Within the freight industry, you will hear the terms freight forwarding and brokering. Many times they are casually substituted for one another, suggesting similar meanings.

Beware of this – there are significant differences.

A forwarder is a Common Carrier under the law and, as such, a forwarder must file evidence of cargo insurance coverage with the Federal Motor Carrier Safety Administration (FMCSA).

Forwarders must also adhere to Carmack amendment liability requiring proper claims handling. A forwarder has the same cargo claims and cargo insurance responsibility as that of a motor carrier.

Many times carriers will use third-party carriers to augment their own capacity, but move those vehicles on a freight forwarded basis – meaning that the carrier’s Bill of Lading Terms & Conditions are in effect.

Brokers do not have a statutory freight claims (Carmack) liability and can get by with contingent coverage (less than half the cost of primary coverage) because they’re not liable in the event of a loss, absent negligence on the broker’s part.

Both are viable options when it comes time to ship your vehicle, as long as you understand their respective obligations to you.