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I
INTRODUCTION
The increased activity of freight forwarders and the expanded diversity of their work are striking facts of modern carriage of goods. This increase is a result of the container revolution, the emergence of multimodal systems of inland carriers, terminal owners and sea carriers, the long term over-availability of tonnage in the world shipping market coincidental with the rapid and unprecedented development of the global logistics industry. Freight forwarders have fitted into this new global logistics order and provide a valuable service both to the carriers and to their shippers, hence their new importance.
Freight forwarders, despite or perhaps because of their new-found fortune, are faced with a dilemma-will they present themselves as "principal contractors" or as "agents?" At times, they even flirt with the term "carrier."
II
THE DUAL ROLE OF THE FREIGHT FORWARDER
The freight forwarder traditionally acts as an agent who arranges for the shipment of goods belonging to his customer, the shipper. The freight forwarder, as agent, arranges for transportation, pays freight charges, insurance, packing, customs duties etc., and then charges a fee, usually a percentage of the total expenses. All the costs are (or should be) disclosed to his customer, the shipper.
Sometimes, the freight forwarder acts as principal contractor arranging the carriage in his own name. The fees, payable by the shipper, are a straight freight charge. They then arrange to pay lower freight rates to the carrier and obtain their profit from the rate difference between the two. Very often, the freight forwarder consolidates the cargoes of a number of shippers into a single container, resulting in savings which benefit the freight forwarder and the shippers. On these occasions, the freight forwarder's responsibility to the shipper is often that of a carrier.
Whether acting as agent or principal, the freight forwarder (as is normal in commerce) usually attempts to contract out of as much responsibility as possible. This has often resulted in very confusing standard trading conditions where the two contradictory roles and kinds of responsibility - that of agent and that of principal-are set out in the contracts attempting to define the dual roles of the freight forwarder.
III
AGENT OR PRINCIPAL?
Whether the freight forwarder is contracting as an agent or a principal will depend...