Freight forwarders often provide lower prices compared to direct carriers. Here are the key factors:

1. Volume Discounts:

   • Bulk Negotiations: Freight forwarders consolidate shipments from multiple clients, allowing them to negotiate better rates with carriers due to the high volume of goods they manage. These volume discounts are often not available to individual shippers with smaller, less frequent shipments.

2. Consolidation:

   • LCL and FCL Optimization: Freight forwarders optimize container usage by consolidating less-than-container load (LCL) shipments from different clients into full container loads (FCL), which reduces costs per unit of cargo.
   • Air Freight Consolidation: They also consolidate air freight shipments, combining smaller shipments into larger ones to qualify for lower rates from airlines.

3. Network and Relationships:

   • Established Relationships: Freight forwarders have established long-term relationships with multiple carriers, ports, and customs agencies. These relationships often result in preferential rates and priority services.
   • Local Partnerships: They often have partnerships with local agents in various countries, ensuring smooth and cost-effective handling of goods at both origin and destination points.

4. Operational Efficiency:

   • Streamlined Processes: Freight forwarders have expertise in logistics management, including documentation, customs clearance, and compliance. Their streamlined processes reduce delays and costs associated with shipping.
   • Technology and Tracking: Investment in technology and tracking systems enhances efficiency, reduces errors, and provides better visibility, leading to cost savings that can be passed on to clients.

5. Flexible Routing and Mode Selection:

   • Optimized Routing: Freight forwarders can select the most cost-effective routes and modes of transport (air, sea, rail, or road) based on the specific needs and constraints of the shipment.
   • Multimodal Solutions: They offer multimodal solutions that combine different transport modes to minimize costs while meeting delivery requirements.

6. Risk Management:

   • Insurance and Liability: Freight forwarders often provide comprehensive insurance and liability coverage, reducing the risk and potential cost impact of cargo damage or loss.

7. Competitive Market:

   • Competitive Pricing: The freight forwarding industry is highly competitive, pushing forwarders to offer competitive pricing and added value services to attract and retain clients.

8. Economies of Scale:

   • Economies of Scale: By handling large volumes and leveraging economies of scale, freight forwarders can spread fixed costs over many shipments, reducing the per-unit cost of transportation.

Advantages of Using Freight Forwarders:

• Cost Savings: Lower overall shipping costs due to consolidated shipments and negotiated rates.
• Comprehensive Services: End-to-end logistics solutions including warehousing, documentation, customs clearance, and delivery.
• Flexibility and Convenience: Tailored solutions to meet specific shipping needs, offering flexibility in routing and transport modes.
• Expertise and Support: Professional handling of logistics challenges, ensuring compliance with international shipping regulations and mitigating risks.

By leveraging these advantages, freight forwarders can offer more competitive pricing compared to direct carriers, making them a preferred choice for businesses looking to optimize their shipping costs and logistics operations.

Put it in a nutshell, freight forwarders can provide same professional logistics services with a discounted price.