The information provided here is part of Import Export online Training
How can a Freight forwarder provide airfreight rates better than Airlines?
What does a Freight Forwarder do in Exports and Imports trade? Can a freight forwarder provide better sea freight/ air freight to exporters/importers?
Let us take an example in air shipment – How can a Freight Forwarder provide better air rate than a major aircraft carrier?
Aircraft liner provides air rates to freight forwarders..However freight forwarder can provide better rates than actual aircraft liners.
Let us discuss this statement. You are an exporter situated in Paris. You need to move 150 kgs parcels to London. You have contacted airlines to provide airfreight up to London for 150 kgs. The airlines has various tariff. Say – USD 30 minimum, USD 3 per kg for +100kgs,USD 2.5 per kg for +250kgs ,USD 2 per kg for +500kgs etc. So this particular cargo falls under +100kgs and charges is USD 2 per kg.
You have contacted freight forwarders to provide the rates. He can provide you a rate of USD 1.5 per kg. Because, this particular freight forwarders will have cargo of others also to the same destinations. For example he collects cargo from one or more other exporters to the same destination and club all cargo together and book in his name (freight forwarder’s name). He, as a freight forwarder issues House Airway Bill to each of them and books as one shipment as a Groupage Airway Bill (Master Airway Bill – MAWB). The freight forwarder at Paris ships cargo to his counterpart at London. Once cargo reached London, the freight forwarder at London delivers cargo to each of consignees. I have written a couple of articles about how does MAWB and HAWB work etc. to know more about freight forwarding documentation in same website. Please read the same to know more about freight forwarding business activities in import and export trade of international business.
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