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RIGHTS ,DUTIES AND RESPONSIBILITIES

The art of perfecting

Clearing and forwarding Abilities

Training Module Notes

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No part of these notes may be reproduced or copied, nor may these notes be loaned, nor
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Institute (NHTI)
 RIGHTS ,DUTIES AND RESPONSIBILITIES

Legal Status of a Freight Forwarder

i) Common Law Countries
ii) Civil Law Countries
Standard Trading Conditions
 Usually formulated in accordance with the commercial practice or legal system
prevailing in each country.
 In some countries they are based on the FIATA model ( International
Federation of Freight Forwarders Associations) which is a non-governmental,
membership-based organization representing freight forwarders in some
countries and it was founded in 1926 .
 One of the essential means of improving and maintaining professional
standards of the forwarding industry , although conditions vary from
country to country, a
forwarder is expected to:
1. Take reasonable care of goods entrusted to him
2. Comply with instructions of his customer in matters relating to their
transportation
3. Avoid committing himself to any firm date of delivery at destination and has
usually right to lien and detention over the goods in the event of customer’s
failure to pay for his duties related to the job (particularly freight) pertaining to
those particular goods as per contract.
LIABILITY
As agent forwarder generally accepts liability of:
 Own fault and his employees/servants
 Routing to the wrong destination
 Errors during customs operations
 Delivery of goods contrary to instructions
 Surcharge resulting from unnecessary delays on the forwarder’s part.
 Re-export without compliance to formalities
 Generally does not accept liability for acts or omissions of third parties (such as
carriers,re-forwarders,etc) provided he has shown proper care in the choice of
third parties.
 Assumes responsibility in his own name
 Liable for acts and omissions of carrier etc
 Negotiates with his customer a price for his services instead
duties and responsibilities of the forwarder as principal

A Freight Forwarder is well skilled in the logistics requirements of several countries

and enjoys the benefits of established relationships with numerous carriers. They take
care of all documentary requirements for the movement, custom clearance, arranging
carriers for your goods, booking cargo space, negotiating freight charges. Basically,
once a Freight Forwarder is in the track you may sit back and relax while your goods
traverse across the globe to several destinations.
1. Assurance to best rates
Freight Forwarders are negotiators of the rates and expert in the market with
established relationship between carriers, a freight forwarder will always get you the
best rates in the market. A freight forwarder can always leverage high volume of
goods to reduce costs of transportation.
2. Consolidation
Consolidation of goods is one of the main reasons why the transportation rates are
reduced considerably. Consolidation is simply the act of combining smaller shipments
to make one large shipment. Greater the volume of the goods lesser the amount you
pay for transportation.
3. Route Optimization
As a part of an extensive international trade network Freight Forwarders are capable
of advising on the optimum route selection for the movement of your shipment
thereby reducing the transit time as well transportation costs. When forwarders book
cargo space for customers, they have the flexibility to choose the best routes and
transit schedules depending upon the customer’s requirements.
4. Insurance
Cargo Insurance is an infallible method to secure of your goods. Freight Forwarders
provide insurance to protect your shipment from any physical loss or damage while
shipping whether by land, ocean or air.
5. Inventory Management
Freight Forwarders can provide handling, storage, packaging and distribution of the
goods all at one go as and when required. Most freight forwarders are well equipped
with
warehouses not just for the storage of goods but also for efficient handling of goods,
sorting, packaging facilities such as parallelization, strapping, shorten and expand
wrapping, labeling as well as reverse logistics.Agility
Under accidental situations, a Freight Forwarder is always prepared to handle an
emergency. For instance, a shipment is rerouted to a different port due to some natural
calamity or the shipment faces delay due to offloading by a carrier during its
transhipment at a certain port. Such challenging scenarios can be handled with much
ease given the established resources of a Freight Forwarder.
6. Provides strategic solutions of long distance product
sourcing and movement
7. Provides capabilities interfaced across a range of different
transport modes
8. Offers supply chain management solutions
9. Delivery and customs clearance
10. Cargo handling and distribution management
11. Inter-modal transport services
12. Consultancy/advisory services on international trade• Mega forwarders have
increasingly enhanced their role by adapting to changing global logistics scene and
investing heavily in information technology and quality trained.
AGENT VS. PRINCIPAL
A freight forwarder may perform the above duties in two capacities – as agent or as
the principal contracting carrier. The distinction governs the contractual relationship
between the parties(shipper or owner of the goods, freight forwarder and sub-carrier)
and affects the respective liabilities of the parties in the event of a loss.
As agent, a freight forwarder arranges for the transportation of goods by sub-carriers
on behalf of the shipper or owner of the goods. The freight forwarder will arrange for
contracts between the shipper and the sub-carriers and will not typically handle or
take possession of the goods. Depending on its contract with the shipper, the freight
forwarder may still perform some of the previously mentioned duties; however, in this
situation, the freight forwarder is merely contracting to make transportation
arrangements on behalf of the shipper.
Thus, in the event of-loss of or damage to the goods, the shipper’s claim is generally
against the sub-carrier directly and not the freight forwarder.
As an agent, the freight forwarder may be liable to the shipper where it fails:
- to act with reasonable dispatch;
- to exercise due skill and care in selecting sub-carriers;
- to follow the shipper’s instructions;
- to communicate the shipper’s instructions to the sub-carrier(s); or
- to preserve the shipper’s interests

Advantages of freight forwarding

 Cost effective.
 Specialization.
 Customs knowledge.
 Special services.
 Organization.
 Handles any load.
 Handle cost organization.
 Saves time.
 Tracking facilities.
 Secure
Import freight
Imports are goods and services that are bought by residents of a country, but are made
outside of the country. They can be ship, air and rail or even buy back in your
baggage from a plane. If they are produced in an overseas country and sold to local
residents, they are imports. The European Union, United States, China, Japan, and
France are five of the biggest importers of goods.
Export freight
Exports are a function of international market whereby goods produced in one country
are shipped in to another country for future sale or trade. Exports are a key component
of a country’s wealth, as the sale of such goods adds to the producing nation's gross
output. One of the oldest forms of wealth transfer, exports occur on a large scale
between nations that have fewer restrictions on trade, such as duty or subsidies.
Exported goods are considered zero rated goods.