An agent is a third party that facilitates the transport of goods between two other parties. The agent typically acts as an intermediary, negotiating rates and arranging for the transportation of goods. By working with an agent, shippers can save time and money by taking advantage of the agent’s knowledge of the shipping industry.

Because of their role as intermediaries, agents can provide shippers with valuable information about the shipping industry. Agents know which carriers offer reliable service and low rates, and they often have longstanding relationships with carriers that give them access to special promotions or negotiated rates not available elsewhere. For this reason, hiring an agent may be more cost-effective than entering into a direct shipping agreement with a carrier.

There is potential for conflict of interest when you hire an agent to arrange shipments for your company. Because an agent likely has relationships with several carriers, it may be tempted to recommend the cheapest or highest-paying but suboptimal carrier in order to secure more business or build better relations with that carrier.

An Agent is an entity appointed by a Principal to act on its behalf in business dealings with another party (the Other Party).

The Agent may be authorised to negotiate and conclude contracts in the Principal’s name, and may bind the Principal to those contracts. The Agent’s authority will usually be set out in a written Agency Agreement.

An Agent can play an important role in a company’s supply chain by helping it to secure better prices and terms from suppliers, and by helping it to maintain good relationships with customers.

For example, by liaising with suppliers, the Agent can obtain lower prices for the Principal on particular goods. Also, if a supplier is looking to increase its trade credit insurance limits or expand its export operations, for example, it may be willing to provide more favourable prices in exchange for being able to work directly with an Agent rather than having to deal with the Principal itself on every transaction.

The Agent’s task is to act on behalf of the Principal, and can be held liable for any loss or claim suffered by the Principal as a result of any negligence in carrying out its duties. The Agent may have access to both customers’ and suppliers’ confidential information, so it is important that confidentiality clauses are included in the Agreement.

What Is a Logistics Agent?