Freight Brokers, Freight Forwarders and Forwarder-Common Carriers

In the Federal Motor Carrier Safety Regulations, a “broker” is defined as

a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation. 49 U.S.C.A. § 13102(2)

“A broker does not have a role in the actual assembly or carriage of the goods.” Transportation Revenue Management, Inc. v. First NH Investment Services Corp., 886 F.Supp. 884, 886 (D.D.C. 1995).

A “freight forwarder” is defined at as

“a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business– (A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments; (B) assumes responsibility for the transportation from the place of receipt to the place of destination; and (C) uses for any part of the transportation a carrier subject to jurisdiction under this subtitle.”49 U.S.C.A. § 13102(8)

A “motor carrier” is defined at as “a person providing commercial motor vehicle (as defined in section 31132) transportation for compensation.” 49 U.S.C.A. § 13102(14)

Both a “broker” and a “freight forwarder” may arrange for carriers to transport goods, but mere brokers do not play role in actual assembly or carriage of goods. A property broker arranges transportation of property by authorized motor carrier but is not permitted to act as a carrier, whereas a freight forwarder plays a role in the assembly, consolidation, break bulk, and distribution of shipments, assumes responsibility for shipment from receipt to place of destination, uses carriers subject to Interstate Commerce Commission (ICC) jurisdiction, and may act as a carrier. Transportation Revenue Management, Inc. v. First NH Inv. Services Corp., 886 F.Supp. 884 (D.D.C., 1995).

A broker or freight forwarder who never actually handles the goods, is little more than a “travel agent. ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 253 F.Supp.2d 757 (S.D.N.Y., 2003).

However, a company that arranges to ship a customer’s goods by truck and air and has a role in handling the goods is a “forwarder-common carrier,” rather than mere “freight forwarder,” and, therefore, owes the duties of common carrier. Royal Ins. Co. v. Fountain Technologies, Inc., 984 F.Supp. 724 (S.D.N.Y.,1997.