Logistics &
Freight Forwarding

Almost every shipment involves the same five parties. Learn them now and the rest of the programme becomes easy, because every document you will ever see is just these five names in different boxes.

1. The shipperThe company sending the goods. Usually the seller or the factory. They pack the cargo and produce the invoice. On documents they may also be called the consignor or exporter.
2. The carrierThe company that physically moves the cargo — a shipping line, an airline, a haulage firm. Carriers own vehicles. They are paid to move a box from A to B and nothing more.
3. The freight forwarderThe organiser. A forwarder usually owns no ships or planes. They buy space from carriers in bulk, sell it in smaller pieces, and handle the paperwork. This is the job most of this programme trains you for.
4. CustomsThe government authority at each border. They decide whether goods may enter or leave, and how much tax is due. Customs is not a company you can negotiate with.
5. The consigneeThe company receiving the goods. Usually the buyer. On arrival, they (or their broker) must claim the cargo and pay any duty.

One warning that catches every beginner: a single company can be more than one player. A large retailer may be the consignee on paper but also act as its own forwarder. Always ask what role is this company playing on this shipment rather than assuming.

The Bill of Lading (everyone says "B/L") is the most important piece of paper in sea freight. Beginners get confused because it does three different jobs at once. Separate them and it becomes simple.

Job one: it is a receipt

The carrier signs it to say "we received this cargo, in this condition, on this date". If the carrier noticed damage at loading, they write a remark on the B/L. A B/L with no damage remarks is called clean. A clean B/L is worth money, because banks and buyers will pay against it. One with remarks is claused, and it can stop a payment.

Job two: it is the contract of carriage

The terms printed on the back set out what the carrier promises, what they are not liable for, and the maximum they will pay if cargo is lost. Almost nobody reads the back. You should, once, because it explains why a carrier who loses a £40,000 machine may legally owe only a few thousand.

Job three: it is a document of title

This is the part that surprises people. With an original B/L, whoever holds the paper controls the cargo. The carrier releases the container to whoever presents an original. This is why originals are couriered between banks, and why losing one is a serious event, not an inconvenience.

A customer calls: the pallets arrived crushed. What you do in the next sixty minutes decides whether your company recovers the money or pays for it. Work in this order.

1. Stop the driver leaving, if you canOnce the vehicle leaves a clean signature behind, proving damage happened in transit becomes very hard.
2. Get the damage noted on the delivery documentThe receiver must write what is wrong on the POD before signing — "3 pallets crushed, goods damaged", not just "damaged". A clean signature is close to an admission that everything arrived fine.
3. Photographs, immediatelyWide shot of the load in the vehicle, then the packaging, then the goods, then the labels and pallet numbers. Photographs taken the next day are worth a fraction of photographs taken now.
4. Tell the carrier in writing todayEvery carrier contract has a notification deadline, sometimes as short as three days, sometimes seven. Miss it and the claim dies regardless of who was at fault.
5. Tell the customer what happens nextNot who is to blame — you do not know yet. Tell them the process, the timescale, and when you will next update them. Silence turns a damage claim into a lost account.
6. Do not admit liabilityYou are gathering facts. "I'm sorry this has happened, I'm investigating" is honest. "That's our fault, we'll cover it" before you know is a decision your insurer will hold against you.

Freight staff receive 150 emails a day and read them on a phone between phone calls. Long emails do not get read; they get postponed. Every operational email you send should fit this shape.

1. Line 1 — the referenceBooking number, container number, your reference. So the reader can find the file before they read the problem.
2. Line 2 — the situationOne sentence of fact. No history, no explanation of how you feel about it.
3. Line 3 — the askExactly what you want them to do, and by when. One request per email.
4. Line 4 — the consequence or deadlineWhy the timing matters. This is what turns a request into an action.

The same message, two ways

Weak: "Hi, hope you're well. I wanted to check in regarding the shipment we discussed last week which seems to have had some issues, could you let me know where things stand when you get a chance? Thanks so much."

Strong:

Whatever the cause, you only ever have four moves. Knowing them turns panic into a decision you can make in ten minutes.

Beginners jump to reroute because it feels decisive, and it is usually the most expensive and slowest to arrange. Experienced operators reach for split first, because in most cases the customer does not need all 14 pallets on Friday — they need the two pallets that feed the production line.

Incoterms answer three questions: who arranges transport, who pays for each leg, and at what exact moment the risk of loss transfers from seller to buyer. Beginners assume cost and risk move together. They often do not, and that gap is where disputes live.

The clearest example: CIF

Under CIF, the seller pays for carriage and insurance all the way to the destination port. But risk passes to the buyer when the goods are loaded on board at origin. So if the vessel sinks mid-ocean, the goods are the buyer's loss even though the seller paid the freight. The buyer claims on the insurance the seller bought for them. That is not a mistake in the rule — it is the rule.

Carriers sell space, not weight. A box of pillows weighs nothing and fills an aircraft. So every mode has a rule that converts space into a weight figure, and you are charged on whichever number is higher. Get this wrong and you quote a loss.

Air freight — divide by 6000

Volumetric weight in kilos = length × width × height in centimetres, divided by 6,000.

Example. A crate 120 × 100 × 90 cm weighing 150 kg. Volume = 1,080,000 cm³. Divided by 6,000 = 180 kg. Actual weight is 150 kg, so you are charged on 180 kg. Quoting on 150 would cost you 20 per cent of the freight, straight out of your margin.

Road freight — loading metres and pallet spaces

A trailer is roughly 13.6 loading metres. A standard pallet takes 0.4 of a loading metre if it can be double-stacked, 0.8 if it cannot. Non-stackable cargo is the most common reason a road quote loses money: you priced four pallets and the truck lost eight spaces.

Sea LCL — weight or measure

LCL is charged per cubic metre or per 1,000 kg, whichever is greater. This is written as W/M.

Example. 3.2 m³ weighing 1,900 kg. The measure figure is 3.2. The weight figure is 1.9. You are charged on 3.2 revenue tons.

Every product crossing a border is given a number. That number decides the duty rate, whether a licence is needed, and whether the shipment is inspected. The first six digits are the same in almost every country on earth; countries add further digits of their own.

Take a leather shoe with a rubber sole, classified as 6403.99:

• 64 — the chapter. Footwear.
• 6403 — the heading. Footwear with leather uppers.
• 6403.99 — the subheading. Narrows it by sole type and construction.
• 6403.99.93 — national digits added by the importing country, which fix the exact duty rate.

Why it is worth being careful

Two codes that look almost identical can carry duty rates of 4 per cent and 17 per cent. On a £90,000 shipment that is £11,700 of your client's money. Classification is not clerical work; it is the most financially significant thing a junior forwarder does.

How to classify properly

1. Get a real description"Parts" is not a description. You need what it is made of, what it does, and how it works.
2. Start at the chapter, not the search boxKeyword search returns plausible wrong answers. Reading down from the chapter forces you to rule things out.
3. Apply the general rulesThey tell you what to do with mixtures, sets and incomplete goods — the cases that cause disputes.
4. Write down whyKeep a one-line note of your reasoning with the file. If customs challenges it three years later, that note is your defence.
5. Get a binding ruling for anything repeated or borderlineA formal written decision from customs that they must honour. Free, slow, and worth it for a product you will ship monthly.

Two operators run identical vehicles on identical routes at identical rates. One makes money and one does not. The difference is almost always utilisation — how full the vehicle is, and how much of its running is paid for.

The calculation

Utilisation = space actually sold ÷ space available. A 26-pallet trailer running with 17 pallets is at 65 per cent.

Now add empty running. If that trailer returns empty, the round trip is 17 paid pallets out of 52 possible pallet-journeys — 33 per cent. The rate per pallet looked healthy. The route is losing money.

This is why a carrier will quote you a surprisingly low rate on a lane where they already run empty. You are not getting a favour; you are paying for a journey that was happening anyway. Knowing this is the strongest card you hold in a negotiation.

On-time delivery (OTD) is the headline number in every logistics review. It is also the easiest number in the business to quietly fake, usually without anyone intending to.

Three decisions you must make before you measure it

1. On time against which date?The date the customer originally requested, the date you confirmed, or the date you last revised after a delay? Measuring against the revised date makes your OTD look excellent and means nothing. Serious operations measure against the first confirmed date and track revisions separately.
2. What counts as delivered?Arrival at the site, arrival within the booked window, or signed and accepted? A truck that arrives at 16:55 for a 14:00 window is late, even though it arrived that day.
3. Whose fault is excluded?Many teams exclude weather, customs holds and customer site closures. That may be fair for judging a carrier, but a customer experiences every one of those as a late delivery. Report both: the raw number and the controllable number.

The number underneath

OTD tells you how often. It never tells you how badly. Always pair it with average days late on the failures. Ninety-four per cent on-time with an average six-day failure is a far worse operation than eighty-eight per cent with an average half-day failure — and the first one scores better.

Freight fraud is real and it is simple: a criminal poses as a legitimate haulier, collects a full load of valuable goods, and disappears. It happens most often on a busy Friday when someone needs a truck urgently and skips the checks. Do not be that person.

1. Verify the operating licenceCheck the licence number against the official register, not against the document they emailed you. Documents are trivially forged; registers are not.
2. Verify the insurance directlyAsk for the broker's contact details and confirm the policy is live, covers the cargo value, and covers the type of goods. A certificate is a photograph of a fact, not the fact.
3. Check the company is who it saysMatch the registered company name, number and address. Watch for a company registered last month using a name almost identical to an established firm.
4. Check financial healthA haulier in distress cuts maintenance, loses drivers, and eventually strands your cargo. Late filings and county court judgments are warnings.
5. Confirm the driver and vehicle before collectionName, registration, phone number, in advance. On collection, the driver's identity should match. This single step stops most load theft.
6. Start with a trialGive a new carrier a low-value, non-urgent load first. What you learn in one shipment is worth more than any questionnaire.

Freight forwarding has a structural trap, and it catches new businesses in their first good year. You pay out before you get paid in, and growth makes the gap wider, not smaller.

The timeline of a single container

You funded that shipment for roughly seven weeks. The job was profitable on paper from day one. Now run thirty of them a month and grow twenty per cent: every new container widens the hole before it fills it. Forwarders do not usually fail because they price badly. They fail because they grow faster than their cash.

The five defences

• Duty and VAT are not your money. Wherever possible, have the client use their own deferment account. Fronting tax on someone else's import is the single largest cash drain in the business.
• Credit-check before the first booking, not after the first late payment.
• Set a credit limit and enforce it. A limit you never enforce is a wish.
• Invoice the day the job closes. Every day of delay in your own office is a day added to the gap, and it is the one delay entirely within your control.
• Match your terms. If you pay carriers in 14 days and bill clients in 60, you are a bank with a freight hobby.

New forwarders chase every enquiry. Experienced ones refuse perhaps a third, because a bad client costs more than an empty slot. Qualify before you quote.

Five questions, asked in the first conversation

1. What are you shipping, and how often?One-off enquiries are fine but rarely profitable after the work of setting them up. Regular volume on a lane you already serve is worth real effort.
2. Who moves it for you today, and what is wrong with them?The answer tells you everything. "Nothing, we just want a second price" means you are being used to pressure an incumbent. "They are always late" is an opportunity. "We have used four forwarders this year" is a warning about them, not about the market.
3. What matters most: price, speed or certainty?If the honest answer is price alone, you will win the account and lose it the moment someone undercuts you by two per cent. Certainty-led clients are the ones worth building a business on.
4. What are your payment terms, and who signs off invoices?Asking about money early is not rude; it is professional. A client offended by a credit check is telling you why they need one.
5. What happened the last time a shipment went wrong?You learn how they behave under pressure, which is the only version of them that matters.

How to say no

Never insult the enquiry. "On this lane we can't be competitive at that level — you'd be better served by a specialist. If your requirements change, or you have cargo on the routes we're strong on, come back to me." You lose a job you did not want and keep a contact who remembers you were honest. A surprising amount of freight business arrives years later from exactly these conversations.