Head of Product, Wisor
Head of Product, Wisor
Today’s global logistics is a complicated mesh of carriers, transit methods, and warehousing networks. Freight forwarders serve as the connecting layer between those services, enabling shippers to seamlessly move goods without having to individually negotiate contracts for every leg of the journey. This is especially true given that the freight forwarding industry is projected to reach $216 billion by 2029.
Freight forwarders charge fees for their services, which are often significant, depending on the complexity and scope of the shipment. Understanding freight forwarder fees helps you to better navigate them to reduce costs, improve margins, and understand what you’re paying for.
Freight forwarders coordinate and manage shipments across multiple transport modes – road, sea, rail, and air. They handle rate negotiations, contracts, documentation, and customs clearance to ensure your cargo moves smoothly from origin to destination.
Carriers typically handle only one or two transport modes and rarely provide warehousing, aside from short-term storage between transfers. Crucially, you’re responsible for managing documentation, negotiating rates, and coordinating handoffs between each carrier.
Though carriers and freight forwarders may appear similar at first glance, their roles and cost structures are quite different. Both transport goods across multiple destinations, but freight forwarders take on the added responsibilities of logistics coordination, scheduling, and freight contract management.
Costs | Freight Forwarder Cost | Carrier Cost |
|---|---|---|
Administration | Yes | Yes, but typically lower |
Booking Fee | Covers booking time-slots with carriers and scheduling pickup | No |
Handling Fee | Covers processing goods at warehouses or terminals, such as drayage, moving within a warehouse, or prepping for pickup by a carrier. | No |
Documentation Fee | Covers paperwork, customs applications, port entry, compliance paperwork, and all other documentation needed to ship your cargo. | No, but you have to cover all documentation yourself and get it to the shipper on time. |
Customs & Compliance | Includes customs duties, fees, paperwork, and processing. | Some shippers handle customs duties and fees on your behalf, and then bill you after clearance. In other cases, carriers may require a customs bond to be paid upfront. |
Cargo Fees | Calculated on the full length of the journey based on all modes, distance and route, seasonality, and cargo specifics. | Yes, calculated on the specific leg of the journey. |
Insurance | Most freight forwarders include insurance as a fee, but it may be included automatically. | Most carriers include basic insurance, but you may be able to upgrade insurance for a fee. |
Pickup Fee | Included in the total quote but may include pickup by multiple carriers. | Yes, covers picking goods up from the warehouse. |
Surcharges | Extra fees like congestion and security surcharges at ports will be passed on to you in the invoice. | Extra fees like congestion and security surcharges will be passed on to you in the invoice. |
A standard freight forwarding invoice can include dozens of items. The complexity of your invoice depends on the complexity of cargo, number of modes of transport, regulatory and national boundaries, and number of carriers involved. Let’s take a look at the most common freight charges you’ll see on your invoice.
In some cases, you’ll see less common freight charges on your freight forwarder invoice. These might include:
Freight costs vary quite a bit depending on factors like time, container usage, location, etc. There’s no way to predict averages or potential costs without knowing the specifics of the cargo and its journey upfront. However, the following factors influence total costs.
All freight costs are based on cargo type and volume. This includes handling charges, transport fees, etc.
Freight forwarders typically cover most transport modes. Ocean freight is usually the most affordable mode of transport, with rail coming in second. You might also have a forwarder that works with one mode. For example, an ocean freight forwarder moves goods from port to port. You’ll pay different rates than if your forwarder also covers intermodal transport.
Many freight forwarders will lump sum this fee or will charge per shipping mode included.
Shipping during peak periods can greatly increase total costs. The higher the market demand, the more you’ll pay for the route itself. In addition, you can expect to add fees for:
The longer your transport route, the more planning, documentation, and handoffs will have to happen.
Freight forwarders might offer anything from a turnkey door-to-door service to a port-to-port option where you still have to handle pickup, delivery, and port fees yourself. You’ll pay more for extra services and add-ons. However, you might pay less by contracting with a freight forwarding company that uses volume to reduce rates.
A Full Container Load (FCL) means one shipper uses the full container. This is not economical unless you fill that container. Why? You pay for shipping volume as well as weight.
Less than Container Load (LCL) means your freight forwarder consolidates shipments from multiple shippers into a single container. You’ll still pay for weight but only for half the volume. While it’s not applicable if you’re shipping FCL volumes, LCL is one of the better cost-saving options offered by freight forwarders.
Seasonality and geopolitical complexity raise total freight costs more than transport mode in many cases. Always review route-level surcharge history.
Freight forwarding invoices can vary quite a bit depending on the freight forwarder. For example, some offer a flat-rate package with everything included. In this case, you might see a single line item on the freight invoice. Most itemize individual costs and pass them on to you. Each of those services will include a markup, typically 20-25%. For instance, a $75 port entry application is marked up to $100 on the invoice, but you don’t have to file the paperwork yourself or pay for administration separately.
A Pro Forma invoice functions like a quote, outlining all fixed costs upfront but not finalizing the total bill. After delivery, you’ll receive the final invoice, which includes both the fixed charges and any additional or unforeseen fees.
Line Item | Pro Forma | Final Invoice |
|---|---|---|
Carrier Fees | Yes | Yes |
Handling Charges | Yes | Yes |
Booking Fees | Yes | Yes |
Port Fees | Yes | Yes |
Insurance | Yes | Yes |
Documentation (ISF, AES, etc.) | Yes | Yes |
Fixed carrier charges | Yes | Yes |
Customs charges | No | Yes |
Storage | No | Yes |
Unexpected Fees (e.g., port congestion) | No | Yes |
Chassis Fees | No | Yes |
In short, if the fee is not a flat rate, you’ll see it on the tax invoice and not on the pro forma invoice.
Freight forwarding saves time, improves logistics, and can create opportunities for cheaper and faster shipping even on routes where you don’t have a network. At the same time, freight forwarders can charge considerable fees. Taking steps to reduce those fees ensures your margin stays intact.
Understanding what your freight forwarder is offering creates opportunities to optimize, improve your contract, and choose the right freight partner for your needs.
1. What’s included in your quote?
Some freight forwarders use lump sum rates, others use line items and transparent fees structures. You’ll also want to know which fees are included in the quote vs which you can expect to see in the tax invoice.
2. Do you support automation or API-based integrations?
Automating documentation, handoffs between carriers, scheduling, route management, etc., can save time and costs no matter who you’re working with. Choosing a freight forwarder that integrates with your own TMS saves time and money on manual processes, integrations, and document creation and transfer.
Freight rates can be complicated and are based on hundreds of factors. Many of those are network and contract based.
Freight forwarders negotiate contracts across their network. One freight forwarder might work with dozens to hundreds of carriers. Your direct carrier costs depend on those negotiated rates. Freight forwarders often negotiate lower rates than you can by leveraging volume discounts, consolidating LTCs, and optimizing routes based on network rates in real time.
Cargo size, weight and volume always translate to direct costs. Fees are also calculated differently by transport mode. For instance, trains charge primarily based on volume. Trucks and ships consider both equally and may even only bill for one.
Route complexity, length, and complicating factors all come into play. Here, you’ll consider factors like:
Transport modes each have their own rates. In addition, you’ll pay loading and handling fees, port/terminal fees, and handling fees per mode. The more modes you’re using, the more the total fee will be. Transit time also impacts total rates.
Regulatory costs can be considerable.
You can expect your freight forwarder to deliver a flat rate per fee, with a markup to cover their costs for doing the paperwork for you.
Higher market demand and increased weather-related risks both drive up freight costs. Timing and route planning are key to minimizing those price surges. Aligning shipments away from seasonal peaks and weather events can save you considerably on total costs.
Some freight forwarders offer add-ons and value-added services, for example, warehousing, palletization, containerization, door-to-door shipment, etc. Some even offer packaging, repair, quality control, and more. You’ll pay for every additional service you opt for. However, doing so can be cheaper than sourcing those services yourself.
Tracking and managing freight forwarder fees is critical to protecting your margins and service level. Wisor automates rate tracking and discovery to ensure you have visibility across every step of shipping, so you can choose the right partners to maximize outcomes and meet SLAs while minimizing total costs.
Freight forwarder costs mix cargo, documentation, and administration costs into a single fee. Rather than simply moving your goods from point A to B, freight forwarders negotiate moving goods to a final destination, often handling all paperwork, handoffs, and carriers in between. You’ll pay fees based on cargo weight and volume, compliance, number of carriers and modes, and regulatory requirements.
Staying on top of those fees and comparing quotes across multiple freight forwarders helps you reduce those costs. For example, by matching a carrier to the route and cargo type, you can ensure favorable costs.
Ready to cut freight costs with automated mode comparison and smart fee analysis? Book a demo with Wisor today and see how smarter shipping starts with real-time visibility.
Head of Product, Wisor
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