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What is a Freight Carrier? Learn in Detail

June 11, 2024

13 min read

eCommerce businesses prioritise the quick and safe delivery of goods to their customers. To make this possible, they rely on freight carriers. So, do you know what is a freight carrier? They are an individual or company that transports the shipments on behalf of the shipper. They ensure you deliver all goods to their intended destination on time and in their perfect condition. But, that’s not all that freight carriers do. They offer a range of services, from local deliveries to global shipments. To make sure that your freight carrier matches your shipping requirements, you’ll have to pick one based on a careful consideration of several factors. 

This blog will explore freight carriers in detail, the different transportation options you have, and how you can pick the right freight carrier. 

What is a freight Carrier

Definition of Freight Carriers

A freight carrier can either be an individual professional or a commercial company legally authorised to transport cargo from one country to another on behalf of their clients. Generally, they are categorised into different divisions based on their business operations. 

A freight carrier is also known by different names, like a freight company, common carrier, or a trucking company. Regardless of their names, they operate as third-party logistics (3PL) companies to transport goods domestically or internationally by air, land, or sea. 

Common carriers offer transportation services to the general public. Some of the examples include airlines, trucking companies, and shipping lines. Freight companies, or freight brokers, on the other hand, are not directly involved in the transportation of goods. Instead, they are responsible for facilitating the movement of goods between carriers and shippers. Acting as intermediaries, freight brokers help you find the best shipping routes and coordinate between different transportation methods. 

Roles and Responsibilities of Freight Carriers

Freight carriers play an essential role in the global shipping environment. They provide an efficient and cost-effective way to transport goods from point A to B.  On behalf of a company, freight carriers carry the products by air, land, or sea and deliver them to their final destination. They operate both domestically and internationally. Freight carriers may have some legal requirements to uphold depending on the regulations in different operating regions. 

The Governing Bodies of Freight Carriers

There are different governing bodies for freight carriers. These are responsible for making rules about how goods will be transported, the payment of freight, and setting standard practices and operational procedures. Some of the most prominent governing bodies of freight carriers are listed below.

  • British International Freight Association (BIFA): Based in the United Kingdom (UK), it is a non-profit trade association that represents the UK international freight services industry. It is a primary trade association for companies registered in the UK. It governs companies engaged in the global movement of freight by all transportation methods, including air, rail, road, and sea.
  • International Air Transport Association (IATA): It is an association of airline traders across the world. IATA facilitates cooperation and coordination in ensuring the safety, security, and reliability of air services. 
  • Freight Transport Association (FTA): As one of the biggest business groups in the UK, it supports the efficiency of logistics and supply chains in the country. FTA is one of the governing bodies of freight carriers that represents the interests and vows of its members. Its associates include shipping companies or shippers. FTA supports the transport industry whose business depends on the efficiency of the transportation system. 
  • Transportation Intermediaries Association (TIA): It offers direction and leadership for the 3PL professionals and the overall industry. It helps them improve professional standards and business practices. With more than 45 years in the industry, TIA has more than 1,700 third-party logistics members.

How Do Various Freight Carriers Differ?

There are several types of freight carriers available and they can differ based on a lot of factors. These include their size, the type of products being shipped, or even the vehicle type. If you’re shipping a stackable item that does not take up the entire truck, you may want to use less-than-truckload (LTL). However, if you want your shipment to reach its destination quickly, you’ll have to pay for the unused space for the full truckload (FTL). 

Does a Freight Carrier Ship Any or all Types of Goods?

No freight carrier will agree to ship all types of goods. There can be several reasons behind them denying to ship a particular product. Some freight carriers may refuse to ship goods that are hazardous in nature and pose a significant risk to personnel and other goods. 

What Makes a Freight Carrier?

It’s not only their roles and responsibilities that define them as freight carriers. Instead, it also involves the ownership of three essential assets that make them a freight carrier. They should own trucks, terminals, and warehouses. However, not all freight carriers may own all three of them. Each one should at least have one of the three facilities. Owning these assets means they have control over the infrastructure and vehicles required to complete the shipment. Eventually, this allows them to manage the entire shipping process for you. 

Owning and operating these assets also helps freight carriers determine the cost of shipment. 

Tips for Choosing the Right Freight Carrier

Here are some tips that can help you choose the right freight carrier for your business.

  1. Range of services offered

Before you look for a freight carrier, create a list of services you’ll need. Compare them with what freight carriers are offering. Assess their ability to handle your freight requirements. Check whether they own their equipment or rely on third-party services. Lastly, analyse their storage facilities. 

  1. Pricing structure

It’s essential you find a balance between the cost they are charging and the quality of service they’re offering. Ensuring transparency in the pricing structure is essential. You should be wary of both unbelievably low prices and overpaying. You should also ensure the freight carrier does not have any hidden charges that will increase the overall cost of your shipment.

  1. Customer service support

This is one of the most important factors you should consider when looking for a freight carrier. A reliable customer support service is essential to ensure problems are resolved quickly and effectively. A freight carrier should provide you and your customers with regular updates. Before making your decision, make sure you evaluate their customer service standards and responses for time and effectiveness. 

  1. Global network and reach

A strong global network of partners would be beneficial for your business. It will not only help you navigate the complexities of international shipping logistics but also enable the freight carrier to negotiate for better rates.

  1. Technical capabilities

You should look for freight carriers that are savvy with advanced technology. They should be skilled and experienced in using shipping software for real-time monitoring, optimising shipments, etc. These technological capabilities of freight carriers will minimise delays, maximise capacity, and ensure efficient transportation.

  1. Industry experience and reputation

Lastly, the freight carrier should have the expertise and relevant experience of the industry. Their reputation will impact the good name of your business. Ask for references within your industry, check the freight carrier’s credentials, and ensure they’re capable of resolving common issues like delays and reroutes. 

Importance of Selecting a Reliable Freight Carrier

If you run an eCommerce business, then you know the importance of sending goods to your customers quickly and reliably. Simply put, shipping logistics is the lifeblood of a business. Choosing a reliable freight carrier can make all the difference in your business earning profits and losing customers. That’s why selecting a reliable freight carrier will offer you cost-effectiveness, reliability, security, and efficiency. Without a great freight carrier, your business may experience significant losses in terms of money, customers, and even reputation.

Different Types of Freight Transportation 

When you choose a freight transportation option, make sure you consider several factors. These include the volume of the shipment, the distance the goods need to travel, the time required to complete the delivery, and the pricing of the shipping service. Now, let’s look at the different types of freight transportation options available. 

1. Full truckload (FTL)

FTL is ideal for you if you want to ship large volumes of goods directly and quickly. In this method, the whole truck will be dedicated to your shipment only. FTL ensures quick transit times since the truck will travel directly from the point of origin to the destination without making any additional stops in between.

2. Less than truckload (LTL)

LTL means you’ll have to share the space in the truck with other company’s goods. It uses a hub-and-spoke network. It means there will be multiple loading and unloading points along the way. If you have to ship smaller shipments and you want to save on shipping costs, LTL is the right option for you. Though it’s cost-effective, the transit times are longer due to multiple stops. 

3. Partial truckload (PTL)

PTL is a combination of both FTL and LTL. You can opt for PTL if your shipments will not fill an entire truck but will be more than LTL shipments. PTL offers you a balance between the cost of transportation and delivery speed. It’s mostly suitable for medium-sized shipments. The risk of damage in PTL is lower compared to LTL since there are fewer handling points. However, it may have longer transit times as compared to FTL. 

Determining Freight Transportation Costs

Let’s look at some of the factors freight carriers consider to determine the transportation costs.

  1. Freight class

A freight class is a must for all shipments. This will influence the total cost of your shipment. However, determining the freight class of a shipment is not as easy as it sounds. It involves careful consideration of several factors, including the weight and density of the shipment, value, packaging, and vulnerability. For instance, heavy and denser items will be classified differently, while the type of packaging used to pack the goods can also impact the classification. Similarly, if you’re shipping high-value items, it may cost more to ship. Lastly, if you’re transporting vulnerable or fragile items that are more likely to be damaged during transit, it will be more expensive to ship. 

  1. Size and weight of the shipment

The size and weight of the shipment will always be the two primary factors in determining the rates for freight carriers. As a general rule of thumb, bigger and heavier goods will always be more expensive to ship. Some products, particularly those that are very fragile and sensitive may incur higher shipment costs. A National Motor Freight Classification (NMFC) number is assigned to all types of commodities. This helps freight carriers determine the rate based on the characteristics of the product. 

  1. Dimensional weight

Dimensional weight is essential if your shipments don’t weigh much but take up a lot of space. It is the volume your shipment occupies in relation to its actual weight. For instance, you’re shipping a huge box of lightweight balloons. The large volume they occupy will increase the shipment cost even if their actual weight is considerably low. 

  1. Distance between the country of origin and destination

The farther you need to send your shipment, the more you’ll have to pay. Even if you’re shipping a small shipment, if it has to be transported over a long distance, it can be quite expensive.

Middlemen in Logistics: Know Their Role

Middlemen in logistics are individuals or companies who act as a bridge between parties in a supply chain or a transaction. They are also referred to as supply chain intermediaries. Middlemen also help fill gaps between the manufacturing process and when retailers need a particular product. Moreover, they ensure that all products reach the retail stores on time and in their ideal condition. Some common middlemen in logistics include agents, merchants, freight forwarders, etc. 

Freight Broker: Who are They?

Also known as trucking brokers, freight brokers are third-party logistics providers. They act as an intermediary between carriers and shippers. Freight brokers work closely with shippers to understand their shipping and transportation requirements, including the type of cargo, pickup and delivery locations, the distance between the two locations, etc. On behalf of the shipper, trucking brokers negotiate shipping terms and rates with carriers. In addition to scheduling pickup and delivery times, they also take care of permits, licenses, and documentation required. 

Your freight broker will also keep you updated about whether your shipments are safely delivered. Lastly, they will not only ensure the safety of cargo during transit but also its smooth handover. It will help you minimise the potential for missing deadlines. 

Who is a Freight Forwarder?

A freight forwarder is quite similar to a freight broker. However, their roles and responsibilities extend way beyond the ones taken care of by freight brokers. A freight forwarder can either be an individual professional or a company. They work on behalf of the shipper and specialise in the arrangement of cargo. Freight forwarders offer several supply chain services. The most common ones are listed below:

  •  Transportation of air and ocean freight
  • Preparation of necessary documents
  • Inland transportation from the point of origin to the intended destination
  • Consolidation and deconsolidation of freight services
  • Storage and warehousing services
  • Customs compliance
  • Cargo insurance

It’s essential to remember that freight forwarders don’t move the cargo themselves. So, what do they do? They, instead, act as intermediaries between services that move cargo and the customers. Moreover, they can act as storage houses for their clients. Freight forwarders can help them store goods between shipments. When acting as a storage facility, they will take full responsibility for the shipping process. It means that the client will directly pay the freight forwarder, instead of the freight. Lastly, they can also take care of your internal logistics operations, including all the essential components of the shipping process, from packaging to labelling to organising shipments. 

Introduction to Third-Party Logistics (3PL) and Their Operations

Third-party logistics (3PL) providers assist, coordinate, and optimise freight carriers. When the need arises, they work as an intermediary between carriers and shippers, streamlining the complete fulfillment and shipment process. 3PL providers can operate anywhere in the distribution, shipping, storage, and transportation stages. If it’s a big 3PL company, it will incorporate all the stages mentioned above. A smaller one, on the other hand, may focus on one or two aspects of the shipping logistics and supply chains. Let’s look at some of their most important functions:

  • 3PL companies can handle freight returning, storage, and packaging services
  • They can also specifically focus on the transportation of goods
  • Though this is quite rare, 3PL companies may also take care of the financial side of freight shipping. 

Conclusion

Freight carriers are essential in the shipping industry. They ensure efficient and smooth movement of goods from one place to another. Understanding the different types of transportation options can help you make the right decision. When you choose the right freight carrier after carefully analysing their qualities and services, they can greatly improve your delivery times, reduce shipping costs, ensure product safety, and enhance overall operational efficiency. 

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