Manufacturing, autos and logistics
Freight forwarder
A company that arranges shipping for customers by buying space from carriers, without usually owning ships or aircraft.
Last reviewedWhat does Freight forwarder mean?
A freight forwarder organizes the movement of goods for shippers: it books space with shipping lines, airlines and trucking firms, handles documents and customs, and combines smaller loads. Most forwarders are asset-light, owning few ships, aircraft or trucks. DSV, Kuehne+Nagel and DHL Global Forwarding are among the largest. Forwarders look at gross profit (sell rate minus buy rate) rather than revenue, because revenue swings with freight prices. Example: a forwarder buys container space at 1,500 and sells it to a customer at 1,800, a gross profit of 300 per container. Scale lets them buy space more cheaply and spread their systems costs.
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Related terms
- 3PL (third-party logistics)A company a business pays to run its warehousing, fulfilment or transport.
- Asset-light modelGrowing a business without owning the heavy assets, by franchising, managing or leasing them.
- TEU (twenty-foot equivalent unit)The standard measure of container volume: one 20-foot container.
- Economies of scaleCost per unit falls as volume rises.
- OEM (original equipment manufacturer)In autos and machinery, the company that designs, assembles and brands the final product.
- Tier 1 supplierA supplier that sells complete parts or systems directly to the carmaker.
- Vehicle platformA shared set of engineering underpinnings used for many car models.
- Battery pack costThe cost of an electric vehicle's battery pack, usually quoted per kWh of capacity.