Freight forwarder and shipping
A comprehensive explanation of what a forwarding order is requires the reader to know exactly what forwarding is and what responsibilities belong to the forwarder or shipper.
Freight forwarding is called the activity that involves organizing the transportation of goods. Shipping companies, when doing work for their principals, plan and prepare transportation. This includes route planning, selection of a suitable fleet and general consulting activities, and sometimes even loading and unloading of goods.
A freight forwarder (forwarder) is a company (entity) or person engaged in arranging the transportation of goods on behalf of a principal. The freight forwarder not only supervises the preparation of goods for transport, but also the proper conduct of the transport – he reacts in case of unforeseen circumstances (plans detours, organizes a replacement vehicle, etc.). The freight forwarder is also responsible for preparing forwarding orders.
Forwarding order – definition
What exactly is a forwarding order? It’s really a contract between the freight forwarder (shipping company) and the principal. The subject of this contract is the organization of transportation, and its content should include all the necessary elements, such as:
- Data of the parties to the contract – both the principal and the entity executing the forwarding order. The standard set of information that should go into the order is the names of the entities, their business addresses, TIN or PESEL identifiers, as well as contact information such as phone number or email address.
- Cargo specification – the type of goods carried, their weight, information about possible danger and the value of the goods.
- Loading data – place and date of loading and unloading.
- Fleet and transport operation data – information on the means of transport used in the transportation of goods under contract, the data of the driver or drivers.
- Required safeguards – requirements for securing cargo.
- Financial information – remuneration to the freight forwarder, detailed rates, contractual penalties, etc.
- Other terms of the agreement.
Important!
Like any contract under Polish law, a forwarding order does not have to have a specific form: the forwarder and the principal can agree to execute the order orally, which theoretically has the same legal force as a written contract.
However, practice shows that preparing a forwarding order in writing avoids many mistakes and settles possible disputes over the content of the order before they arise for good.
The question may also be relevant: who issues the forwarding order? Industry practice says that a forwarding order is prepared and issued by a freight forwarder, including in the document all the details of the order, previously agreed upon by the principal and the contractor. However, nothing prevents the forwarding order from being prepared by the customer himself.
Forwarding order – sample
A well-prepared forwarding order helps minimize the risk of irregularities in the transportation process. To protect yourself from making unnecessary mistakes, it is worth using a shipping order template. Learn how to fill out a shipping order:
Important!
The above template is only a suggestion – if your company needs to include more information in the document, just add the data of interest in the appropriate place.
You can prepare a forwarding order in writing in a standard word processor or even write it by hand, but you may need a forwarding order program. There are many such solutions available on the market, including TMS+, MDB Transport or iCargo.
Forwarding contract vs. forwarding order
A forwarding order is really a forwarding contract – the two terms are used interchangeably. However, it is worth knowing that the forwarding contract is defined by the Civil Code – it belongs to the set of named contracts, and all the provisions concerning it can be found in the Title XXVI, Art. 794-804 c.c..
Among other things, the law contains information about the obligations and rights of the parties to the forwarding contract. Prominent among them are the following:
- The freight forwarder has the right to receive remuneration for the service provided – this is tantamount to the obligation of the principal to pay the remuneration on time.
- The freight forwarder is obliged to carry out the order in accordance with the terms and conditions agreed upon in the contract.
- The freight forwarder undertakes to provide all information concerning the progress of the order to the contractor on an ongoing basis
Handling forwarding orders
To properly and efficiently handle a shipping order, it is worth starting with a detailed determination of the scope of services to be included in the order. Leave nothing to chance, and before accepting an assignment – especially if the document itself is prepared not by your company, but by the principal – make sure that the provisions contained therein coincide in full with what was previously agreed upon. Such an approach, while certainly prudent, will minimize the risk of unforeseen difficulties (for example, with getting paid for an assignment).
This situation, of course, works both ways – clear and detailed provisions in the forwarding contract force the forwarder to execute the order with the utmost care, which is especially important in the context of meeting deadlines – it is worth remembering this.
Forwarding order vs. transportation order
In the context of a shipping order, the concept of a transportation order is often used. However, it is worth making it clear: a transportation order is not the same as a shipping order. The difference lies in the scope of services that the two types of documents cover.
The transport order includes the conditions and description of transporting the cargo from the indicated point to the destination.
The forwarding order covers a much broader range of services – in addition to describing the delivery of goods itself, it includes issues of organization, planning and coordination of transportation. Thus, it can be said that a forwarding order covers not only the transportation itself, but also the period before and after the actual transportation of the goods covered by the order.
Transportation contract
A transportation contract contains – by analogy – slightly less information than a freight forwarding contract. What should be included in a transportation contract?
- Data of the parties to the contract – names of entities, addresses, tax IDs, contact information.
- Cargo information – type, weight, quantity.
- Terms and conditions of the contract – remuneration, deadline for execution of the order
- Information on loading and unloading – places and dates.
- Vehicle and driver data – vehicle type, registration number, driver’s data, driver’s license number, contact phone number.
Important!
The difference between a forwarding order and a transportation order is of particular importance to shippers. Acceptance of a transport order by a forwarder (freight forwarding company) carries specific legal consequences – a forwarder who undertakes to carry out a transport order becomes a carrier under the law.
The above means that in the event of a loss he will not be able to use his insurance – as the insurance coverage for a freight forwarder is usually different from that for a carrier. The situation does not apply to freight forwarders, who at the same time act as a carrier on a daily basis.
However, should a freight forwarder – who does not have carrier insurance – execute a transportation order and it becomes necessary to use the policy, he will be liable for the damage with his own property, so he must exercise extreme caution before deciding to accept an order bearing the characteristics of transportation.
Summary
Finally, let’s gather all the most important information about shipping orders in one place – this will make sure you haven’t forgotten anything:
- A forwarding order and a forwarding contract are really one and the same thing – it is best that it take written or electronic form to avoid the understatement of an oral contract.
- A forwarding order covers a different range of services than a transportation order.
- Carrying out a transportation assignment makes the contractor a carrier, which has consequences – for example, if insurance is required.
- A forwarding order is a named contract – the provisions on it are found in the Civil Code (Title XXVI).
- Any entity can issue a forwarding order – most often, however, it is handled by a forwarder, after agreeing on the terms of the contract and other details with the principal.
