Their role and their function.

 The modern freight forwarding offices undertake also all the ancillary transport services which are related with this, such as loading and discharge, insurance and organization of distribution etc. (article 16 par.6 Presidential Decree 186/92 of the Greek Code of Accounting Books & Records) apart from the organization and the execution of the transportation. For this reason, usually, their activity is accompanied by the exploitation of the storage area, in order to take action at the sector of logistics.

The course of the transport work and consequently the development of the freight forwarding services is influenced by the quality and the operational efficiency of the infrastructure (road network, railway network, ports, airports), as well as from factors which have an impact on the transport cost (freights, ferriage, tolls, fuel prices, premium load and insurance carrier etc.).

This decade is characterized by the continuous increasing cost of the road transport mainly due to fuel prices, the transit taxes at the highways regarding the freight of the roll on/roll off ships and the cost of the drivers.

So, with the current circumstances one road transport company will be viable for a few years, more  but only under the strict condition that the driver of the truck is the owner, and the vehicle is relatively new and repaid.

The strong competition between the freight forwarders and between the motorists has shaped the procedure of collective freights to a continuous and difficult road race. The common effort of both sides consists in complementing on time the pay load of the vehicle. From the one side, the leased truck may not provide credit of time at the freight forwarder beyond the agreed time, and on the other hand the freight forwarder is pushed to complement the freight and meet the delivery deadlines in order to maximize its profit.

From the one side, it is exerciced pressure at the motorist due to the offer of many competitive drivers, and on the other it is exercised pressure at the freight forwarder by many similar Greek and foreign companies at the sector of freight forwarders, leading them to offer more and more additional services at their clients.

The freight forwarders in order to reduce the cost they are forced to collect  more and more smaller lots directly from the factories. With this way it is avoided the interference of the agent, and consequently the cost is compressed. With this organization it is achieved lower price of the total freightage for the benefit of the client, and acceptable time for the route.

Many times the freight forwarder in order to reduce the price and increase his benefit is forced to split up or, to proceed to a partition of the freight in order to have smaller volume and to fit into smaller gaps between the freights of larger freight. If for example a pallet is 2 cubic meters and consists of 20 cartons the carrier has to split it up and has to place some cartons which can be fitted at gaps between the rest of the freight. This is called the splitting of the pallet. When the truck arrives to Greece then the pallet is recreated and delivered at the client without problem and at a competitively cheaper price.

The experience has teached the freight forwarder to try to gather the freights in such a way in order to ensure as much as possible the best loading and stowing of the vehicle and to meet the predefined deadlines.

At our days, the dominant carriage foresees that the freight forwarders are trying to act as follows:

They offer a price per ton of transported merchandise and not per full freight at a client who has mass and large freights. At the other hand, they undertake the commitment to serve him with particular quantities within defined deadlines. With this way they always insure the predicted departures because they load first the necessary mass freight, in order the pay load of the vehicle to be complemented with the existed small lots. Then, upon the arrival at Greece they are discharged the small lots at the warehouse in order to be transported with small trucks at the various individual recipients. Then, the mass merchandise of the large client either is delivered at its final destination, or it is transported at the warehouses of the freight forwarder in order to be delivered later on.

The working way of the organized freight forwarders is based at the large number of lots which are gathered by the collective work of their networks. Based on their organization they gather the individual freights at warehouses, which are located at nodal points. The trucks go at these points in order to compelement their freights after the collections of the larger lots. Afterwards, they depart for their destination.

From the side of the freight forwarder the difficulty of transportation is always the observance of schedules in relation with the full exploitation of the pay load of the truck. With this way it is achieved lower cost and satisfactory quality of transport.

One reliable freight forwarder keeps his word and his promises in relation with the delivery time of the merchandise, the duration of the transportation and the delivery time of the merchandise at the predicted discharging area. The client is based at these in order to determine the optimal quantity of the order. The price cost of the transportation plays also a key role, with the only difference that the price only is not sufficient in order to select and prefer the transporter. The relationship of trust between the transporter and the client plays also a definitive role.

 Internal and organization of the accounting

A well organized freight forwarding business must have one costing quota for each transfer of one full vehicle. The quota at the freight forwarder is the route of one transport means for which we are going to accept by the transporter one and only charge rate and other expenses. If within the vehicle they are included also other individual clients we must create for each one of these, one subquota. The subquota at the transportation is the lot of each client which is loaded along with others at a truck (many times at two trucks), and constitute along with the others one full freight of this truck.

If there is a corresponding offer at a client for larger lots which surpass one full freight, then the quota must be broadened for the lot of the full freights totally.

With this independent way if the trucks arrive all together, or gradually it will be possible the settlement with the carrier and the charge of the client.

If you broaden in an organized way the quotas they are classified within those all the transportation documents, and thus there is no way to be lost. Let us not forget that along with transportation we should issue also a series of various documents. Those documents accompany the merchandise or are sent via urgent correspondence. If they are not classified directly at the quota that they belong, it is almost certain that they are going to be lost or forgetted. But with the quota at any moment we are aware of the course of the transportation via the same the supporting documents which are inside the envelope. The quotas (copies or originals) are sent at the Accounting Department in order to registered and invoiced.

By broadening the cost of the quotas we give an account number of cost at each trasnportation. In that way, we can have the economic result per quota, per time, per cost center, per transportation sector (if we have made also transportations with other means) etc.

The expense accounts which burden each quota are the freight rates which are paid for the rights of the agents and the ancillary transportation services. On the other hand, the revenue accounts can be correspondingly the freight rates and the other ancillary revenue which are collected based on the issued data.

The numeration of the quota must be functional, and for this reason the quota must have at the first part maximum 4 numbers which indicate the pricing period. For example the number 211 means the second month of 2011. The number 1011 means the tenth month of 2011. Thus, the quota 611/286 means the 286 transportation within June of the year 2011. The distribution of transportations per month plays a key role at the costing, because we can see the evolution of the works each month as well as their economic result. For someone it is easy to understand that it can be made – with the additions of letters or numbers at the numeration of the quota –  distinction of the quotas based on the department, the transportation means, and the country of origin if it is about for export or import etc.

The freight forwarding businesses are obliged according to the circular 3/92 par.12.4.3 to issue an invoice for the provision of services. They issue also international bills of ladding CMR for the international transportations which have the target to regulate the delivery terms and to ensure the responsibilities of the carrier etc. In this case the CMR is not a voucher of income, since it is issued an invoice for the provision of services.

The freight forwarding businesses during the introduction of merchandise at the warehouses are obliged to have an official duplicate book of temporary storage of goods, for the merchandises which are transferred by the countries of the  European Union towards our country. The first criterion is the foreign consigner and the Greek consignee. If the consigner has at his vehicle merchandises with many consignees, there will be made so many registrations as the consignees. The second criterion presupposes that the merchandises will be discharged and remain even for a while at the warehouses, so as their internal transportation will be organized. This book is not updated for the freights which are delivered directly at the installations of the Greek importer. The updating of the book is made directly with the arrival of the transportation means, and not later after the completion of the discharge. If from the accompanying documents arises an analysis of merchandises, then their type can be registered at the book in general. Copies of all the data and documents are kept for future control.

For every consignment of merchandises they are issued by the warehouse  consignment notes which apart from the others mention the number and the date of the accompanying  data of the foreigner-consigner. In case where the merchandise will be sent to a third party by the order of the importer, it will be mentioned at the  consignment note the indication “the consignment is made by the order of the depositor-client” with full mentioning of all the data. The original accompanies the merchandises and is delivered at the consignee, while one copy is sent at the importer and has the indication “It does not constitute an accompanying document of transportation  for the consignee depositor”. With the export of the merchandise is informed also the book of storage at least one day after the delivery.

The temporary storage is not compulsory to be invoiced because it is considered a part of the transportation procedure. In case that it will be invoiced the number of the invoice should be mentioned at the book of storage.

Analysis with a financial view

 The cost estimates of exploitation regarding the freight forwarding business are predicted and known. They are the freight rates of the motorists who leased from where it arises the gross profit after their abstraction from the revenues and the general operating expenses from where it finally arises the net profit before taxes.

Also an important cost which is undertaken by the freight forwarder is the “financing”  of his client where the risk may be very large.

Every Freight Forwarding Bossiness must maintain sufficient financial resources in order to pay the bills which may arise. When the business does not succeed at this field it means that it has exhausted its liquidity and is in a very difficult financial situation. The irony is that something like this may happen even if the business generates satisfactory profits during the particular period.

Every freight forwarding business in order to achieve its purposes and to ensure the unhindered operation without problems should have adequacy of working capital. When it has adequacy of working capital it can do the following:

a) Pay up directly its obligations

b) Its credit policy is constant

c) Has immediate possibilities to find motorists at better

d) It copes with success at periods of economic crisis

e) It is successful at cash planning of collections and payments

When cash runs out, the management of the company loses the power to decide in a free and independent way. An external factor, such as one unsatisfied creditor or a bank where its loans have not been paid, will decide for the luck of the company.

However, it may be lead to bankruptcy, forced reconstruction or continuation of its activities with a different form. The reality is that the management has lost its authority. It is also possible the owners to have lost the whole of their investment.

Then may be someone asks: “How is it possible to happen all these since the profits are satisfying”. The answers is : “They do happen”, for many reasons.

The administration should understand timely that the financial statements reflect simply whatever happens in reality and what should be managed is the reality, and not the financial statements.


The land transport can be considered many times a monotonous work. On the other hand, the work of broadening a new routing at a new route, the negotiation of prices or the organization of the way according to which will be handled the freights is a complex work and can be undertaken only by a few and distinct managers of a freight forwarding business.

The acquired experience of the managers does not come either with the one sided theoretical study, or with the long working hours on the other side. The ideal proportion is to work, and at the same time not to leave any gap at your knowledge by reproducing in a mechanical way the work that has been assigned to you. This will be achieved if at the same time with the work you study also the relevant laws, the professional magazines and you try to be continuously informed for those that happen at the Greek and the international market.

Today everybody is aware that the international freight forwarding is a science in terms of knowledge and professional qualifications, while at the same time is a dynamic sector of the economy  that without it, there will not be any renewal.