links such as customs declaration, inspection, insurance, etc. The business scope of freight operators mainly focuses on the actual transportation of goods, including vehicle scheduling, route planning, cargo loading and unloading, and other specific operations.
Legal status: In legal terms, freight forwarders are usually regarded as intermediary organizations, and their legal status is similar to that of freight forwarders or freight brokers. They sign agency contracts and transportation contracts with shippers and carriers respectively, assuming the responsibilities and risks stipulated in the agency contracts. As the carrier, the freight operator directly signs a transportation contract with the shipper and assumes all responsibilities and risks during the transportation process.
3, Profit points and operating models
Profit point: The profit of freight forwarders mainly comes from agency fees, which are the remuneration obtained by providing transportation procedures and other services for shippers. The profit of freight operators mainly comes from the difference in freight rates, that is, by organizing and managing transportation resources to complete goods transportation tasks at a cost lower than market prices, in order to obtain profits.
Operation mode: Freight forwarders usually adopt a light asset operation mode, not directly owning transportation vehicles, but integrating market resources to provide comprehensive logistics services for shippers. Freight operators may have their own fleet and transportation vehicles, adopt a heavy asset operation model, and directly participate in the actual transportation of goods.
 

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