Out at Seas: 4 Distinct Freight Forwarder Models You Should Know
I’ve spoken to over 15 different freight forwarders in the past 14 months - Although they all seem similar on the surface, there are distinct differences you should be aware of.
1.The “OG” Freight 🧱
I’ve never actually booked directly with an “OG” Freight service like CMA, ZIM, or Maersk.
I don’t know anyone who has a direct relationship with them - likely reserved for global companies who are shipping at minimum 20 containers a month.
The other 3 types are a lot more common for DTC brands.
2. The “Agent” 🕵️
The agent is an individual or small group of people who have direct relationships with the “OG” freight companies and actually book a route for you.
The agent is receiving a cut of your shipment, and typically doesn’t rate shop from more than a few shipping lines.
This can be a convenient option, but it can be more expensive and messy in terms of tracing documents since everything is done via text / email.
Where the agent lacks in technology, they can potentially make up for by intimately understanding your brand and moving quickly.
3. The “Software + Agent” Model 💻
This is your Flexport’s & GoCubic’s of the world.
They offer software + analytics, and since everyone who needs freight software + analytics also needs freight forwarding, they handle the bookings for you.
On the backend, they use software to rate shops between dozens of carriers to give you the best price.
This is a better option than the agent if you want your documents in one place and more competitive pricing.
4. The “Manufacturer + Agent” Model 🏪
Manufacturers are often asked by DTC brands if they can handle the freight forwarding for them.
As a result, many manufacturers have developed into freight forwarding agents as a “value added service”.
They will typically take a higher margin than a more direct booking option, but it’s highly convenient and one less thing you need to worry about.
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If you're building a DTC brand and want a recommendation on the freight forwarder for you — email me at keyan@ironmargin.com and I’ll send you a reply within 24 hours.
