Factoring Companies Guidebook
Freight Forwarding
Definition
Typically a freight forwarder acts as an agent arranging the transfer of goods rather than dealing with the actual physical transfer. They may also be involved in arranging and submitting the transport documentation.
Freight Forwarders will advise on:
The most appropriate route and method of transportation i.e. shipment by air, road, courier, sea and space booking times.
- Packing and marking requirements.
- Documentary requirements
- Insurance
- Costs
Concerns
The freight forwarder acting as an agent does not have title to the goods or ultimate control over it reaching its final destination, at a specified time and in the appropriate physical condition and quality. There is also a greater chance of the invoices being disputed by the customer, particularly where numerous stages are involved with various different carriers.
Identification
Determine from the Client the precise nature of their business and whether they are responsible directly for the actual physical transfer of goods or act as agents to facilitate the transfer.
Treatment
At one time freight forwarders were not considered an acceptable type of business for a Discounting facility. However, today we have relaxed our stance on this and we have got some on our books. Strict controls over the documentation should be enforced and all incidents over poor admin, documents etc. should be reported immediately.
