The Role of Agents in International Freight Forwarding

Category: Analysis Author: Baudouin de Dreuille Date: 16/10/2024 Reading time: 2 min

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What is an agent in international freight forwarding?

Definition

Transport agents are primarily freight forwarders themselves. They represent freight forwarders where the latter are not physically present, enabling them to operate anywhere in the world. A partner agent operating on behalf of another freight forwarder becomes their subcontractor.

The appointed freight forwarder is accountable to their client for their choice of service providers and the quality of service delivered.

The agent’s role in the transport chain depends on the Incoterm. Depending on the Incoterm, the agent will have more or fewer tasks to handle. Their responsibilities may include managing relationships with local carriers, customs authorities, and other logistics service providers.

Compensation

Agents are primarily compensated through a “profit share” (PS). The higher the volumes handled with an agent, the lower the PS can be. The average PS varies by continent. For example, Asian PS rates are historically quite low ($25/TEU), while South American PS rates tend to be higher ($100/TEU).

Networks

Agents can be independent or part of structured networks such as WCAworld or Conqueror Freight Network.