What is a Freight Forwarder – Amazon Logistics 101

For sellers just embarking on their Amazon journey, transporting goods across international borders (usually from China to global Amazon marketplaces) might seem daunting. 

But shipping inventory halfway across the globe is easier than you think, thanks to service providers known as freight forwarders. 

A freight forwarder can pick up your goods from the manufacturing site, load them on a carrier, handle the complex paperwork, and safely transport your products to an Amazon fulfillment center. 

Working alongside reliable service providers minimizes the risk of running out of stock (OOS), instances of damaged inventory, and not being able to capitalize on increased consumer demand during popular holiday seasons and Q4. 

This blog will answer questions like:

• What is a freight forwarder?
• What are incoterms?
• What are the advantages of freight forwarding?
• How to find reliable freight forwarding service providers?
• What are the costs involved in freight forwarding?

Let’s start with the basics: what is a freight forwarder?

What is a Freight Forwarder?

A freight forwarder or freight forwarding company are logistic experts responsible for moving cargo (or freight) across the supply chain. Freight forwarders don’t transport goods themselves—they act as intermediaries who rely on their contacts with popular carriers to move goods across international trade routes, i.e., the air, ocean, railroads, or highways.

What are the Advantages of Using a Freight Forwarder?

Some of the advantages of working alongside a freight forwarder include:

Direct Help from Experts

Even if you were to spend hours researching and learning about customs clearance procedures, documentation costs, and freight charges based on volume and weight, there’s no substitute for experience. 

Reputable freight forwarders have been in the game long enough to know how to deal with international custom clearance issues, supply chain bottlenecks, worker strikes, natural disasters, and emergency reroutes, to name a few. Working alongside the experts reduces the risk of damaged goods and prolonged delivery times.

Low Transportation Costs 

Partnering up with an international freight forwarder is, in most cases, the most economical option. An abundance of freight forwarding companies ensures that prices remain stable so Amazon sellers like yourself can transport goods without breaking the bank.

Note: We strongly recommend comparing pricing plans for multiple freight forwarders. That’s because it’s difficult to estimate the actual markup costs, but once you do your research and learn about the average market rate (for transporting freight across the same route), it’s unlikely that you’ll get scammed. 

Safeguard Your Inventory (and Reputation!)

Working with renowned international freight forwarding companies like DHL, and Kuehne + Negal, there’s peace of mind knowing your goods are in the right hands. These logistics service providers deliver freight on time and implement the best storage and transportation practices.

Proper storage containers and continuous on-board surveillance protect fragile and sensitive goods from damage and theft. In addition, investing in the right freight forwarding services ensures your inventory reaches buyers in the best condition—increasing customer satisfaction and reducing the likelihood of negative product reviews.

Some freight forwards also offer freight insurance that guarantees reimbursement (according to set terms and conditions) if your goods get damaged, lost, or stolen in transit. 

Transport Small Quantities

Not every Amazon seller needs to transport a container’s worth of inventory, especially beginners who want to learn the ropes by selling a few dozen products. 

Freight forwarders provide consolidation—also called less than container (LCL)—services where they store multiple consignments in a single container, spreading shipping costs among all participants.

Track and Store Inventory

Freight forwarders use advanced Transportation Management Systems (TMS) to keep their clients updated regarding their freight’s whereabouts. Such service providers can also arrange warehousing services usually owned and operated by their affiliates.

Once you reach out to freight forwarders, prepare to encounter plenty of supply chain and logistics jargon. The most popular of these are called Incoterms, something Amazon sellers should know about.

What are Incoterms?

Set forward by the International Chamber of Commerce (ICC), Incoterms are sets of rules that define the responsibilities of buyers and sellers (i.e., importers and exporters) in international trade. These terms clarify each party’s duties, costs, and associated risks, ensuring greater accountability and smoother transactions. 

The following are popular Incoterms:

• Ex Works (EXW): The manufacturer produces the goods and stores them at the production site or a warehouse of choice. Then, the responsibility to pick, pack, and ship the goods to an Amazon warehouse falls on your (or your freight forwarders) shoulders. 
• Free Carrier (FCA): The manufacturer must produce and load the goods onto your (in this case, your freight forwarders) transport. The manufacturer is also responsible for the safekeeping of your goods, export clearance, and delivery to the port. After that, the risk passes onto your freight forwarder.
• Free on Board (FOB): The manufacturer must produce and deliver your inventory to the port and on board a vessel. Free Alongside Ship (FAS) is a similar term where the manufacturer places your goods alongside the ship and not on it. FAS is commonplace except in cases where inventory is difficult to load. 
• Cost and Freight (CFR): CFR is similar to FOB, except that the manufacturer or freight forwarder is responsible for the safety of the goods so long as they remain on the vessel. Cost, Insurance, and Freight (CIF) goes one step further by adding the responsibility of insurance to the manufacturer or freight forwarder.

Note: FAS, FOB, CFR, and CIF are all basic incoterms used for inland waterway and sea transport.

• Delivered at Place (DAP): The supplier or seller of goods is responsible for delivering goods to a foreign destination. DAP does not include the risks and costs of clearing customs or unloading the goods. Deliver at Place Unloaded (DPU) is a related term where the seller must also bear the cost of unloading the goods.
• Duty Delivery Paid (DDP): The manufacturer or your freight forwarder is responsible for transporting the cargo from the point of origin to an Amazon fulfillment center and taking care of everything in between. 

Duty Delivery Paid (DDP) is the most convenient option for Amazon sellers because you essentially outsource all the risk and paperwork involved to a third party. However, going for any other options will require you to get in touch with and work alongside multiple forwarders or agencies, distracting you from the task at hand, i.e., setting up an Amazon business.

Where to Find Reliable Freight Forwarders?

There’s no shortage of freight forwarders to help you ship products from China to any one of the international Amazon marketplaces. The easiest (and often most economical) way to find one on Alibaba.com is by typing in “freight forwarders” in the search bar and hitting enter. 

Browse through the recommendations to see the cargo charges, shipment types, and other details. Also, don’t forget to read the customer reviews, time spent on the platform, and verified status to select only the best and most reliable forwards in the market.

What is the Difference between a Freight Forwarder and a Shipper?

People tend to use the term “freight forwarders” and “shippers” (or shipping line) interchangeably, but they refer to different things. A shipping line business is responsible for transporting cargo safely between ports. 

On the other hand, a freight forwarder is responsible for transporting the cargo to the vessel, loading and unloading it between ports, and delivering the goods to a stated destination (based on the incoterm agreements upon by both parties).

Note: The term “shipping” used on Amazon or for Amazon-related fulfillment activities refers to delivering products from a storage facility or an Amazon fulfillment center to buyers’ locations.

Freight Forwarding for Amazon Businesses – A Cost Breakdown 

The cost of freight forwarder services varies. While it’s difficult to determine whether the services offered are worth the price tag, knowing the expenses incurred by forwarders when transporting goods helps create rough estimates.

Note: big names in the freight forwarding industry don’t shy away from offering their clients a detailed breakdown of costs. This helps in comparing quotes between different suppliers and choosing the best option.

Here’s are some services forwarders charge their clients for:

• Carrier cost: The cost of transporting your goods across the land, air, rail, or sea. Generally speaking, sea freight is the cheapest (and has the longest shipping time), whereas air freight is on the costlier side (fasting shipping times). 
• Container cost: Your inventory will be large enough to qualify for a Full Container Load (FCL), i.e., you pay for an entire container that only contains your goods or Less than Container Load (LCL), which consists of inventory belonging to different sellers (and therefore, is less expensive).
• Freight volume and weight: The freight’s volume is converted into volumetric weight and charged accordingly, or the actual weight is taken into account—whichever value is greater.
• Freight type: Non-generic cargo like fragile, hazardous, or temperature-sensitive goods require special care, which adds to the loading, unloading, storage, and overall transportation costs.
• Additional packaging: Your goods may be subject to extra packaging or palletization based on the local and international trade and shipping rules. Don't overlook this cost; otherwise, your inventory might get sent back for repackaging!
• Documentation expenses: Includes the usual documentation expenses needed to clear goods for import and export as well as the bill of lading and necessary invoices.
• Insurance cost: Don’t skip out on insurance—it’s needed to protect your freight against potential damages. Also, verify with your forwarders whether insurance is included in the quotation or it needs to be purchased as an add-on.

There may be other costs involved in the quotation, but these ones are usually included in a quotation.

Conclusion – Amazon Shipping and Logistics Done Right

To sell on Amazon, you need to carefully plan and execute essential tasks like keyword research, product hunting, Amazon PPC, listing optimization, and product sourcing (including shipping). 

To get in touch with suitable suppliers and freight forwarders, you need to sift through endless pages on Alibaba.com and individual websites, read up on customer reviews, and maybe read up on a few blogs and YouTube videos.

Fortunately for you, there’s a tool out there that can help you get in touch with some of the best product manufacturers/suppliers in China, and it’s called Easy Source.

Thanks to a collaboration between ZonGuru and Alibaba.com, the Easy Source tool shortlists reliable and quality manufacturers for related niches with just a click of a button. These suppliers also have links with leading freight forwarders and can fetch you some fantastic discounts!

But don’t take our word for it—avail a 7-day ZonGuru Easy Source tool free trial and see for yourselves!

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