What is Freight Forwarder?

Freight Forwarders is one of the shipment services that arrange safe and efficient transport services or consignment on behalf of importers, exporters, or other companies under a single contract that involves safe inland transit or any other modes of transportation.
Freight Forwarders is liable for any loss or damage occurring to goods and consignment. Risk Management provides comprehensive liability insurance coverage in such accidents as physical harm or any other mishap that happens to the valuable cargo worth millions of Dollars while transporting. If he is at fault or acts carelessly, he has to bear the consequences.

Risk of Freight Forwarders

Despite Freight Forwarder’s safe shipment over many great years, sometimes some risk like a total loss of cargo may happen either due to physical harm or theft during cargo transit. Loss of monies may happen if the customer does not pay them after part or all of the activities.

Damage of cargo

It may happen either due to incorrect or improper handling of the cargo while in the custody of Freight Forwarders. Omission or abandonment of cargo may occur if the consignee who was assign filed.

Incorrect release or Delay of cargo:

Due to improper documentation, the Freight Forwarder released the cargo to the incorrect party based on the type of bill of lading issued. Cargo Receipt at the destination was delayed due to the incorrect document submitted by the Freight Forwarder to the carrier. An incorrect cargo declaration was filed with custom or any other types of cargo documentation done by the Freight Forwarder cause this Delay.

Document non-collection

It happens with the involvement of HBL, and the freight forwarder releases cargo to the consignee while the transporter is still holding the original HBL because the consignee does not pay it.

Liability Provided by Freight Forwarder

Freight Forwarding services
provided by, mostly to importers, includes clearing goods through customs, calculating taxes and duties, additional paperwork. It is very important to know the legal structures under the multimodal transport operator, i.e., comply with all the regulations or their requirement of customs, ports.
Any physical harm or physical damage to the goods or consignment during a transit, i.e., caused by not enough attention, error, or Omission, makes the transporter liable for his action, and the client may sue the Freight Forwarding services due to the loss or damage to goods. The risk of a lawsuit is inducing freight forwarders to have their services insured to get the license from The General of Shipping.

Third-Party Legal Liability or any physical damage to third party’s property and legally recoverable consequential loss arising out of the process of the Freight Forwarder claims as he may be held responsible for such losses.

Errors & Omissions Liability any Legal Liability arising out of the Freight Forwarder following a negligent error or Omission by the Freight Forwarder. If the fault is of a Freight Forwarder, then he is liable to pay the loss amount to his client.
In order to reduce the risk of these liabilities, it is essential to buy the Freight Forwarders Insurances Policy, which triggers the claims arising due to these liabilities to ensures complete protection against such liabilities.


All businesses comes with risk and benefits but the main thing is to minimize the risks as much as you can for the business to become successful. Freight forwarding services are a demanding service that is essential for the businesses, so it is best to reduce the risks or you may lose your business.