News & Press

• How much does freight forwarding service cost? 
• What is included in the booking fee/freight forwarding fee? 
• How can one compare pricing for freight forwarding services? 

Are you asking yourself these questions about freight forwarding services?

Then you’re in the right place. In this article, we break down the costs of freight forwarding, from booking fees to add-ons and security surcharges, helping you understand how these factors influence the overall price and value of the service.

In the previous article titled “Triple F: Freight Forwarding Functions,” the general service functions of a freight forwarder were outlined. With a little bit of light shown on the functionality, we turn to price, and with this understanding of the functionality, one can more accurately distill what they are getting for their money. However, monetizing some of the special value-added elements that may come with a particular service provider can be difficult. All freight forwarders will tell you they offer the best service, and they should – they are a service provider… but the proof is in the pudding, and it may be tough to know the answer without experience.

The essential service elements of the freight forwarding process must be met (booking, freight arrangement, Electronic Export Information [EEI] submission, and documentation). Still, other factors such as service level, service model, representative access, knowledgeable service representation, visibility, and other technology-driven solutions are the unseen elements built into the pricing for freight forwarding services. There is plenty to keep in mind when considering pricing. The following provides a basic outline for guidance:

Freight Forwarding Fee (Sometimes called Booking Fee):

For export transactions, this is the base charge for handling booking, traffic arrangement, EEI submission, and documentation distribution. For import transactions, the foreign freight forwarder often calls this fee a booking fee or export handling fee. By default, this fee usually covers many of the value-added elements highlighted above, including but not limited to service capability, cargo tracking, visibility tools, and market intelligence.

Security Surcharge:

A security surcharge is applied to cover additional security measures imposed by regulatory authorities.

Add-ons:

Beyond the core charges, add-ons may be applied based on the complexities and specific requirements of a forwarding transaction:

• Certificate of Origin Issuance
• Letter of Credit Processing. 
• Document Legalization
• Advanced Manifest Filings
• Freight Charge Advancement
• Marine Insurance Offering

In all cases, your nominated service provider should work diligently to charge the same rates as quoted, only levy additional charges where applicable, and always seek the most efficient processes for handling entries to alleviate extra steps that may have an associated cost. Transparency is key for importers/exporters to develop an understanding of rate structures and costs. When comparing costs, one should always ensure they are comparing similar and complete rate structures (“apples-to-apples”). 

Your service provider should ensure that you receive accurate rates and pricing for any freight forwarding services. Transparency in the pricing approach allows for clarity to the buyer, thereby showing a direct correlation between pricing and service. This correlation translates to value.

Value ascertained through the pricing of service functions is not quite the same thing as transportation costs. In subsequent articles, we will explore transportation functions provided by Custom brokers and freight forwarders, what they are, and what that pricing structure looks like. Stay tuned!