How to choose a freight forwarder and read a freight quote
A good freight forwarder is one whose quote is complete, comparable and matches what later appears on the invoice. Before choosing, check the role the forwarder plays (agent or contractual carrier), which items the rate covers and what is excluded. Most misunderstandings concern fuel surcharges, destination terminal charges and free time terms.
By Hiram Trade Editorial Desk
- Published
5 min read
The forwarder's role: agent or carrier
A forwarder can act in two ways, and its liability depends on which:
- As an agent it arranges transport on your behalf and contracts with carriers; it is mainly responsible for careful selection and instructions.
- As a contractual carrier (in ocean freight often called an NVOCC) it issues its own transport document and is liable for the carriage as a carrier, even if a shipping line physically performs it.
FIATA, the international federation of freight forwarders associations, provides standard documents, including the negotiable FIATA Multimodal Transport Bill of Lading (FBL), set up for forwarders acting as multimodal transport operators, and the Forwarders Certificate of Receipt (FCR). Ask the forwarder which document it will issue and on what terms, especially if payment runs through a letter of credit, because the bank must accept that document.
How to assess a forwarder before the first order
- Specialisation. Does it handle your trade lane and cargo type, such as reefers, out-of-gauge or dangerous goods?
- Agent network. Who will collect from the supplier and who will handle the destination port? Ask for the agents' names.
- Liability insurance. Ask for confirmation of the forwarder's liability policy and its limit. Do not confuse it with cargo insurance, which protects the value of the goods; the difference is explained in cargo insurance and the Institute Cargo Clauses.
- Customs clearance. Is the forwarder a customs broker itself, or does it subcontract?
- Membership and references. Membership of a national forwarders association or the FIATA network is a signal, not a guarantee; references from companies with similar cargo say more.
- Communication. Who owns your shipment and how quickly do they answer status questions?
Structure of a freight quote
A typical FCL ocean freight quote has three parts.
| Part | Typical items |
|---|---|
| Origin charges | pickup from supplier, THC at the port of loading, export clearance, transport document fee |
| Main freight | base rate per container and carrier surcharges: fuel, peak season, security, emissions |
| Destination charges | THC at the port of discharge, delivery order fee, import clearance, delivery to warehouse |
Which parts the buyer pays and which the seller pays follows from the Incoterms rule. Under FOB the buyer pays main freight and destination charges; under CIF the seller pays freight, but charges after discharge usually fall on the buyer. The detailed split is in Incoterms 2020 in practice.
The most common surcharges
- BAF / fuel surcharge. Covers changes in fuel cost. Carriers use different names; Hapag-Lloyd, for example, calls it Marine Fuel Recovery (MFR) and shows it separately on invoices, and in March 2026 announced an additional Emergency Fuel Surcharge for extraordinary fuel costs not covered by the MFR. Fuel surcharges are updated periodically, so a rate "excluding BAF" cannot be compared with a rate "including BAF".
- THC (Terminal Handling Charge). The charge for handling the container at the terminal, separately at the port of loading and at destination.
- Security surcharge (ISPS). Linked to port and ship security requirements.
- PSS (Peak Season Surcharge). A seasonal surcharge in periods of high demand.
- Emissions surcharge (ETS). Since 2024 maritime transport has been covered by the EU Emissions Trading System, and the cost of allowances may be shown as a separate item.
- Documentation fees. Bill of lading issuance, amendments to documents, security filings before arrival in the EU.
All-in or itemised
An all-in quote gives one amount per container. It is easy to compare, but "all-in" has no legal definition. Ask what exactly it includes; it usually excludes duties and taxes, container demurrage and detention, customs inspections and destination charges.
An itemised quote takes more work but shows which costs are fixed and which are variable. On longer contracts it also lets you negotiate individual items.
For less than container load (LCL) the rate is usually quoted per W/M, meaning per tonne or per cubic metre, whichever is greater. Consolidation and deconsolidation charges come on top.
What to check in the quote terms
- Rate validity and whether surcharges are fixed for that period or applied at the value on the loading date.
- Currency. Ocean freight is often in USD while local charges are in EUR or other local currency; that is a currency risk.
- Space guarantee and what happens if the container is rolled to the next sailing.
- Transit time and routing, including transshipment ports.
- Free time at the terminal and at the consignee, and the rates after it; more in demurrage and detention charges.
- "Subject to" clauses, such as equipment availability, surcharge changes, inspections.
How to compare several quotes
Send every forwarder the same request: goods, weight and volume, container type, pickup and delivery points, Incoterms rule, planned date. A template for a structured request is in our article on how to write an RFQ. Then map each quote to the same structure (origin, main freight, destination) and fill in missing items with your own estimates, marked as estimates. Only then compare totals.
Hiram does not book freight, but it lets you compare supplier quotes by total landed cost with the Incoterms 2020 rule attached, and you can plug your forwarder's transport costs into that figure. The method is in comparing import quotes by landed cost, and current offers are on the market.
Sources
- FIATA: FIATA Documents (opens in a new tab)
- Hapag-Lloyd: Worldwide Price Announcement, Marine Fuel Recovery Surcharge (opens in a new tab)
- Hapag-Lloyd: Implementation of Emergency Fuel Surcharge (EFS) (opens in a new tab)
- European Commission: Reducing emissions from the shipping sector (opens in a new tab)
This article is for information only and is not legal, tax or customs advice. Rules and rates change: check the current official sources or consult an adviser before you decide.