For many people, the world of logistics seems opaque and full of foreign vocabulary. Two terms which come up frequently are: carrier and freight transport. Even though these terms are often used interchangeably in transport logistics, it’s important to draw a line between them because there are a number of differences between freight forwarders and freight transport companies that you should know in order to save time and costs.
In this article, we look at the differences and advantages of freight forwarding companies and freight transport companies so that you can make the right choice for your logistics.
What is the difference between freight forwarding and freight transport?
As two parts of the logistics industry, “freight forwarding” and “freight transport” are one of the most important economic sectors in Germany— and rightly so. Germany has turned out to be the country with the highest turnover in established European freight transport. The reasons for its success are, on the one hand, the optimal geographical location, high quality standards of the transport companies, as well as its good rail, road, shipping and air freight network.
But what exactly is a freight forwarding company and what is freight transport? Let’s look at the differences:
What is a freight forwarding company?
A shipping company or freight forwarder takes care of everything needed for a company to transport cargo safely. The shipping company orchestrates everything so that it arrives in a secure and cost-efficient way.
What does a shipping company do?
- Pays customs duties
- Takes out transport insurance
- Determines the mode of transport (truck, rail freight, shipping or air freight)
- Determines the optimal route through route planning software
- Commissions of freight carriers
- Tracks goods via GPS
- Optimises of gasoline consumption
- Stores goods
A freight forwarder uses its large transport network to negotiate the best prices and chooses that optimal route. In essence, it arranges the transport of goods but does not carry the cargo. Shippers signs a forwarding contract for the company to manage logistics.
There are over 14,700 freight forwarders in Germany alone. Since many have grown over the last few years, some—like Amazon Freight—now also offer freight forwarding via subcontractors, i.e. “all-inclusive”.
What is freight transport?
This is the part of freight logistics involving the physical transport of goods, carried out by a freight transport company. To execute the transport and distribution of freight is specialised, a freight service provider works with freight carriers and its own fleet of vehicles.
What does a freight transport service provider require?
- Trucks and truck drivers
- Ships and captains
- Train and train driver
- Planes and pilots
A freight service provider in freight transport is specialised in this safe freight handling and in the shipping of goods. For the transport of goods, a contract of carriage with the freight forwarder needs to be completed. In Germany, 73% of all goods are transported by road freight, which is often the fastest and usually the most cost-effective way.
Freight transport example: Let’s say a start-up wants to send goods to America via air freight with Lufthansa. However, Lufthansa does not accept individual orders, but only works with freight forwarders. The start-up places its order with a freight forwarder, such as Amazon Freight, who has the goods, along with other orders, for transportation to America via Lufthansa. The carrier organises the shipping of the goods; Lufthansa takes over the physical transport of goods.
Calculating transport costs & freight costs
The transport and freight costs you will incur depend on the transport route, the volume of the freight, the destination and the speed of delivery. The quicker you want your cargo to arrive, the higher the costs.
The following are used to calculate freight cost:
- Transport duration
- Transport date
- Transport route
- Transport details
- Transport process
For example, if you want to send goods from Italy to Germany then the fastest way is via truck trailers. However, due to petrol prices and motorway tolls, the costs are higher than with the train. Rail transport may take longer, but it is a cheaper alternative.
If you’re shipping to Switzerland from Germany, the price will be higher because there is less demand for transport and fewer journeys made that waya. However, shipping from Switzerland to Germany is cheaper because of higher demand and palletised cargo can be supplemented by other partial loads.
Within Europe, there is no transport of goods via air freight or sea freight. Only truck transport and rail freight are available.
Cheap freight transport via freight forwarding & freight transport
Which transport is the cheapest option is usually calculated by the shipping company. This factors in the weight of the goods as well as the size of the volume. The larger number (volume or kilograms) determines the price of the transport and the type of transport, such as a FTL (Full truckload) or on pallets.
Amazon Freight has an extensive network of thousands of freight forwarders and own trailers to give you the most cost-effective transport options for your shipping needs.
What variable costs are there in freight forwarding and freight transport?
The variable costs for freight forwarding and freight transport include:
- Fuel prices for trucks, shipping and aeroplanes
- Tolls and duties subject to change
- Seasonal surcharges
- Holidays, which cause additional costs due to higher pay for staff and longer transport routes due to traffic jams
- External influences, such as inflation or weather changes
Total costs will also depend on the shipping company and the freight transport service provider. An established company can often offer better prices because the employees have more experience, better route planning, and a more extensive network.
In most cases, shippers work with a freight forwarding company that carries out your order with a freight transport service provider. You can also work directly with a freight transport company, but then you miss out on the numerous advantages, such as transport insurance, efficient route planning or tracking of the goods that a freight forwarder offers you (see above).
Save costs through digitalisation in freight forwarding and freight transport
Through the digitalization in the logistics industry not only can companies do this save costs and resources, but also act more sustainably. Automated processes also avoid errors and speed up the supply chain.
This includes:
- TMS (Transportation Management System) - to analyze the best route, avoid disruptive factors (such as traffic jams) and calculate prices in real time
- GPS-Tracking of the goods – for full control, from loading to unloading the goods
- Digital waybills that can be signed online
- Bookings dashboard to track goods live and adjust orders
Digitalisation makes it possible to offer highly optimised logistics solutions, improve transport systems and at the same time reduce the work of customer support. As you can see, it’s less about a comparison between freight forwarding and freight transport, but rather how they work together.
Conclusion
Amazon Freight offers you modern, high-quality freight forwarding services at competitive prices. Do you want to send goods within Europe or from Germany to the United Kingdom? We deliver every load booked and meet our time target 94% of the time. Test our digital dashboard and easily set up your shipper account so you can get direct insight into our platform.
Send us an email at: freight-eu-interest@amazon.com. We would be happy to advise you.