Freight forwarding is a critical part of global supply chains. But for finance teams, it can often feel like a black box - filled with unpredictable charges, fluctuating rates, and multiple vendors across borders.
If your business regularly imports or exports goods, you’re likely working with a freight forwarder. And while they make international shipping easier, managing the financial side of freight forwarding is another story entirely.
At its core, freight forwarding is the coordination and shipment of goods from one destination to another via a third-party logistics provider, known as a freight forwarder.
Freight forwarders don’t move the cargo themselves. Instead, they act as intermediaries between shippers and transport services, handling the logistics of transporting goods by air, sea, rail, or road.
They arrange everything needed to move goods internationally or domestically, including:
Essentially, freight forwarders simplify the complex, multi-step process of international trade - especially for businesses that don’t have in-house logistics expertise.
Freight forwarding involves multiple steps. Here’s a typical breakdown of what happens when you engage a freight forwarder:
Before anything moves, the freight forwarder gathers all necessary documents, commercial invoices, packing lists, bills of lading, and export licences. These are essential for legal and customs compliance.
Next, the forwarder selects the most appropriate mode of transport and carrier based on cost, speed, cargo type, and destination. They handle the booking and coordinate pick-up from the supplier or warehouse.
Depending on the shipping schedule and destination, goods may be held in a warehouse temporarily. Forwarders arrange this storage and handle cargo consolidation if needed.
Freight forwarders work with licensed customs brokers to submit declarations and ensure all duties, taxes, and tariffs are paid. This step is crucial for avoiding border delays.
To protect the shipment from loss or damage, forwarders can provide insurance coverage, often bundled into the shipping agreement.
Once the shipment clears customs at the destination port, the forwarder coordinates the last-mile delivery to your warehouse, store, or customer.
For companies managing multiple imports or exports a month, tracking each of these moving parts—and the associated costs—is a massive task for finance teams.
It’s easy to confuse freight forwarders with shipping lines or carriers. But there’s an important distinction. Shipping companies (e.g., Maersk, DHL, FedEx) physically move goods. They own the ships, planes, or trucks used in transport. Freight forwarders don’t own transport assets. Instead, they coordinate shipments on your behalf by booking space with carriers and managing the end-to-end process.
Understanding freight forwarding costs is key to accurate budgeting and spend control. Typical cost components include:
These charges often appear across multiple vendor invoices, making reconciliation a challenge. Finance teams need to know not only how much was paid, but for what, to whom, and whether it aligns with the original shipping estimate.
For more detail on managing these charges, explore our blog on logistics costs.
Even with a reliable freight forwarder, businesses face common pain points, especially when they scale operations:
Incorrect or incomplete documents can delay shipments for days - or even weeks - at customs. This not only impacts delivery timelines but can increase demurrage and storage costs.
Global trade regulations are constantly changing. From new HS codes to country-specific import rules, non-compliance can lead to fines or seizure of goods.
Freight rates are influenced by fuel costs, seasonal demand, political tensions, and port congestion. Businesses often receive rate changes after booking, making budgeting unpredictable.
Most companies work with multiple freight forwarders, customs brokers, insurers, and carriers. Without a centralised system, coordinating invoices, tracking payments, and mapping costs to the right shipment becomes a manual and error-prone process.
These challenges highlight the need for digitised, structured expense tracking and vendor invoice workflows.
Summit was built to solve the exact challenges finance and operations teams face when dealing with complex vendor ecosystems like freight forwarding.
Here’s how Summit simplifies logistics expense management:
Freight invoices often contain line items across customs, warehousing, and transport. Summit extracts this data, categorises costs, and automatically routes invoices for approval based on value, department, or vendor.
Explore how we do this in our vendor invoice management solution.
Summit gives you full visibility into spend by project, shipment, or vendor, so you can monitor freight costs against approved budgets. You’ll know instantly if a shipment exceeds planned costs or if a vendor consistently bills above market rates.
Track all logistics and shipping-related expenses in one place, from carrier fees to customs duties. Summit integrates with your accounting system, providing accurate, consolidated data for better reporting and compliance.
Finance and operations teams can submit, approve, and reconcile freight-related expenses efficiently. Learn more in our solution for employee and expense management.
Freight forwarding doesn’t have to be a blind spot in your financial operations. With the right tools, you can track every cost, manage vendor relationships with confidence, and ensure every shipment aligns with your budget and goals.
Want to reduce logistics stress and gain visibility into freight costs? Talk to us today and see how Summit helps finance teams manage freight forwarding like pros.