Some importers may specify the forwarder to use for their imports. The international freight forwarder either has own office or a handling agent abroad.
Case Sample:
Freight Consolidation (2)
Further to Case Sample: Freight Consolidation (1), assuming that XY Consolidator has an office named XY Branch at the importing country of DEF Imports, and DEF Imports contracts XY Branch to handle a shipment from UVW Exports at the exporting country, the sales term is FOB Port A in the exporting country. The contract, in which UVW Exports is informed in advance by DEF Imports, calls for a delivery from Port A to DEF Imports' premises---meaning that DEF Imports has to pay XY Branch the agreed-upon CBM (cubic meter) cost to cover such charges as the ocean freight from Port A to Port B in the importing country, and the handling charge, documentation fee, and inland freight from Port B to DEF Imports' premises.
XY Branch notifies XY Consolidator of the contract and requests it to coordinate with UVW Exports. As the trade term is FOB Port A, UVW Exports must arrange and pay for the cartage from its premises to Port A, plus the brokerage fee and other charges. Under this situation, XY Consolidator may offer to handle the trucking and customs declaration for UVW Exports. The exporter (the UVW Exports) must check the options before accepting the offer. Depending on the country, the cost can be lower, or higher, when the exporter uses its own contacts.
In another instance, the importer, especially the new customer, may not inform the exporter that a forwarder will be involved in the delivery. The exporter becomes aware of such involvement only after receiving the letter of credit, in which a forwarder is specified. Such incidence must be avoided as the cost of exporting can be affected, for example, the diversion of cargo to another location designated by the forwarder, which may cost more.
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